It’s a hard time to be a pharmacist. Community pharmacies are busier than ever, and ongoing issues from the COVID pandemic are making it hard to keep the shelves stocked and the pharmacy counter staffed. But those aren’t the only difficulties pharmacies are facing right now. In addition to pandemic worries and staffing issues, they also have to worry about pharmacy audits.
What Is a Pharmacy Audit?
The Law Offices of Joseph L. Bogdan, LLC defines a pharmacy audit as “a formal review of operations and processes to make sure that pharmacies are compliant with pharmacy regulations and other related agreements.” So, not all that different. It involves a third party checking your pharmacy records and processes for any kinds of mistakes, discrepancies, or inconsistencies.
But is that all there is to it? Hardly.
American Pharmacies (APRx) has a section on their website all about pharmacy audits. On their site, they make the case that audits by insurance companies, PBMs, and third-party payers are a major threat to the practice and business of pharmacy. “Too often,” the site states, “the on-site audit is simply a mechanism to recoup thousands of dollars, frequently from small independent pharmacies.”
According to Kaiser Health News, the average audit in 2020 cost pharmacies over $23,000, a sharp increase from previous years. While the number of audits is actually on the decline, the extensiveness of those audits is rising. The average number of prescriptions reviewed in each audit has jumped 40 percent from the previous year.
It sounds like a community pharmacy could be in for a battle when faced with an audit. So let’s arm you with a little information to get you prepared.
(Because, as any G.I. Joe fan will remember, knowing is half the battle.)
Has COVID-19 Affected Pharmacy Audits?
As with so many other things, the COVID-19 pandemic has had an effect on pharmacy audits. Unfortunately, it’s not good news for pharmacists. As previously mentioned, the number of audits has actually gone down in the last year, but the audits that are still being performed are more serious than ever. A lot of pharmacies are seeing revenue siphoned back to PBMs over things like minor clerical errors or missing signatures (during a time when patients weren’t going inside the store). Plus, insurance providers (including Medicare) are now auditing COVID-19 vaccine administration claims.
Also, where audits were generally in person before the COVID-19 pandemic began, many audits are now virtual, shifting a lot of the work from the auditor’s shoulders to the pharmacist’s. For example, when his pharmacy was audited by a pharmacy benefit manager, pharmacy owner Scott Newman found himself scanning over 100 pages of documents at midnight in order to make a deadline.
When Audits Become a Roadblock to Providing Care
Unfortunately, audits can do more than threaten to recoup third-party payments from pharmacies. They can even hinder patient care.
In Baltimore, Mount Vernon Pharmacy was forced to stop providing COVID-19 vaccinations due to staff shortages, increased workload, and (and this is an important “and”) the fact that his pharmacy was required to complete a state-required audit for the Maryland AIDS Drug Assistance Program. Stephen Wienner, owner of Mount Vernon Pharmacy, believes the audit could have been postponed for several months due to recent surges in the pandemic. “They’re looking at prescriptions that are two years old,” he said.
Because of the extra work forced by the audit, Wienner made the difficult decision to pause COVID vaccinations. “You ramp up too much and you’re going to make a dispensing error or vaccination error, and something had to give,” he said. “I couldn’t live with myself if we did either.”
What Can Your Pharmacy Do to Prepare for an Audit?
An audit can be a scary process. Once it happens, so many things are out of your control. But there are things you can do that will make the audit easier on you and your staff, as well as less likely to result in revenue reclaimed.
- Document everything: No matter how trivial it may seem, document everything you do for your patients. Take note of every prescription, every dosage, every consultation, and every cost associated with each of those items.
- Everything in its place: While documenting everything you do is important, knowing where that documentation lives is just as important. A lot of the time spent in audits is spent gathering information and documentation. If it’s all kept in one safe, secure place, you can cut that time (and a number of headaches) considerably.
- Reconcile claims and reimbursements regularly: If you perform regular reconciliation on your third-party payments, you’ll identify (and fix) issues long before the PBMs do. Plus, using a reconciliation platform helps you keep and maintain the kind of financial records auditors will be requesting. You’ll be a step ahead.
The word “audit” does not typically generate feelings of happiness. It does not spark joy. But that doesn’t mean it has to bring your pharmacy to a halt.
Audits are as inevitable as they are controversial. They’re coming, and it pays to be prepared. The good thing is, with proper workflows and documentation practices, your pharmacy is preparing for an audit every day.