ESI Audits - Federal Lawyer

ESI Audits

Is ESI auditing your pharmacy? If so, you must respond effectively in order to mitigate your risk of facing recoupments and other penalties. Our lawyers and pharmacy compliance consultants represent pharmacies in ESI audits nationwide.

Express Scripts, Inc. (ESI) vigorously enforces pharmacies’ federal compliance obligations. If ESI accuses your pharmacy of non-compliance in any facet of its operations, the consequences can be severe—up to and including loss of eligibility and referral for a federal civil or criminal investigation. As a result, when facing an ESI audit, a prompt and effective response is required, and this starts with engaging a pharmacy compliance and defense law firm with attorneys and consultants who have specific experience dealing with ESI.

At Oberheiden P.C., we provide representation for ESI audits nationwide. Our lawyers and pharmacy compliance consultants have centuries of combined experience, including prior experience with the U.S. Drug Enforcement Administration (DEA), U.S. Department of Health and Human Services (DHHS), U.S. Department of Defense (DOD), and other federal agencies. We are intimately familiar with all aspects of pharmacies’ compliance obligations under Medicare, Medicaid, Tricare, and ESI’s pharmacy benefit manager (PBM) contracts, and we have a proven track record of helping pharmacies, pharmacy owners, and pharmacists-in-charge avoid serious penalties.

What Is At Risk During an ESI Audit?

As with all types of pharmacy audits and investigations, the potential consequences of an ESI audit depend on a variety of different factors. These factors include everything from the sufficiency of your pharmacy’s compliance efforts to the specific ESI personnel who are examining your pharmacy’s books and records. In all cases, mitigating your pharmacy’s risk requires a proactive, comprehensive, and detail-oriented approach, and it requires the ability to effectively challenge unauthorized practices, faulty assumptions, and flawed methodologies during the audit process.

If you do not take the necessary steps to protect your pharmacy during an ESI audit, what are the potential consequences? Depending on the circumstances involved, an ESI audit can potentially lead to:

  • Recoupments – Instituting recoupments is among ESI’s most-common and most-effective enforcement tactics. If your pharmacy is accused of overbilling as the result of an audit, ESI can immediately take recoupment action in order to recover your pharmacy’s alleged “fraudulent” billings.
  • Denial of Pending Claims – In addition to recouping payments for previously-billed claims, ESI can deny pending claims as well. If your pharmacy has a substantial volume of claims pending, this could present a significant risk to its cash flow and its viability as a going concern.
  • PrePayment Review – Not only can ESI focus on amounts billed during the period that is the subject of its audit, but it can focus on future billings as well. If ESI implements pre-payment review for your pharmacy based upon allegations of billing fraud, not only can this lead to more claims being denied, but it can also delay payment on future claims by six months or longer.
  • Termination of PBM Contract – If an ESI audit reveals significant evidence of billing fraud (as judged by ESI’s auditors), this can lead to termination of the subject pharmacy’s PBM contract. This, obviously, is an extremely serious matter that can have severe financial consequences.
  • Referral for Federal Investigation – If ESI’s auditors find evidence of large-scale billing fraud or other pharmacy compliance failures, then ESI may refer the subject pharmacy to the DEA or another federal agency for investigation. In addition to utilizing any information obtained by ESI during its audit, federal agencies such as the DEA can collect evidence through various other means as well. If these efforts uncover evidence of civil or criminal statutory violations, then this could lead to federal prosecution for pharmacy fraud.

Given the substantial risks involved with facing an ESI audit, if your pharmacy is being audited, you do not have time to waste. You need to engage experienced defense counsel promptly, and you will need to be prepared to work closely with your pharmacy’s defense counsel in order to do what is necessary to survive its ESI audit.

What Does It Take to Survive an ESI Audit?

What does it take to survive? In an ideal world, the answer would be, “Not much.” Your pharmacy would be able to provide access to its books and records (to the extent that they fall within the scope of the audit), and ESI’s auditors would reach a reasoned determination. Assuming your pharmacy’s compliance program was adequate, this would be a determination of no liability, and your pharmacy would be able to resume its normal operations.

