PillarRx completed an Annual Delegation Audit on behalf of a health plan client. This health plan client has over 200,000 members across Medicaid and Medicare lines of business. PillarRx reviewed the PBM’s eight delegated services. Below is a summary of findings following the annual delegation audit.   

Prior Authorization  

PillarRx made recommendations to the PBM to enhance their documentation processes to include more detail around resources used, outreach, and review notes in general. Recommendations were also made for the PBM to collaborate and meet on a consistent basis to review letter templates and rationale language with the Client. The PBM reviewed the recommendations and has responded indicating that there are no barriers from preventing the process improvements and that they have already begun the implementation of these recommendations.  

Formulary Administration  

PillarRx found that the PBM met industry standards. PillarRx made recommendations for the PBM to share their internal formulary change memo and to follow up with the Client to share the results of changes being made to the formulary. The PBM indicated that that follow-up is communicated through weekly operations calls and emails. PillarRx continued to recommend the PBM share results and changes through written communication and share with the Client for documentation purposes.  

Formulary Related Rejected Claim Review  

PillarRx found that the claims rejected appropriately according to the formulary. PillarRx made recommendations to the PBM around making sure the Quantity Limit (QL) coding matches the QL approved for the product, as a result, the PBM agreed to update their processes to include additional claims testing on medications that have a QL.  

Pharmacy Credentialing  

The PBM responded that they provide the “NCPDP Data Validation Process” to the plan monthly. PillarRx recommended that the PBM send an email to the Client’s Pharmacy Team when it was posted, as well as a summary of the results. This process demonstrates the oversight of the accuracy of the data that is provided for the provider directory and it should assist the plan in remaining compliant with the state’s accuracy requirements.  

PillarRx identified a finding with the current process that the PBM is following that verifies pharmacy informationThe PBM should update their Pharmacy Contracts to include language making it a requirement for Pharmacies to ensure NCPDP has the correct information listed. This update will allow the Plan to remain compliant with state requirements. The current monthly audit process identifies issues but there is no requirement for pharmacies to update their information with NCPDP and there is no ramification to the pharmacies if they do not keep the NCPDP information updated and correct.   

Pharmacy Network Management  

PillarRx has reviewed the PBM pharmacy contracting, auditing, and networking policies and procedures and has noted two findings that have been previously discussed with the PBM in preceding audits.  

PillarRx expects the PBM to enhance their monthly audit process to verify accurate pharmacy information by enforcing penalties to pharmacies if the information is not kept updated and accurate. The PBM has responded that they are currently looking at adding contract language for updating NCPDP as a contract requirement and will place Chain Pharmacies on a corrective action plan if updates are not made within five days. PillarRx expects the PBM to provide updates to the Client regarding changes. PillarRx also expects the PBM to review all claims, across all lines of business and clients, to identify global trends that may be impacting the Client’s claims that otherwise would not have been seen. The process discussed onsite indicated audits were only reviewed per client across all lines of business. 

PillarRx also reviewed the PBM’s processes for ensuring Cultural and Linguistics (C&L) requirements are being met and found, based on the policy and procedures and additional information provided by the PBM, improvements have been made since the prior year’s audit. However, the PBM continues to not provide confirmation that all requirements are being met. PillarRx calls this out as a finding again and expects the PBM to continue to enhance their policies and procedures to include all requirements as mandated and to continue to work closely with the Client to ensure expectations are met.  

HIPAA Compliance  

PillarRx found the PBM met industry standards and did not have any recommendations for improvement.  

Fraud, Waste, and Abuse (FWA)  

PillarRx found the PBM met industry standards and did not have any recommendations for improvement.  

NCQA Crosswalk  

PillarRx finalized the review of the previous year’s Crosswalk provided by the PBM and find the document contains the supporting evidence and compliance statements as expected. We understand that the PBM updates and completes an NCQA Crosswalk every two years for maintaining accreditation. PillarRx will review this crosswalk every other year and recommends the PBM be prepared to share the supporting evidence that confirms how the elements contained in the crosswalk are met.

Three of the findings were added to a Corrective Action Plan (CAP) following PillarRx’s review of the deficiency language and confirming the regulation/service agreement that was impacted. PillarRx also supported the Client with discussions and review of the actions documented and taken by the PBM. 

  1. Per DHCS Contract & Senate Bill 137, all plans are required to ensure the accuracy of data presented in the provider directory, including a verification process to correct any identified errors in a timely manner.   
  2. Per Title 28 Section 1300.71(s), all plans are required to establish a claims quality assurance program in order to ensure compliance with regulatory requirements.  Per CA Health & Safety Code Section 1370, the quality assurance program must include the comprehensive evaluation of complaints and trends, in order to identify instances of contractual or regulatory non-compliance that require corrective action.
  3. Per DHCS Contract, all plans are required to provide appropriate interpreter services for members at key points of contact at no cost to the members. The PBM’s policies & procedures do not document the delegate’s policy for discouraging members from using family members or friends as interpreters.  The policies and procedures also do not reflect how the member’s refusal to use interpreter services is documented in the members’ records.

Overall, the audit revealed that the PBM continued to manage their delegated functions responsibly and with sound practices and procedures, but they did not exceed industry best practices. The PBM was cooperative with each phase of the audit and the staff was helpful, accommodating, and prepared for the onsite review components. After reviewing the PBM’s policies and procedures, case samples, and walking through systems and internal processes, PillarRx identified 11 recommendations for improvement and 4 findings. The PBM acknowledged and/or agreed with the recommendations of the audit team.