The Blight of PBMs Credentialing on Independent Pharmacies

blight of insurance credentialing on independent pharmacies


Between low reimbursement rates, DIR fees, GER fees, and PBM’s there has been an unnerving amount of independent pharmacies close. A national survey by NCPA in 2019 reported that 58 percent of pharmacies may close in the next two years. Here in western Pennsylvania we’ve witnessed several independents close and display signs blaming PBM’s.

In a March 2020 APhA article called "Behind closed doors: What happens when pharmacies close?" shared "27% of the pharmacies that closed in urban areas and 23% of those in nonurban areas were independently owned."

No one can afford to lose their contract with OptumRx, Humana, and CVS Caremark, but, that's exactly what's happening to pharmacies across the country right now. Even during the pandemic, pharmacies continue to be audited and credentialing is still the main focus. What are you doing to help protect your pharmacy? Do you have Policies & Procedures in place? Are you doing annual compliance training?

If you’ve ever thought these are non important actions or documents in the past, I can assure you they are extremely important as these documents are required for Medicare Part D. Without them, you are vulnerable and risk losing your contracts. Could your pharmacy remain open if you lost your OptumRx, Humana, or CVS Caremark contract?  Insurance Credentialing effects are causing a blight on Independent Pharmacy.  Blight is defined as "noun: a thing that spoils or damages something" or "verb: have a severely detrimental effect on" so I can't think of a term more appropriate for this issue as blight.

Let’s look at your policies & procedures; you should have these for both your operations and billing practices. Policies range from return to stock, patient counseling, safe medication practices, expiration dates, and overfills. Next, are you completing annual training for HIPAA, Fraud, Waste, & Abuse Prevention, and certifying Conflict of Interest? Are you keeping signed, and dated, records of training? Please know, if it is not signed AND dated, it is as if the training never occurred. Having well documented records is vital to passing these credentialing audits. While these items are good practices and may be required by your state board of pharmacy or accreditation organization, the bigger issue is they are all required by the PBM’s.

You are probably thinking, “this is a big problem”, “I don't have the time”, and “how am I ever going to get this done with everything else they keep throwing at me?” We agree; there’s too much to do and not enough time in the day to accomplish all the back-end items while effectively taking care of your patients. With a little planning and some annual consistency, you do have the ability to have an organized process where you're not overwhelmed, your staff is not overwhelmed, and you can comply with all these regulations and guidelines, so you are always ready for the auditors if they show up.

Being unprepared for an audit and struggling to produce the requested documentation generally doesn’t end well. Unfortunately, many pharmacies lose their contracts, and often the only option is to sell the pharmacy.

My oldest daughter always says, “do what you do best and contract the rest.”  While your primary focus needs to be your patients, allow us to help with your compliance needs.  At R.J. Hedges & Associates we have solutions to all of the stress points identified above and options from a la cart policies, all the way to complete compliance packages. Your files will be customized for you and your operation; members of your staff will access all your files on our Compliance Portal® in easy-to-use program directories. Each month you’ll receive Compliance Task Lists, where you’ll have a clear plan of what to do whether it is review policies, watch training videos, complete internal audits, etc. Our monthly newsletters keep you abreast of important compliance news and highlight suggestions, and actions, where you can take to learn from other pharmacies.

Keep in mind, compliance is always changing.  This is evident with CVS Caremark, which now requires pharmacies to produce a certificate of participation in a patient medication safety program and a patient safety organization.  For years, R.J. Hedges & Associates clients get a free enrollment  with APMS, a patient safety organization, when they have our Pharmacy or Compounding Compliance Programs. Contact a Compliance Strategist to discover the programs and features that can help make  your pharmacy stay Stress free and in compliance!

Jeff Hedges

R. Jeffrey Hedges, CDME, is President & CEO of R. J. Hedges & Associates of New Florence, PA.

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