This is the time of year that plan sponsors are reviewing PBM consulting services to help negotiate new PBM contracts. At WBC (www.wbcbaltimore.com) we see all sorts of consulting requests to help reduce the cost of prescription drugs. One that hasn’t been utilized as much as it should is invoice validation of a plan’s monthly PBM bill. What good does spending lots of time and money on negotiating the best PBM contract if there is no way to validate the delivery of the contract terms?
The PBM relationship can be a strange one. Where else does the customer not know
what their purchases will cost; where the vendor can change pricing at any time, and at their discretion; and where the customer has to depend on the vendor to tell them how they are doing? This fox sure knows a good deal when they can get it!
Every two weeks in the U.S., more than $12 billion in pharmacy benefit claims (PBM invoices) are paid by plan sponsors without review! Mistakes due to systems problems, coding errors, complexity of PBM contracts and ever-changing pricing discounts lead to errors that create payment confusion for the plan sponsor. Without concurrent invoice review, a plan sponsor is probably paying significantly more than they should.
Fortunately, technology is now available that enables the review and analysis of unlimited claims data files in very rapid order. What use to take weeks can now be done in a few hours. This is particularly meaningful when most PBM contracts require payment submission within 48 hours of receipt. The platforms are PBM-agnostic, so any PBM’s invoice can be reviewed. WBC helps plan sponsors with this critical prepayment validation service for prescription claims. Our clients receive an immediate ROI with the first invoice we review. The review includes:
- Ingredient costs
- Duplicate claims
- Effective discount rates
- Dispensing fee validation
- Member cost share
- Invalid NDC’s
- Eligibility review
- Med D subsidy
- Regulatory compliance
- Fraud, waste and abuse
A review system should be fully scalable, easily handling large or small claims volumes. Unlike end-of-year contract audits that are difficult to gain recoveries, our monthly monitoring provides cash flow controls and near real-time reporting delivered within hours of obtaining the necessary data feeds. Discrepancies can be fully documented and deducted from that month’s invoice. Plus, this review is not an audit and should not trigger onerous audit language found in many PBM contracts.
Adequate financial oversight is not just a compliance afterthought, it’s a necessity! A comprehensive invoice review will help reduce fiduciary liability by improving regulatory compliance for Sarbanes-Oxley, Medicare Part D, GASB 45 or FAS 106. Systems should have the ability to maintain a parallel reconciliation process aligned with internal audit and finance reporting calendars.
