Experienced Cigna Pharmacy Audit Defense Attorneys - Oberheiden, P.C.
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Cigna Pharmacy Audit Defense

All pharmacies that contract with Cigna are subject to periodic audits by Cigna or its designee. If your pharmacy is facing a Cigna audit, you will need to hire experienced Cigna Audit Defense Attorneys, in order to avoid unnecessary retractions and other penalties.

Pharmacies in the United States are subject to numerous rules, laws, and regulations. In addition to federal laws and regulations such as the Controlled Substances Act (CSA) and the U.S. Drug Enforcement Administration’s (DEA) registration regulations, this includes the rules imposed by their pharmacy benefit managers (PBMs). Cigna, in particular, imposes strict requirements for pharmacies, and it enforces these requirements by conducting audits on a routine basis.

If your pharmacy is being audited by Cigna, you must be prepared to defend against the audit in order to avoid unnecessary retractions and other penalties. Cigna’s auditors will be looking for evidence of any and all compliance violations, and lack of documentation of compliance will itself be considered evidence of non-compliance. At Oberheiden P.C., we have extensive experience representing pharmacies in PBM audits, and our defense lawyers and pharmacy consultants can use their experience to help you avoid unwarranted penalties resulting from a Cigna inquiry.

About Cigna’s Pharmacy Audit Program

As one of the nation’s largest PBMs, Cigna maintains a large-scale audit program that involves various subsidiaries and third parties. As explained in Cigna’s Pharmacy Manual:

“All claims submitted by Pharmacy and paid by Cigna or Cigna HealthSpring are subject to audit including compound prescription and TPN claims. Cigna or its designee will conduct periodic audits of Pharmacy’s claims submission activities to ensure compliance applicable pharmacy agreements and this Manual. Desktop and on-site audits are conducted. Pharmacy is contractually obligated to comply fully with the Cigna’s and Cigna HealthSpring’s Audit Program and shall cooperate with all auditing activity. Pharmacy shall provide all prescription, medical, financial and administrative records pertaining to Cigna or Cigna HealthSpring’s Participant Covered Services upon request and within the timeframes specified by Cigna or its designee.”

In other words, Cigna has the contractual right to audit pharmacies as it deems necessary, and pharmacies have a contractual obligation to “cooperate” in the audit and provide all requested documentation. Even for pharmacies that are fully compliant, this can present a significant burden, and failure to provide requested documentation can lead to retractions regardless of the validity of the underlying claims. For pharmacies that have committed billing errors, the process of cooperating with a Cigna audit must be approached very carefully, and any known issues will likely need to be addressed proactively with the advice and representation of pharmacy defense counsel.

Cigna Audits: Desktop vs. On-Site

As referenced in the quote above, Cigna conducts two types of audits: desktop and on-site. Desktop audits are performed remotely, and involve auditors reviewing pharmacies’ prescription and billing records without much (or any) direct contact. During an on-site audit, Cigna’s auditors will come to your pharmacy’s location, and they will physically inspect your pharmacy’s books and records. Auditors may also ask questions of the pharmacist-in-charge and other pharmacy personnel during the process.

As explained in Cigna’s Pharmacy Manual, issues that will be examined during a desktop audit include, “but will not be limited to,” the following:

  • Dispense-As-Written (DAW) Parameters
  • Duplicate Therapy/Prescriptions
  • Excessive Quantity Dispensed for Day Supply Limitations
  • Early Refill
  • Possible Prescription Splitting
  • Package Billing Errors
  • Drug Billed is Different Than That Dispensed
  • Valid Prescriptions

On-site audits generally target more-substantial compliance issues; and, as a result, the potential ramifications tend to be greater as well. To this end, records that may be examined during an on-site Cigna audit include:

  • DAW Notations
  • Hard Copy Prescriptions
  • Signature Logs
  • Drug Prescribed/Dispensed Records
  • Prescribing Physician Records
  • Cigna Program Parameters
  • Return-to-Stock Prescription Records

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden



John W. Sellers
John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

Local Counsel

Joanne Fine DeLena
Joanne Fine DeLena

Former Assistant U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney & Former District Attorney

Local Trial & Defense Counsel

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley
Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (OIG)

Michael Koslow
Michael Koslow

Former Supervisory Special Agent (FBI)

Chris Quick
Chris Quick

Former Special Agent (FBI & IRS-CI)

Kevin M. Sheridan
Kevin M. Sheridan

Former Special Agent (FBI)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Dennis A. Wichern
Dennis A. Wichern

Former Special Agent-in-Charge (DEA)

Common Allegations During Cigna Audits

With regard to each of the types of issues and records that are subject to review during a Cigna audit, there are various broader considerations that will guide auditors’ decisions and of which pharmacy owners and pharmacists-in-charge need to be aware. By adhering to and establishing Pharmacy compliance in these areas, pharmacies can substantially reduce their risk of retractions and other penalties, and they can position themselves to successfully defend against Cigna audits.

