Keep More of Your Hard-Earned Money

  • February 25, 2019
  • /   Andrew Fisher
  • /   Post Tags
Hard Earned

By: Andrew Fisher

Part of the ORCHIDopinion Series 

Pharmacy Benefit Managers (PBMs) have become a great source of humor for me lately. I often find myself chuckling at the audacity of the stunts they pull. A great example is the drama playing out in the news between Optum and the state of Ohio. Pharmacy owners have known for years that PBMs are not being transparent with their clients, and now it appears to be catching up with them. This may be a good thing for pharmacy owners in the long-term, but in the short-term it looks like the PBMs are going to go after the pharmacies to replace lost revenue. How are they going to do that? Caremark’s new audit “fee” is a great example.


 I have a theory. I believe that for years Caremark and the other PBMs have been taking money from pharmacies for audits that are mostly bogus and generally violate state laws, and they have been keeping a healthy percentage of it. This is impossible to confirm because the PBMs protect their client contracts like they are the secret formula for Coke or something, but the general consensus from experts with whom I have talked is that PBMs have kept up to 50% of all recouped funds from audits. For those of you keeping score at home, that means that PBMs are making money when the claims are processed, they are making money on the difference between what the pharmacy gets paid and what the plan is told the drug costs, they are making money from rebates paid by manufacturers to the PBMs, and they are making money when they falsely accuse pharmacies of doing something wrong and take that money back. Based on what is happening with Optum and the state of Ohio, and the litigation between Anthem and Express Scripts, it’s pretty clear that the clients of these large PBMs are tired of getting overcharged and are demanding changes. In order to maintain their revenues, the PBMs have to change the way they are acting. Hence, Caremark’s new audit “fee.”


Caremark is now charging pharmacies an additional 15% on top of the amount that is recouped in the audit as a “fee.” So, for example, if you have an audit, and Caremark recoups $10,000, you have to pay them back the $10,000, plus an additional $1,500 for their time and energy. I’m waiting to hear back from some attorneys familiar with this new fee and relevant state and federal laws to see whether or not this is legal, but, for now, pharmacy owners are going to have to deal with it. The aggressive audits from PBMs have been bad enough, but, now that PBMs are clearly incentivized to find things wrong during audits, pharmacies need to take extra precaution. Here a few tips for making it through unscathed:


1.     Make sure your documentation is pristine. Even simple errors like categorizing a prescription as being received by phone versus escribe may cause you to lose the entire value of the claim.

2.     Make sure patients are paying off their charge accounts. If you have patients paying their co-payments with their charge account, make sure that you are collecting the balances due on the account. Payers are now treating co-payments that have been placed on a charge account as though they were not collected at all and are taking the money from the claim back.

3.     Triple-check if you need to, but make sure that the NDC that was billed is the same one that was dispensed to the patient. This is an easy mistake to overlook, but it will lead to full recoupment of the claim and possible allegations of fraud against your pharmacy.

4.     Keep detailed records of your purchase history. Don’t forget about those couple of purchases that came from a source you don’t usually use. Inventory purchase audits are a favorite way of PBMs to take money back from pharmacies.


Remember, it’s not how much money you make, it’s how much you keep that matters. Keep your hard-earned money yours. ORCHID has programs to help independent pharmacies develop relationships with providers that will improve the pharmacy’s profitability. If you are interested in expanding the services you pharmacy offers please contact us to see if our programs would be a good fit for your store.