Today I would like to highlight some practical aspects in appealing PBM audits. Earlier this year, a PBM denied several pharmacy audit appeals because pharmacies were not compliant with the provider manual when presenting their appeal paperwork. Namely, the additional documentation presented by the pharmacy lacked pharmacy NABP number, prescription number, and date of fill. In these specific examples, pharmacies presented patients’ and prescribers’ statements which were missing prescription numbers and pharmacy’s NCPDP.  The PBM rejected this information because under its provider manual, every document submitted during the appeal or audit process must state:

– pharmacy NABP number

– prescription number

– date of fill

– patients’ full name.

And if the pharmacy is providing a prescriber’s statement, it must be on the prescriber’s letterhead clearly indicating the origin of the document (i.e. prescriber’s fax number).

Another practical issue is many PBMs now have a provision in their manuals to hold the new owner of the pharmacy accountable for the previous owner’s audit. Before, we were able to successfully argue that the audit covered the date under the previous ownership and the new owner should not assume responsibility for such acts (especially if the new owner operates under the new NPI and NCPDP). But now most PBMs have a provision that if you continue operating under the Seller’s contract, you remain severally and jointly liable for the conduct of the past owner. This makes due diligence during the acquisition stage even more important, especially when it comes to invoice reconciliation aspect. Prior to closing a pharmacy transaction, the buyer should perform an internal invoice reconciliation to ensure no audit would reveal drug shortages.


The bottom-line is the pharmacy should be familiar with the provider manuals prior to presenting any information or argument to a PBM. Surprisingly, many pharmacies do not even have access to their PBM manuals. Most of them are available through PBM pharmacy portals, make sure you download them and familiarize with their requirements prior to submitting any audit appeal documentation.