Preparing for an On-site Insurance Audit at Your Pharmacy
On-site insurance audits are a routine event that most community pharmacists will encounter at some point in their careers. Unlike Board of Pharmacy inspections, which are typically unannounced, insurance audits are usually scheduled and pharmacies are notified in advance. This is a huge advantage, because it gives them time to prepare for a smooth audit.
Let’s look at what happens during an on-site audit and how pharmacies can best prepare. The Academy of Managed Care Pharmacy’s guidelines for pharmacy audits is a good place to start in understanding both on-site and desk audits.
What happens during an on-site audit?
During an on-site audit, a representative from the insurance company comes to the pharmacy with a list of prescription numbers and documentation requirements that must be submitted to their employer. If you are well prepared and easily able to provide all the information, the audit can take just 1 to 2 hours.
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While the exact process can vary by payer, the insurer will usually notify the pharmacy of the audit about 2 to 3 weeks beforehand. The notice will also include prescription number ranges, or a list of prescription numbers with the last two numbers blank, so that you will at least know what book the prescriptions will be in. While it is rare, payers can sometimes audit the pharmacy unannounced, which can be tough, but it’s one more reason to invest in a computer system that will store images of the prescriptions.
In my experience, auditors are not there to keep digging until they find something. Rather, they are there to complete the checklist of requirements from the insurance company. Helping them complete it means more time back in both of your days. When I was working in Maui, for example, I had an on-site audit that took barely an hour; the auditor got done so quickly we ended up spending time talking about things he could do on the island during his visit.
After the audit is complete, and the auditor has received everything they need, the pharmacy will receive the results within 30 to 45 days. The results will either indicate that there were no discrepancies, or what those discrepancies were, if any. The pharmacy then has a chance to respond to those issues and provide additional documentation. Finally, the payer will send the final audit results, and if the pharmacy still does not agree with them, it will have the chance to appeal those results.
What’s requested during an audit?
The documents required can include, but are not limited to the following:
Copies of pharmacy licenses
General and professional liability insurance
Purchase invoices
Training documentation
Prescription documentation requests can include:
Copies of the prescriptions (scanned images, copies, or printouts of electronic prescriptions)
Prescriber notes
Proof of pickup, including signature and date/time stamp
Additional documentation like pharmacist notes with date/time stamps
For more detail about a specific payer’s requirements during an on-site audit, you can take a look at provider manuals and other resources. Humana and OptumRx are two examples with readily available information on their websites.
What can I do to prepare?
In addition to gathering general documents in advance, pharmacists can also prepare by:
Having a folder ready for the auditor. I highly recommend you use the notification letter as a checklist for items you need to have on hand. When I have on-site audits, I like to make copies of all the required documents, put them in a folder, and hand them to the auditor as soon as they walk in the door. It sets a great tone for the rest of the audit, and also will result in a much smoother and quicker process.
Pulling books in advance. If your pharmacy dispensing system stores an image of the prescription, that is usually sufficient. If not, or if images are not consistently scanned, it is best practice to pull all the books in advance of the audit. Electronic prescriptions can be printed from the dispensing system as they are requested on the day of the audit.
Scheduling extra help. Although an audit that goes smoothly can be as brief as an hour, it pays to bring in a little extra help if possible that day so you can dedicate time to the audit.
Notifying your supervisor. It’s a good idea (even for a pharmacy manager) to let your supervisor know of the upcoming audit, whether that is the owner in the case of a smaller independent, or the regional director. At the very least, they will want to be aware of it, and some companies prefer to maintain central records of all audits and inspections. Also, that person can be a resource for you to ensure the pharmacy is ready.
The bottom line
On-site audits don’t need to be intimidating, time-consuming, or difficult. With good billing practices and adequate preparation, and by following these tips, you’ll be ready to ace your next audit.
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