Unfortunately, in the real world, this ideal scenario does not exist. As we mentioned above, ESI is vigorous in its enforcement efforts, and its auditors are trained to identify any and all possible grounds for imposing recoupments and other penalties—even based on technical miscues that have no bearing on the dollar amount of your pharmacy’s billings. As a result, facing an ESI audit is always a high-risk proposition, and it needs to be handled accordingly.

When we defend pharmacies during ESI audits, we do so by all means available. We take a proactive approach, and we remain engaged throughout the process to ensure that our clients are not unduly penalized. As defense counsel for ESI audits, our services include:

  • Engaging with ESI’s Auditors – Our attorneys and pharmacy compliance consultants with engage with ESI’s auditors on your behalf, and we will make contact with ESI as soon as possible to ensure that all communications are conducted with our attorneys and consultants—not your pharmacy’s staff.
  • Challenging Flawed Assumptions, Methodologies, and Audit Practices – Throughout the audit process, we will meticulously scrutinize the efforts of ESI’s auditors, and we will ensure that the scope of the audit is appropriately limited. We will also challenge flawed assumptions and methodologies to ensure that the audit does not improperly result in an unfavorable determination.
  • Ensuring Application of Current Billing Rules and Regulations – In many cases, pharmacies are penalized for failing to follow rules and regulations that are no longer current. With our attorneys’ and pharmacy compliance consultants’ in-depth knowledge of the federal requirements and ESI’s PBM contract terms, we can ensure that the correct rules and regulations are applied.
  • Proactively Addressing Any Compliance Failures – If your pharmacy is not fully in compliance, we can assess the potential implications of any compliance failures, and we can address these concerns proactively during your pharmacy’s ESI audit. By taking a proactive approach rather than allowing ESI auditors to independently uncover billing errors, it will often be possible to significantly reduce the penalties that are imposed.
  • Preparing for Subsequent Legal Action – From appealing the outcome of your pharmacy’s ESI audit to defending against a DEA or other federal law enforcement agency investigation, we can advise and represent your pharmacy with regard to any subsequent legal action as well. Hopefully this won’t be necessary; but, if it is, you will need to prepare accordingly.

FAQs: How to Avoid Penalties (and Other Consequences) During an ESI Audit

Q: ESI is auditing my pharmacy. What should I do?

 

If ESI is auditing your pharmacy, you need to focus your efforts on ensuring that the audit does not lead to unnecessary negative effects. ESI has broad authority to impose substantial penalties; and, if you are not careful, your pharmacy’s audit could lead to drastic consequences.

Q: Do I need to engage defense counsel for an ESI audit?

 

Yes, when facing an ESI audit, it is imperative to engage experienced defense counsel. You will want to choose a law firm with attorneys and consultants who have extensive experience in all matters pertaining to pharmacy compliance, PBM audits, and federal pharmacy fraud defense.

Q: What are ESI’s auditors looking for?

 

During your pharmacy’s audit, ESI’s auditors will be looking for any and all evidence of billing violations. In addition to material billing violations (i.e. upcoding or double-billing), this also includes technical violations such as failing to insert necessary dates or signatures. Under ESI’s PBM contract and the federal pharmacy billing guidelines, even minor technical deficiencies such as these can justify recoupments and other penalties.

Q: What should I do if my pharmacy is not fully compliant?

 

If you are aware that your pharmacy is not fully compliant, it will be especially important for you to consult with defense counsel as soon as possible. Your pharmacy’s audit defense strategy will need to take this into account, and you will need to make an informed decision about how and when to address all known compliance failures.

Q: What are my options if ESI imposes recoupments or other penalties following an audit?

 

If ESI imposes recoupments or other penalties following an audit and you disagree with the company’s determinations, you can file an appeal. However, this is not a simple or straightforward process; and, here, too, it is imperative to rely on the advice of experienced pharmacy defense counsel.


Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden

Founder

Attorney-at-Law

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)

Gamal Abdel-Hafiz
Gamal Abdel-Hafiz

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)

Schedule a Free ESI Audit Assessment with a Pharmacy Defense Lawyer or Compliance Consultant at Oberheiden P.C.

Is ESI auditing your pharmacy? If so, we encourage you to contact us promptly for a confidential and complimentary assessment. To speak with a senior pharmacy defense lawyer or compliance consultant at Oberheiden P.C., call 888-680-1745 or request an appointment online now.

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