CGI Federal Inc. undertook a complete pharmacy claims audit
of a large Southwestern U.S. State’s self-insured health and welfare fund
group
CGI Federal Inc. undertook a complete pharmacy claims audit of a large
Southwestern U.S. State’s self-insured health and welfare fund group. The
pharmacy claims history covered a 19-month time span including 947,303 claims
paid totaling $26,339,454. The prescription plan was uniform for all subscribers
and limitations were placed on several drug categories that were excluded.
The Challenge
The plan was dissatisfied with its pharmacy benefit
firm and Drug Utilization Review (DUR) vendor due to complaints and a lack of
response to the plan’s requests for improvements in their administrative
functions and accountability procedures. Also, as a result of administrative
errors, lack of proper adjudication edits and a low level of cooperation by the
PBM when requests for information from the network pharmacies were made, the
pharmacies were lackadaisical in making attempts to correct plan parameter
errors potentially leading to additional misuse of the prescription benefit.
How CGI Helped
Using our proprietary pharmacy claims auditing
system, CAS-RX, CGI audited and verified the integrity of all parameters of the
benefit design, plan pricing and retrospective DUR programs. An audit of the
highest dollar prescriptions dispensed showed five claims totaling over $16,000,
where the quantity dispensed was unrealistically high, that escaped the internal
edit of the PBM to flag these claims for adjustment. An audit of intravenous
medications showed 363 claims totaling $91,973 erroneously billed through retail
pharmacies for items such as chemotherapy, medications administered prior to
inpatient surgery and IV admixtures. The client, trying to lower the frequency
of dispensing fees charged for repeat prescriptions of maintenance drugs by
mandating 90-day supplies, requested an audit of the number of prescriptions and
claims dollars that were dispensed in less than thirty-day supplies. The audit
showed a total of 75,539 claims dispensed in under a thirty-day supply. If the
proper edits had been in place, two-thirds of the dispensing fees could have
been eliminated for an additional savings of approximately $100,000. A duplicate
therapy audit was designed to assess the quality of the DUR and oversight that
was occurring by the PBM. Duplication of therapy is costly not only because of
unnecessary prescriptions that are being dispensed, but also because of medical
complications that can occur. The audit was designed in a very conservative
fashion to display duplication at the extremes. Maximum daily adult dosages were
used to calculate a minimum day supply range. There were 14,921 instances
suggesting that an increased effort in DUR screening would be beneficial to the
plan and its patients. The audit system, including analyses of subscribers,
pharmacies and physicians, also highlighted instances where case management and
DUR would be likely to save prescription benefit dollars in the future with
intervention strategies and showed members utilizing high cost medication, with
the highest utilization rates and greatest dollars in prescription spending.
The Results
The recovery from the audit totaled $771,695
involving 391,254 prescription claims. This represented 2.9 percent of the
prescription claims dollars and 41percent of the claims respectively. 30 percent
of these dollars were attributed to duplicate claims, 39 percent to AWP pricing
errors and incorrect discounting and 31 percent were excluded drug category
prescriptions that were dispensed. Almost 97 percent (377,908) of the claims
recovered resulted from incorrect AWP prices and/or discounts being applied to
brand name drugs. Over 342,000 of these claims were incorrectly priced by up to
$1.00, 33,000 claims were incorrectly priced between $5.00 and $1.00 and the
rest of the claims were incorrectly priced between $1,000 and $10.
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