Modern Pharmacy Benefits Scams

High Dollar Prescription Benefits Claims paid by your PBM can quickly deplete your budget in broad daylight while everyone is looking. Pharmacies and prescribers can easily determine if your plan design is vulnerable to attack. A valuable new service by Pharmacy Benefit Forensics,LLC (PBF) provides monthly detailed review of paid prescription benefit claims protects you from catastrophic losses, and helps recover claims paid through Fraud, Waste & Abuse

Complex Pharmacy Benefit Claims and Payment Pathways Are Easy Targets for Fraud, Waste & Abuse

Modern day scam artists comprised of pharmacies, prescribers, and certain drug manufacturers are probably walking right out your "front door" with payments of $ hundreds of thousands paid directly from your Prescription Benefits Manager and billed to you. If you thought your PBM was protecting you, read how one highly knowledgeable healthcare employer was en route to being scammed out of $1M in just a few months until is was stopped by Pharmacy Benefit Forensics,LLC.

It only takes a few claims

“ On average our plan pays for approximately 50,000 claims a month. But Bob Schenk found that our plan was paying over $85,000 monthly for just 25 claims every single month from an out-of-state pharmacy. This level of loss was not even noticed by our PBM who processes millions of claims a month worth $Hundreds of millions for thousands of employers . Pharmacy Benefit Forensics,LLC saved us over $1M a year by identifying and stopping the scam we thought our PBM should have noticed, but did not”

As you probably know too well, drug costs have officially hit the stratosphere. Recently a new drug therapy costing over $2 million was introduced and there are hundreds of drug therapies that can rack up costs between $20 thousand and $50 thousand yearly. Not too long ago if a prescription cost $100 that was considered exorbitant but now, that’s the AVERAGE prescription price. The cost of drugs and the complex shell games played by drug manufacturers and PBMs has created a market that is ripe for scammers. The marketplace for generic drugs seems particularly suited to fraud, waste & abuse as these manufacturers can set artificially inflated Average Wholesale Prices (AWP) that bear no relation to their actual cost to the pharmacy. Yet, PBM contracts with self-insured payers are all based on discounts off the AWP. The difference between actual cost and AWP for some generic drugs can vary by 1000%... or more. Even if your PBM ensures you receive your guaranteed discount of 85% off AWP, these claims can reap $thousand for the pharmacy on every prescription. In an environment where many pharmacies are struggling to survive financially, temptations like this and the ease of access to large pots of cash prove hard to avoid, and you and your plan can pay the price if you aren't looking ....and no one is! The past few years has seen an explosion of such scams that pop up everyday sometimes creating partners in crime between pharmacies, prescribers, and a new kind of drug company. Pharmacies in Las Vegas have been found to have sales reps in New Jersey and Pennsylvania because these scams are so lucrative and can actually be pulled off legally. Previous scams involved mainly "compounded drugs" but now, with the help of certain boutique drug manufacturers any drug can have its pricing manipulated to create instant wealth for those that would choose to exploit the PBM payment system. Many have been caught and even been sentenced to jail for these schemes but every time you catch one, another pops up. It has been described as whack-a-mole for sure.

A New Breed of Pharmacist Emerges

Fortunately, a new breed of pharmacists with extensive knowledge of clinical pharmacy, drug costs, pharmacy distribution channel, and prescribing patterns who are driven to root out Fraud, Waste and Abuse has stepped in to police the claims of smart thinking benefits managers. They are called “Forensic Pharmacists” because they can use their unique pharmacy knowledge and experience to identify “red flags” in the detailed claims history or other unusual dispensing patterns likely to lead to losses by payers. Such “red flags” were assumed to be the area of expertise of the PBMs or Pharmacy Benefit Auditors but it has become painfully evident that is not the case at all. Fraud and abuse can hit quickly and over just a few claims a month and a few months and add up to $millions across just a few employers. Its a fact- PBMs only make money when claims are paid. In fact, if they are operating under a traditional contract with an employer they may even be profiting through spread pricing on those same fraudulent claims. Pharmacy consultants and auditors focus mainly on a PBMs adherence to its contract terms with the employer and payment of “guaranteed discounts” and rebates but not on the authenticity or appropriateness of individual claims paid by the PBM. Although your auditor may identify that your PBM did or did not give you the appropriate guaranteed discount on a claim, he or she will not even be aware that the claim was suspicious or even fraudulent in the first place!

A Prenatal Vitamin for Men?

“Recently Pharmacy Benefit Forensics identified unusual payments and found our PBM was paying over $35,000 per month for about 30 prescription claims for a prenatal vitamin called Azesco. When they told us that 15 of those claims were for men, we couldn’t believe it! They immediately helped us notify our PBM and we stopped paying for those claims which were all originating from only a handful of pharmacies”

The business model deployed by Pharmacy Benefit Forensics, LLC is based on shared savings with no upfront costs incurred by the payer. Employers pay nothing unless PBF identifies, stops, and/or recaptures money already paid out by the self-funded prescription benefit plan through their contracted PBM. It is truly a win-win scenario. Unfortunately, there are simply not enough Forensic Pharmacists currently trained in the unique task of uncovering Fraud, Waste & Abuse as evidenced by a simple google search of Forensic Pharmacists. Pharmacy Benefit Forensics,LLC is currently contracting with and training pharmacists all around the country.

If you are a representative from a self-insured employer, even if you are contracted with any of the top nationwide PBM's, you should contact Pharmacy Benefit Forensics as part of your due diligence on behalf of your employer. The service costs nothing unless problems are found and suspicious or fraudulent claims are stopped or funds recaptured.

If you are a pharmacist reading this blog and feel encouraged to join in the fight against fraudulent pharmacies, prescribers, and manufacturers, please reach out and contact us to learn how you can join the team as an independent pharmacist contractor.