Your Rights in a PBM Termination Appeal

We have been seeing a spike in pharmacy benefit management (PBM) network terminations. Termination from a PBM's pharmacy network can be catastrophic to a pharmacy's business. Many PBM terminations are not "for cause." The PBM simply decides to eliminate the pharmacy from its network. Other terminations are initiated after the PBM audits the pharmacy and finds one or two record keeping errors (i.e., where no fraudulent conduct was found). We have been seeing many small discrepancies found in wholesale invoice audits as well that have led to PMB terminations.

Each of the largest PBMs covers such a large percentage of any pharmacy's business that simply accepting termination from the PBM network is not an option.

So what can you do once you have been notified that you are being terminated? Know your rights. Your rights to contest a termination are primarily based on your pharmacy contract and the law. If you contract through a pharmacy services administrative organization (PSAO), then contact your PSAO and ask for a copy of your contract. Make sure to ask for a complete copy of it including all amendments. Also ask for or obtain a copy of the PBM's provider manual.

Texas law provides certain rights to providers (including pharmacies) that are to be terminated from a network. These rights include right to notice, a request for a review of the decision by an independent panel, a restriction on communications with your patients pending the review and deadlines for many of these steps to be completed.

Once you receive a notice of termination from your PBM, you should act quickly to protect your rights.

You should also proactively respond thoroughly to any PBM audit of your pharmacy. We have seen audits finding one or two errors and small recoupments leading to terminations. Take audits seriously.

If you are in the process of being terminated by your PBM or are undergoing a PBM audit, please do not hesitate to contact Taylor Dunham and Rodriguez LLP for legal assistance.

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