![]() There are many cases that I've seen where the plan sponsor cannot elect an auditor without the PBM’s approval. Even if there's a monitoring or auditing provision, PBM puts limitations in the contract. They just let the PBM draft the contract. Read more: As the cost of specialty medications increases, employees want employers to bear the financial burdenīased on my experience with the plan sponsors, they are not well-versed in the PBM industry, so they don't know the lingo. That PBM is also often introduced or recommended by a PBM-incentivized broker or consultant. In the private space, when a self-funded employer contracts with a PBM, that contract is driven by the PBM. How do PBMs get away with these malpractices? And if this is happening in the Medicare part D space, which is supposedly getting heavily regulated, imagine what’s happening in the private space where there's no disclosure requirements. That $6.25 million in PBM’s pocket should have been relayed to the plan sponsor and would have decreased the total drug spending of that plan sponsor, which means that my premium would have gone down. That case ultimately settled for $6.25 million. We also recently settled a case for a Medicare part D sponsor, which deals with voluntary prescription drug coverage. Weirdly enough, Ohio awarded the Medicaid contract to Centene again. ![]() Centene ended up settling for $88.3 million. For example, if a pharmacy paid $50 for a drug, Centene would charge Ohio’s Medicaid department $100. How do they use these tactics when it comes to their relationships with plan sponsors?Įven if there's contract language in place to prohibit this from happening, we see the same self-serving tactics with plan sponsors through spread pricing and manufacturer rebates.Ĭentene, which is a company that served as an intermediary for government-sponsored and private health care programs, was sued by the state of Ohio for spread pricing. So why wouldn't the PBMs try to drive independent pharmacies out of the picture? It means they receive more prescriptions and more money. Those three PBMs are already vertically integrated, meaning they are their own plan sponsors and pharmacies. Now, there are only three PBMs that control nearly 80% of the market, which are CVS Caremark, Express Scripts and OptumRx. Read more: How employers can reduce prescription drug spending PBMs’ self-serving tactics are driving the independent pharmacies out of the industry but also driving up drug prices and healthcare costs for Americans. And it’s possible that this prescription claim had already been dispensed to the patient a year or two ago.īesides the financial burden that these audits put on the pharmacy, if a major PBM terminates or suspends the pharmacy from their network, the pharmacy is likely to go out of business. Instead, PBMs take back the entire amount of the reimbursement paid on that claim. Logically speaking, the PBM should only collect back the $3 from the pharmacy. They issue those findings to the pharmacy and try to take the entire reimbursement amount paid on a given claim.įor example, a PBM identifies a copay discrepancy - meaning the pharmacy failed to provide proof of copay - and the copay is $3. They also conduct the fraud, waste and abuse investigation which looks for discrepancies in claims, such as incorrect medication quantity or duplicative claims. How do PBM’s operate with independent pharmacies that might ring an alarm bell for you as a lawyer?Īn independent pharmacy gets audited regularly, maybe even a few times a month by PBMs. ![]() Lee spoke with Employee Benefit News about the intricacies of a PMB lawsuit and how to spot malpractice. His firm claims to have recovered millions of dollars on the behalf of plan sponsors, uncovering spread pricing and wrongful audit practices. Read more: Is the pharmaceutical industry due for change?ĭae Lee, a pharmacist attorney at the healthcare and life sciences law firm Frier Levitt, represents pharmacies and plan sponsors against PBMs. ![]()
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