Physicians and pharmacies are facing heightened audit enforcement and Fraud, Waste & Abuse (FWA) investigations by Express Scripts, Inc. (ESI), relating to prior authorizations. In recent weeks, we have received a number of calls concerning alleged prescriber denials of prior authorizations submitted via CoverMyMeds provider accounts to payors, including Medicare and Medicaid. Because ESI is particularly aggressive and these investigations involve high-dollar items and claims, both physicians and pharmacies should handle these matters with extreme caution.

CoverMyMeds Prior Authorization

CMM, a McKesson-owned business, has revolutionized the prior authorization process by digitizing the forms exchanged between payors, physicians and pharmacies.

While Chief Counsel to McKesson, I spent extensive time in Columbus, Ohio, supporting the CMM business from a compliance perspective. At that time, the federal government's posture with respect to prior authorization was that pharmacies could not be involved in the process.

Nonetheless, particularly with respect to specialty drugs, it is a routine business practice for pharmacies to assist physicians and medical practices with the prior authorization process. Hence, over time, the government relented in its view that "white glove" physician administrative support rendered claims "false."

Our Prior Authorization Wins

In fact, several years ago, I successfully convinced the U.S. Attorney's Office for the District of Massachusetts to expressly acknowledge the role of pharmacy in prior authorization.

Specifically, on behalf of a Florida specialty pharmacy, I convinced prosecutors to drop criminal charges against the pharmacy's owner, and to resolve the matter with deferred prosecution and civil settlement agreements.

As part of that settlement, the federal government approved the pharmacy's prior authorization protocol, which clearly preserved pharmacy's role in the process. Nonetheless, across industry, confusion persists regarding the prior authorization process and who may be involved.

ESI Prior Authorization Investigations

ESI is using that confusion to drive a wedge between prescribers and pharmacies that perform prior authorization services. Specifically, ESI investigators are confronting physicians who are writing prescriptions for higher-cost medications, such as Diclofenac and Omeprazole Bicarbonate, and claiming that "false representations" are being made in the prior authorization process.

Notably, ESI is using information obtained from CoverMyMeds to concoct these claims. For example, ESI is claiming that it "received information from a third party processor indicating prior authorizations for a number of claims were approved based on false representations made via the prior authorization portal."

Not surprisingly, in response to ESI's inquiries, nervous physicians are denying either writing the prescriptions or initiating the prior authorization. In turn, ESI is recouping hundreds of thousands of dollars paid on those claims from pharmacies.

How to Prepare for ESI Prior Authorization Investigations

First and foremost, forewarned is forearmed. Prescribers and pharmacies should understand their rights and obligations under the law. This Alert provides some background, but if you have questions, now is the time to address them.

Second, your statements can be recorded and used against you. Therefore, before the underlying facts and circumstances become clear, it is advisable to not take a position on anything absent legal representation.

Third, review your processes and protocols to ensure compliance to legal and contractual requirements. If and when someone disagrees with the approach you have taken, all processes involved will be heavily scrutinized and tested.

Fourth, conduct an internal review to understand the level of risk involved, i.e., what type of claims and dollar value are at stake? Take steps to limit your exposure before it becomes outsized.

In short, act proactively to insulate your livelihood from attack, whether that be from ESI or any other MCO. And if you are already dealing with a FWA investigation or audit that could be referred to regulators, don't wait to take defensive action. Schedule a free consultation now.