Key focus areas with regard to pharmacy compliance and Cigna audit defense include:

  • Prescriber and Drug Source Verification – Pharmacies have an obligation to verify the source of both the prescriptions they fill and the prescription drugs they dispense. On the prescriber side, pharmacies must check the Department of Health and Human Services’ Office of Inspector General’s (DHHS OIG) list of excluded providers, and they must avoid filling prescriptions from ineligible physicians. On the prescription drug side, pharmacies must maintain strict compliance with the Drug Supply Chain Security Act (DSCSA), including verifying all tracking information and performing drug quarantines and inspections as required.
  • Documentation of Compliance and Record Retention – In order to avoid liability in a Cigna audit, pharmacies must have comprehensive documentation of their compliance efforts. In addition to the documentation required by statutes, rules, and regulations, this includes documentation of pharmacies’ day-to-day compliance efforts. Pharmacies must adhere to stringent record retention policies as well; and, at a minimum, these policies must adopt the federal mandates for retaining drug ordering, prescription, patient, and billing documentation.
  • Prescription Filling and Dispensing Compliance and Controls – Of course, the purpose of all of these compliance requirements is to ensure that patients receive the right medications in the right quantities. As a result, during a Cigna audit, auditors will be looking for any evidence of prescriptions being filled incorrectly or prescription drugs being dispensed in an unsafe or non-compliant manner. In addition to audit penalties, significant compliance issues can also lead to a federal prescription fraud investigation.
  • Billing Compliance and Controls – Billing compliance is a key area of concern for pharmacies that bill private payors, Medicare, and other government benefit programs. Cigna auditors meticulously examine pharmacies’ billing records for evidence of a broad range of billing violations, from coding errors and patient misidentification to double-billing, prescription splitting, and other forms of pharmacy billing fraud.
  • Licensing and Registration Compliance – Licensing and registration violations can have broad ramifications for pharmacies, including (but by no means limited to) retractions and claim denials in Cigna audits. If a pharmacy or pharmacist is not licensed or registered as required, then this could lead to all billings submitted to Medicare and other payors being deemed invalid.
  • PBM Contract Compliance – Cigna and other PBMs impose substantial obligations on pharmacies through their PBM contracts. As a result, in addition to maintaining federal compliance, pharmacies must maintain contractual compliance as well. Contractual violations can have varying consequences, ranging from retractions and claim denials to contract termination.
  • Mail Order and Telemedicine Compliance – Filling mail order and telemedicine prescriptions presents a host of unique compliance obligations for pharmacies. If your pharmacy is being audited by Cigna and your pharmacy fills mail order or telemedicine prescriptions, you will need to be prepared to affirmatively demonstrate compliance with all pertinent laws and regulations.
  • Compounding and Specialty Pharmacy ComplianceCompounding pharmacies and specialty pharmacies face unique compliance burdens as well. Audits targeting these pharmacies focus on both the general aspects of pharmacy compliance and the unique aspects of operating a compounding or specialty pharmacy; and, again, pharmacy owners and pharmacists-in-charge must be prepared to clearly demonstrate consistent and ongoing compliance.

Is Your Pharmacy Being Audited by Cigna? Here’s What You Need to Know

If Cigna is auditing your pharmacy, what do you need to know? Here are some key tips from our defense lawyers and pharmacy consultants:

1. You Need to Take the Audit Seriously

Even though Cigna is not the DEA, you still need to take the audit very seriously. The penalties imposed following Cigna audits can be substantial, and for many pharmacies they can be devastating.

2. You Need to Execute a Proactive Defense

In order to mitigate your pharmacy’s risk during a Cigna audit, you need to execute a proactive defense. This means knowing what (if anything) Cigna’s auditors are likely to find and taking affirmative steps to achieve a favorable result.

3. You Need to Have Proof of Compliance

As discussed above, during a Cigna audit, having proof of compliance is just as important as compliance itself. If your pharmacy’s documentation is lacking, this is going to create problems during the audit process.

4. You Need to Fight to Avoid Retractions

If you do not present a strategic defense, Cigna’s auditors will find reasons to demand retractions. If you are going to avoid retractions, it is going to be because you have fought to do so.

5. You Need to Engage Experienced Defense Counsel

With all of the above considerations in mind, protecting your pharmacy during a Cigna audit requires experienced defense counsel. At Oberheiden P.C., we represent pharmacies nationwide, and we can begin working on your pharmacy’s audit defense immediately if necessary.

Speak with a Cigna Audit Defense Attorney at Oberheiden P.C.

Do you have questions or concerns about facing a Cigna audit? To speak with a pharmacy defense lawyer or compliance consultant at Oberheiden P.C. in confidence, call 888-680-1745 or request an appointment online now.

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