Emerging PBM Audit Areas: Eligibility and Clinical Audits

By Derek Frye
Thu, Sep, 05, 2019

As pharmacy benefits become more complex to administer and as rapid changes continue to unfold in the market and regulatory landscape, emerging PBM audit areas are taking on added significance for health plans. This article discusses two emerging PBM audit areas: eligibility and clinical.

Eligibility Audits

Member eligibility for benefits is the cornerstone of PBM claims processing. Because all claims that process or fail to process tie back to eligibility, it’s important to ensure that eligibility records are correctly maintained and updated. Hence, eligibility is becoming an emerging PBM audit area.

An eligibility audit is designed to make sure each prescription claim processes within the correct plan the member signed up for; ensure that all claims processed fall within the timeframe in which the member is benefit-eligible; and ensure that the PBM maintains a correct, updated record of eligibility parameters.

Download The Health Plan's Guide to Auditing PBM Contracts: Update for the 2019-2020 CMS Audit Season 

Eligibility audits typically uncover problems in how eligibility file information is “translated” between the health plan and the PBM because each may have different data indicators. For example, a member eligible for a “Gold Plan” requires different group codes and other indicators compared with members in a lower level plan but the codes aren’t captured properly by the PBM.

A good eligibility PBM audit will show a list of claims that processed outside eligibility limits, as well as costs associated with these – for both the plan and the member. Health plans can use this information to recover monies from the PBM or request that the PBM implement operational and performance improvements.

Clinical Audits

Sometimes also called Utilization Management (UM) reviews, clinical PBM audits allow health plans to address therapeutic appropriateness, over- and underutilization of drugs, dosages, duration of treatment, drug duplications, contraindicated treatments, and adverse drug reactions. This emerging audit areacan further help health plans manage costs and steer patients toward more cost-effective and/or safer drug decision-making.

Even though PBMs should be applying the correct UM edits on prescription drug claims, they often fail to do so, meaning clients end up paying more than they should. In addition, patients are often exposed to potential safety issues that could be avoided. Clinical PBM audits performed by our teams consistently reveal problems with PBMs NOT applying Prior Authorizations (PAs) the way health plan clients intended. This is largely because of inadequate documentation processes -- with many “lost” in email threads.

Download The Health Plan's Guide to Auditing PBM Contracts: Update for the 2019-2020 CMS Audit Season 

Considering that a single missed PA on a specialty drug can cost a plan thousands or tens of thousands of dollars, it is no surprise that this represents an emerging audit areathat can be beneficial for health plans. There is another advantage. Following a clinical PBM audit that reveals problem areas, a health plan can go back to the PBM and clarify which UM tools (prior authorizations, quantity limits, and step therapy) they want to apply against certain drugs on formulary.

Another factor driving increasing health plan interest in this audit area is Medicare compliance. Under Medicare Part D, plans are required to submit all UM edits to CMS for review and approval and adhere to their formulary rules as submitted previously to CMS. CMS scrutinizes formulary administration and how UM rules are applied during plan audits, especially regarding transition fill requirements. Plans must also submit monthly and/or quarterly formulary files to CMS. So, performing clinical PBM audits is a good way to ensure you are complying with CMS requirements and avoid possible enforcement actions by the agency.