Best Practices for Out-of-Stock Medications

Most PBMs perform invoice audits on an aggregated basis and total all claims billed to their particular PBM over an entire date range (e.g. 12 months). The totals of each NDC billed are then compared against the pharmacy’s purchases from authorized wholesalers over a similar period. If a pharmacy has an “inventory shortage”, it is commonly explained by a missing wholesaler purchase file, wrong NDC billed, purchases from an unauthorized wholesaler, or even product on the shelf prior to the date range.

Occasionally, pharmacies have shortages due to a claim being billed at the end of an audit date range for a medication that the pharmacy has not ordered/stocked before. If this out-of-stock claim falls inside the audit date range but the date of invoice falls outside (after) the date range, this can create a mathematical shortage. These situations are generally rare but can create issues for pharmacies undergoing an invoice audit.

Most PBMs have language that states the date of service must reflect the date the prescription is “prepared/readied for dispensing”, which they can argue isn’t possible without the drug on-hand. OptumRx, Horizon NJ Health, and NJ Medicaid take the language in their Provider Manuals (or Agreements) even further, indicating that pharmacies are required to have product in stock prior to even submitting a claim for the drug product. This requirement is highly impractical as pharmacies cannot afford to stock every medication that exists and do not know if a prescribed medication is even covered (or if patient even wants it) until after the claim is billed. Pharmacies should consider reversing claims for high cost, out-of-stock medications and rebilling them after the product has been ordered and is on-hand to reduce audit liability.

PAAS Tips:

• Pharmacies should evaluate their out-of-stock medication policy to determine the pros and cons of the reverse/rebill process
  • FWA/HIPAA Compliance Program members can refer to section 4.1 Risk Reduction of the PAAS National^® FWA/HIPAA Policy and Procedure manual
• Review previous articles for other tips to reduce invoice audit problems
  • 2024 Self-Audit Series #3: Invoice Audits (May 2024)
  • Caremark Invoice Audits – Purchases from Other Pharmacies (April 2024)
  • Invoice Audits Are on the Rise – Are You Prepared for Success? (July 2023)