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An audit performed for the Arkansas Insurance Department of the state’s three dominant pharmacy benefit managers found different-sized pharmacies were paid different amounts for the same drugs last year, though in most arrangements it wasn’t considered significant, and that at least two of the PBMs charged pharmacies “clawback” fees.
But one PBM, CVS Caremark, says differential payments are normal, and it objects to the audit’s reliance on only one contract to make a determination about those clawback fees, which were legal at the time.
The limited scope examination was conducted of the PBMs serving the state’s Arkansas Works and Provider-led Arkansas Shared Savings Entity (PASSE) health plans. PBMs serve as middlemen between insurers and pharmacies.
The PBMs audited were CVS Caremark, Optum RX and Express Scripts. CVS Caremark provided PBM services for Arkansas Blue Cross and Blue Shield, Centene and the Empower PASSE. CVS Caremark accounted for 85.16% of the Arkansas Works claims examined.
OptumRX was the PBM for Qualchoice. Express Scripts was the PBM for the Summit Community Care PASSE.
The audit covered Jan. 20 to June 30, 2019. The firm, Lewis & Ellis of Allen, Texas, used data only from March 2019 and extrapolated the findings for the rest of the period. The examination was completed on July 27, 2020, and posted Oct. 28.
The audit focused on spread pricing, which occurs when a PBM pays pharmacies less than it was paid by the insurer and pockets the difference. The practice was made illegal by a 2019 law. It also covered two other practices: differential payments where pharmacies are paid different amounts for the same drugs, and direct and indirect renumeration fees, or clawback fees, which are retroactive fees assessed on pharmacists after drugs are dispensed.
The examiner found CVS Caremark and OptumRX had no significant spread pricing. However, it found that more than 83% of claims administered by Express Scripts through the Summit Community Care PASSE showed spread pricing practices. That amounted to more than an 18% difference between what Express Scripts charged the health plan and what it paid the pharmacy.
In its rebuttal, Express Scripts objected to the examiner’s definition of “spread pricing.” It said the auditors calculated spread incorrectly, and it objected to the audit report extrapolating from only one month’s data.