How to Audit Your PBM

Regular PBM auditing is essential for verifying contract compliance and identifying cost-saving opportunities. An effective audit goes beyond checking pricing guarantees to examine the full spectrum of PBM economics.

Types of PBM Audits

Pricing guarantee audits verify that the PBM met its contractual discount guarantees for brand and generic drugs. These are the most common audit type and typically reveal whether the PBM is within a few basis points of its commitments. True-up payments are made for any shortfalls.

Claims audits examine individual claim-level data for processing errors, incorrect pricing, duplicate claims, and eligibility issues. Claims audits typically review a statistical sample of claims and extrapolate findings to the full claim population.

Rebate audits verify that the PBM passed through the contractually required percentage of manufacturer rebates. Rebate audits require access to the PBM's rebate data, which many contracts limit. The definition of "rebates" in the contract significantly affects what is included in the audit scope.

Operational audits evaluate service-level agreement compliance, including claims processing accuracy, call center metrics, prior authorization turnaround times, and member satisfaction scores.

Common Audit Findings

Audit findings typically include pricing guarantee shortfalls requiring true-up payments, generic dispensing opportunities where brand drugs were dispensed unnecessarily, rebate pass-through discrepancies caused by differing definitions of eligible rebates, and claims processing errors affecting a small percentage of total claims.

Maximizing Audit Value

Negotiate broad audit rights before signing your PBM contract. Audit rights that are limited to pricing guarantees miss the majority of PBM economics. Insist on access to pharmacy reimbursement data, complete rebate reporting by manufacturer and therapeutic class, and the ability to audit specialty pharmacy operations.