'Risk comes from not knowing what you're doing.'

“Risk comes from not knowing what you're doing.” — Warren Buffett

Risk is everywhere in our lives. The trick, as Mr. Buffett says, is to manage it through knowledge. Your exposure to risk in the pharmacy businesses may come about from various sources.

Theft, litigation, competition, financial risk, risk that you will see Emdeon’s VP of Pharmacy Sales, Richard Brook in a Harlem Shake video…. and audit risk.

Warning you about the Harlem Shake video should have prepared you to manage it by avoiding it, but I know that some of you still clicked on the link!

Audit risk continues to grow in its impact upon pharmacy operations. To successfully operate a retail pharmacy in today’s environment, it is imperative that you understand your exposure to audit risk and utilize ALL of the tools available to help mitigate that risk.

How big of a deal is this today? From NCPA’s September 2012 Survey of Community Pharmacies Impact of Pharmacy Benefit Manager (PBM) Contracting and Auditing Practices on Patient Care: “Over 58.7% of independent community pharmacies stated that PBM reimbursement and auditing practices are very significantly affecting their ability to provide patient care and remain in business.”

There are many drivers increasing the expansion of audits. And with the ever-present constraints on congressional budgets and the near term implementation of quality initiatives associated with the Affordable Care Act, pharmacy auditing will likely continue to grow in prevalence.

The good news is that there are solutions in the market place that are designed to mitigate audit risk focused on the following:

  • Prevention in terms of administrative integrity. Examining the claim proactively and reactively to promote complete, accurate and appropriate information being furnished to the payer (i.e., pre and post editing);
  • Services that assist in managing the transactional process and audit prevention with regard to operational or technical procedures. One example to consider relates to dispense-as-written (DAW) codes. Dispensing a brand name drug with a missing or incorrect DAW code can lead to reduced reimbursement and create audit potential;
  • Reporting that allows for reactive analysis through modeling and trending based upon statistical analysis of reimbursement of existing claim traffic;
  • Utilizing edits to prevent filling prescriptions from ineligible providers. By capturing the ineligible status prior to dispensing, you can help mitigate your audit risk;
  • Contracting with healthcare payers. You MUST examine your network contracts with healthcare payers and comply with their terms to enable a smoother process.

Again, there are any number of tools designed to assist with audit risk mitigation. Take charge of your risk, know it, manage it.

Paul Hooper
Emdeon VP of pharmacy network services
As VP of pharmacy network services at Emdeon, Paul Hooper directs the company’s pharmacy network services initiatives with a focus on developing programs, standards and partnerships that increase pharmacy efficiency and reduce healthcare costs. Paul has spent more than 25 years in the healthcare industry with a predominant focus in pharmacy. During this time, he has held roles in product development, systems, finance and operations at various recognized industry leaders: BASF, Abbott Laboratories, Cardinal Health, ArcLight and Emdeon. He holds a master's degree in business administration from Ohio University and a bachelor of science in food science from The Pennsylvania State University.



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