A payor audit may begin as a routine request for pharmacy records, but the way a pharmacy responds can have consequences far beyond the audit itself.

A recent DOJ prosecution involving a New Jersey pharmacy highlights the potential risks. According to the DOJ, the case involved falsified prescription authorization documents, false prescription pickup records, and fraudulent claims submitted to health benefit programs. The pharmacy owner and a pharmacy technician ultimately received prison sentences and were ordered to pay significant restitution.

The case is an important reminder that records submitted during an audit may later become evidence in a civil or criminal investigation.

A Payor Audit Is Not Simply an Administrative Exercise

Pharmacies often view audits as part of the normal reimbursement process: provide the requested records, explain disputed claims, and address any findings.

But once questions arise about documentation, prescription records, billing, or the accuracy of submitted information, the potential consequences can become much more serious.

An inaccurate or intentionally falsified audit response can create legal exposure separate from the original audit. Even efforts to explain or correct an issue should be handled carefully when the underlying records may be reviewed by government investigators.

Pharmacies facing these concerns should understand how pharmacy audits can develop into broader legal or regulatory matters.

What Pharmacies Should Consider Before Responding

Before submitting an audit response, pharmacies should take a careful look at:

• What records the auditor is requesting

• Whether the records are complete and accurate

• Whether documentation supports the claims at issue

• Whether there are inconsistencies between records

• Whether the audit raises broader compliance concerns

• Whether the matter could develop into a government investigation

A pharmacy should also avoid creating or altering records simply to fill documentation gaps. The response should accurately reflect the records that existed and the circumstances surrounding the claims.

When an Audit Can Lead to a Larger Investigation

A payor audit does not necessarily mean that criminal conduct is being investigated. However, significant discrepancies or concerns identified during an audit may lead to additional scrutiny.

Depending on the circumstances, a pharmacy could face further action involving a payor, government agency, or law enforcement authority. A matter that begins with an audit can potentially develop into civil litigation, government investigations, or criminal prosecution.

This is why early legal review can be important when an audit raises serious concerns.

The Importance of a Careful Audit Response

The response to an audit can shape how the matter develops. A well-prepared response should address the auditor’s questions accurately while avoiding unnecessary statements or unsupported explanations.

Pharmacies should consider whether the audit is truly limited to reimbursement issues or whether the questions suggest broader concerns about billing practices, documentation, prescription records, or compliance.

For pharmacies and pharmacy organizations, maintaining appropriate compliance practices and responding carefully to regulatory concerns are important parts of protecting the business and its ability to operate. More information is available through MDRXLAW’s pharmacies and pharmacy organizations practice area.

Taking these issues seriously at the outset can help a pharmacy address the audit while reducing the risk of creating additional legal problems.

How MDRXLAW Can Help

MDRXLAW represents pharmacies and healthcare providers in PBM audits, payor investigations, government inquiries, and healthcare fraud enforcement matters.

If your pharmacy is responding to an audit or facing concerns about its records or billing practices, contact MDRXLAW at info@mdrxlaw.com or 212.668.0200 to discuss your situation.