In today’s rapidly evolving healthcare landscape, employers and other types of plan sponsors face numerous challenges when it comes to managing their employee benefits, particularly in the area of prescription drugs. To ensure optimal utilization of resources and to safeguard the well-being of their workforce, plans are increasingly recognizing the importance of auditing their Pharmacy Benefit Manager (PBM). It is one of the most requested services we perform at Wilkinson Benefit Consultants (“WBC”). In this blog post, we will explore the value for plan sponsors in conducting audits of their PBM.

1. Financial Savings
One of the primary reasons plans choose to audit their PBM is to identify potential cost-savings opportunities. PBMs play a pivotal role in managing prescription drug benefits, negotiating with pharmacies and drug manufacturers, and providing pricing. However, complex contracts and rebate structures can sometimes lead to hidden costs, errors and over-payments. By auditing their PBM, plan sponsors can uncover discrepancies, identify areas of excessive spending, and negotiate better terms, ultimately leading to substantial financial savings.

2. Enhanced Transparency
Transparency is key in many business relationship, and the Client-PBM partnership is no exception. Auditing a PBM promotes transparency by thoroughly examining the contractual agreements, pricing structures, and performance metrics. It allows plans to gain a comprehensive understanding of how their pharmacy benefits are being managed, ensuring that the PBM is fulfilling its obligations, meeting service level agreements, and delivering on promised cost savings. By shining a light on potential conflicts of interest and non-compliance, audits foster transparency and strengthen the Client-PBM relationship.

3. Improved Service Quality
Employee/Member satisfaction is, many times, directly linked to the quality of their healthcare benefits, including pharmacy benefits. Auditing a PBM helps plans assess the service quality provided to their members. By analyzing data on claims processing, customer service interactions, and medication adherence, plans can identify any gaps or deficiencies in service delivery. This information empowers plans to work with their PBM to implement improvements that enhance the overall experience for their employee/members, resulting in increased satisfaction, engagement, and productivity.

4. Mitigating Compliance Risks
The healthcare industry is heavily regulated, and non-compliance can have serious consequences for plans. PBMs are receiving significantly enhanced scrutiny by plans, consultants and regulators. Auditing a PBM enables plans to assess the PBM’s adherence to regulatory requirements, such as HIPAA and state-specific pharmacy benefit laws. By conducting a thorough review of the PBM’s compliance policies, procedures, and data security measures, plans can ensure that their pharmacy benefits program meets all legal obligations. This mitigates the risk of potential penalties, lawsuits, or reputational damage due to non-compliance.

Auditing a Pharmacy Benefit Manager offers plan sponsors a range of valuable benefits. From financial savings and enhanced transparency to improved service quality and mitigating compliance risks, audits enable sponsors to optimize their pharmacy benefits program. By scrutinizing the contractual terms, performance metrics, and service delivery, plans can ensure that their PBM is effectively managing their pharmacy benefits and providing the best possible care for their members. Regular audits foster a collaborative and transparent relationship between plans and PBMs, leading to increased efficiency, cost savings, and overall member satisfaction. As the healthcare landscape continues to evolve, the importance of auditing pharmacy benefit managers will only grow, making it an essential practice for all types of plan sponsors to consider. Stay tuned. There will be much more oversight applied to PBMs in the coming year!