Auditing prescription drug costs and utilization within the LTCF is an important part of conducting business, but too often, the LTCF relies entirely on the contracted pharmacy vendor to perform its own audits. Talk about a conflict of interest!
VERITAS is uniquely qualified to audit pharmacy performance, on behalf of the LTCF, in areas such as contract compliance, plan design, implementation, and clinical management. This comprehensive audit requires an understanding of the pharmacy’s business practices – the practices that make the LTCF’s numbers, their numbers.
And the fact that VERITAS maintains independence from the pharmacy industry makes them the perfect operational/administrative extension for each LTCF.
Retro-billing Audits:
During the "Initial Term" of the pharmacy services agreement, VERITAS performs its due diligence, on behalf of the LTCF, of the existing pricing schedule. It includes a one-month retro-billing analysis for one designated facility (FREE of charge).
VERITAS requests that the LTCF provide: (i) Signed Business Associate Agreement, (ii) Supporting electronic / paper documentation of the most recent months pharmacy invoice, (iii) Copy of the current pharmacy vendor contract.
Within 15 days of receiving the submitted information, the audited price is compared to the existing pricing schedule, along with State MAC and/or Federal Upper Limit (FUL) price if applicable to that drug, and opportunities for generic substitution and/or therapeutic interchange. If overcharges are found, and billing inconsistencies have been identified, then a detailed computation of the “credit amount due” will be reviewed with the LTCF, (VERITAS will even retro audit to the beginning of the contract term).
At this point, the LTCF needs to determine if this level of double-checking will be used as the backbone to dispute any ongoing charges for the remaining term of the pharmacy agreement, therefore making payments only when there is resolution. VERITAS will assist the LTCF in communicating and negotiating any identified claim for credits/recoveries with the pharmacy provider.
Success Story:
VERITAS was retained to conduct a retro-billing audit for a regional nursing home chain. VERITAS discovered several discrepancies between the pricing schedule, in which the client had signed-off, and the actual billable charges. In conclusion, the client received a settlement payment of over $225,000, terminated their pharmacy agreement and agreed to a new contract with a new pharmacy provider with a savings of over $100,000 within the first year.
Results: Along with resolving the discrepancies, VERITAS and ProActive Rx are working as an intermediary between the pharmacy and the LTCF client to formalize protocols to prevent additional communication errors in the future.
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