Specifications include, but are not limited to: 2.2 Pharmacy Claims and Performance Audit Services 2.2.1 At the request of the Board, at least annually perform a comprehensive and objective audit of all the claims processed by the Plan’s pharmacy benefit manager to determine if the pharmacy claims were adjudicated according to appropriate Plan benefits, the contractual standards, industry standards, and State and federal regulations. A detailed operational audit of the Plan’s pharmacy benefit manager shall include, but is not limited to, the following: a. Pharmacy Claims Payment and Pricing – Electronic re-adjudicating of 100% of all claims transactions to include, but not limited to, determining if the appropriate benefit plan design, application of deductible, co-payments, average wholesale price (AWP) pricing and discounts, maximum allowable cost (MAC) pricing, and generic substitution were used in adjudicating the claims. Auditor will: i. Perform a full contract review specific to the agreed-upon timeframe; ii. Review 100% of paid claim transactions; iii. Benchmark contract terms and pricing against best practices, market norms, and other similar size plans; iv. Confirm that claims have been paid according to contract terms and identify differences; v. Compare AWP used on claim file to MediSpan; vi. Compare brand/generic classification used on claim file to MediSpan; and vii. Confirm that claims reflect transitions consistent with current Pharmacy Benefit Manager (PBM) pricing commitments and are consistent with actual claim charges. b. The pricing component of the audit includes an analysis of discount guarantees and is designed to thoroughly examine the PBMs financial performance by validating the following parameters against contractual requirements: i. Network discount guarantees for brand and generic, including retail and mail ii. Discount claims iii. Actual discounts received (brand and generic) iv. Administrative fees v. MAC drugs (including overall generic discount) vi. Single source generics (including recent brands off patent) vii. Specialty drug discount guarantees viii. Brand and generic dispensing fees (retail and mail) ix. AWP discounts c. Pharmacy Network Agreements Audit – The objective of this review is to verify the actual discounts, dispersing fees, and related requirements match the terms and conditions in the executed network participation agreements in effect during the review period and likewise agree to the amounts charged to the Plan. The audit is subject to include, but is not limited to, the following: i. Review of network pharmacy contracts; ii. Validation of discounts and dispersing fees received from networks by PBM; and iii. Top five (5) chain and top five (5) independent pharmacies by claims volume. d. Rebate Audit – An analysis of rebates to determine the level of rebate due the Plan. The rebate audit is subject to include, but is not limited to, the following: i. Audit of drug manufacturer contracts for base/formulary, market share, and any other applicable rebates which may be applied to the Plan’s drug utilization; ii. Comparison of amounts invoiced to the drug manufacturer by the pharmacy benefit manager to identify discrepancies; and iii. Comparison of the actual total rebates per claim compared to the rebate guarantee. e. Cost Containment Procedures - The Auditor will analyze and provide recommendations for cost containment procedures. This review is subject to include, but is not limited to, the following: i. Step Therapy Adherence ii. Contingency Therapy iii. Formulary Adherence f. Operational Review – A detailed operational audit of the PBM shall include, but is not limited to, the following: i. Claims payment system ii. Pharmacy Audit Process iii. Exception processing iv. Mail (paper claim) receipt and tracking v. Forms and communication process vi. Training programs and employee evaluation process vii. Quality procedural manuals provided to claims processing, customer service, etc. viii. Evaluation of the security of records and data ix. Security and override procedures relating to approval of claims and access to records x. Internal audit process xi. Compliance with HIPAA/HITECH Act to verify the Plan’s vendors are HIPAA compliant during the annual claims and performance audits xii. Evaluation of customer service, including communication of the Plan’s benefits and audit of performance guarantees related to call answering response time and abandonment rate g. Fraud, Waste and Abuse Review
