When the Margins Are Thin, Self-Audit for the Win
It is no secret that margins on prescription medications have declined dramatically over the last few decades. Independent pharmacy owners are well aware of their less-than-favorable Pharmacy Benefit Manager (PBM) contracts, and their propensity to routinely audit. After working day in and day out to take care of the patients in your communities, auditors swoop in and use the smallest ambiguous detail on a prescription to recoup against a claim. It is easy to understand why many independent pharmacy owners, operators, and employees get a sour taste in their mouth at the sheer thought of PBMs and auditors.
To decrease the likelihood of an unfavorable audit, PAAS National® analysts recommend routinely performing self-audits. In fact, the 2024-2025 Self-Audit Newsline Series just wrapped up and all 12 articles can be used to help reduce your pharmacy’s risk.
What is a self-audit?
A self-audit is a process used to validate prescriptions, ensure claims are billed appropriately and confirm all applicable documentation is accounted for to substantiate the validity of a claim. Self-auditing and monitoring serve as effective tools for assessing adherence to pharmacy policies and procedures, along with ensuring compliance with external regulations. The primary objective of a pharmacy’s self-auditing program should be to prevent, detect and eliminate risks related to fraud, waste and abuse, while also mitigating PBM audit liability.
When should a self-audit be performed?
Self-audits should be performed on a routine basis, and the beauty of a self-audit is that it can be done at any time! It is a great activity for the less busy hours of a work week. The frequency can also be determined by the number of components you wish to audit. Some pharmacies will audit a small number of rotating items on a very regular basis while others may perform a larger self-audit of all elements they monitor on a less frequent schedule. Assigning an individual (or several) to perform these audits and creating a moderately flexible timeframe to complete this task is one way to ensure this important proactive measure does not fall by the wayside.
What items or components are worth the time to self-audit?
There are a wide range of components to consider auditing, which come down to the audit risks your pharmacy would face. Below is a table of high audit risk claims that are likely applicable to your pharmacy and may warrant a self-audit.
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PAAS Tips:
- Members with the PAAS Fraud, Waste & Abuse and HIPAA Compliance program can:
- Find information about internal audits in Section 5.1 of your Policy & Procedure Manual
- Use the Internal Auditing and Monitoring Plan found in Appendix B of your Policy & Procedure Manual
- Consider reviewing the additional PAAS resources which may be applicable to multiple categories of medications:
- Need a second opinion regarding your self-audit findings? Contact us and the first available analyst will reach out to further discuss your concerns.
I enjoy assisting pharmacy staff both pre- and post-audit and enjoy providing them with knowledge and tools to decrease audit risk going forward. I write articles for Third-Party Newsline each month and answer member questions daily. I look forward to building professional relationships with each of our members and assisting you with your next audit.
- When the Margins Are Thin, Self-Audit for the Win - April 7, 2025
- The Next Big Wave: Anticipating a Surge in HIPAA Compliance Audits - March 28, 2025
- The NEW Inventory Transfer Log and Why it Could Save You Big! - March 14, 2025
