Receive full value from your PBM rebates

By Chris Hanson-Ehlinger
Thu, Nov, 20, 2014 @ 14:11 PM

Sharon MoritzRebate reviews and audits regularly surface PBM mistakes and contractual underperformance. Small miscalculations can easily impact your rebates and not in a good way. An independent rebate audit can make sure your plan receives what the PBM promised and that all rebates are passed back to you accurately.

Auditors answer these four questions when they evaluate your plan’s rebate performance.

Is the PBM calculating rebates accurately?

There are many potential rebates available for any given PBM client. It’s confusing and, to make matters worse, manufacturer contracts are often ambiguously written. Rebate auditors seek clarity to determine what utilization management programs (i.e., step therapy, prior authorization, quantity limits) are in place and exactly how they impact the rebates your company could earn.

Are drug manufacturers paying your rebates accurately?

Manufacturers rarely pay 100 percent of the amount invoiced by the PBM. Instead the manufacturer processes all claims submitted on the invoice for contract eligibility (formulary status, pricing, market share, etc.) and adjusts the amount it reimburses. Validation is usually completed by the PBM when the payment is received. Third party rebate audits make sure any variance between amounts invoiced and amounts paid comply with your contract. 

Is your PBM accurately allocating manufacturer payments?

Your PBM’s analysts take the drug manufacturer’s payment detail and allocate dollars among all clients.  This process, if not done accurately, could cost your company a significant amount of money. Rebate audits scrutinize contract details and understand the math behind manufacturer’s payments so your allocation is in line with your plan’s prescription use.

Are rebate allocations meeting PBM contract terms?

Based on the amount the PBM paid for the contract year, auditors confirm that your rebate payment meets your expectations. It’s possible for your contract to perform below the guarantee for one or more quarters, yet meet the yearly terms (which is why most rebates are paid on an annual basis).     

Rebates have many nuances that impact your company’s bottom line. When in doubt, engage a rebate review or a manufacturer rebate audit to validate your PBM’s processes and assure your company receives full value from its PBM agreement.

Sharon Moritz is a claims auditor at Burchfield and works as part of the commercial and Medicare Part D team. For more information, please call 800-778-1359 or send us a note (

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