Humana Pharmacy Audit Defense

If your pharmacy contracts with Humana to bill Medicare, Medicaid, or private insurance companies, it is at risk for being audited. Our Humana audit defense attorneys represent pharmacies in Humana audits on a nationwide basis.

Is your pharmacy being audited by Humana? Have you received notification that a Humana audit is imminent, and are you concerned about what Humana’s auditors might find? If so, you are not alone. Humana is one of the nation’s largest pharmacy benefit managers (PBMs), and it maintains a large-scale auditing operation to ensure that its contracted pharmacies maintain compliance with their contractual and statutory obligations.

While Humana is a private entity, it works with Medicare and Medicaid, and it operates similarly to the Centers for Medicare and Medicaid Services’ (CMS) fee-for-service auditors in many respects. It has broad authority to audit virtually all aspects of pharmacies’ operations, and it has the right to impose substantial penalties for pharmacies that it deems non-compliant. The audit process is fairly non-transparent, and pharmacies often receive little (if any) warning before Humana imposes penalties including retractions, offsets, denials, and contract termination.

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)

Humana Audit Defense Lawyers and Consultants for Humana Audits

At Oberheiden P.C., we maintain a nationwide practice focused on healthcare fraud matters. This includes the representation of pharmacies with respect to all aspects of compliance and humana audit defense. If your pharmacy is facing a Humana audit, you need to get prepared, and you need to make sure you are relying on the advice of experienced professionals.

Our pharmacy defense lawyers have centuries of combined experience, including experience prosecuting fraud cases at the U.S. Department of Justice (DOJ). Our pharmacy compliance consultants are former high-ranking agents with the U.S. Drug Enforcement Administration (DEA) and other federal agencies. In short, we know pharmacy compliance inside and out, and we can use our vast experience to deal with Humana’s auditors effectively and protect your pharmacy to the fullest extent possible.

9 Specific “Audit Objectives” Identified by Humana

Under the terms of Humana’s PBM contract, “Humana, any third-party auditor designated by Humana or any government agency allowed by law is permitted to conduct audits of any and all pharmacy books, records and prescription files related to services rendered to members.” With respect to pharmacy audits, Humana has identified nine specific “audit objectives,” which make up a non-exclusive list of the types of issues that can lead to retractions and other penalties. These audit objectives are:

  • Dispensing Unauthorized, Early, or Excessive Refills – Prior to dispensing refills, pharmacies must ensure that the requested refills have been approved by patients’ physicians, and they must also take the necessary steps to adequately confirm medical necessity. Dispensing unauthorized refills, dispensing refills before patients’ previously-dispensed medications should have been fully used, and dispensing refills that Humana classifies as excessive are all issues that can lead to penalties in a Humana audit.
  • Dispensing Incorrect Medications – Dispensing the wrong medication to a patient is a serious issue, and it is one that can lead to trouble on multiple fronts for pharmacists and pharmacy owners. This includes issues with Humana. If Humana’s audit reveals that your pharmacy has dispensed incorrect medications, or if Humana’s auditors cannot confirm that your pharmacy has dispensed correct medications, the risks can be significant.
  • Billing the Wrong Payor – Billing errors are among the most-common causes of retractions during Humana and other PBM audits, and this includes billing the wrong payor. If your pharmacy billed the wrong private insurer or billed a private insurer instead of Medicare or Medicaid (or vice versa), this is a mistake that can have significant consequences as well.
  • Billing the Wrong Physician – Likewise, billing the wrong physician for prescription medications is a mistake that is highly likely to be flagged in a Humana audit. Other mistakes pertaining to payments and financial relationships with physicians (i.e. payment or acceptance of unlawful referral fees) can also trigger audit penalties and potentially lead to a federal pharmacy fraud investigation.
  • Using the Wrong National Council for Prescription Drug Programs (NCPDP) or National Provider Identifier (NPI) Number – Improperly using NCPDP and NPI numbers is another issue that is high on Humana’s radar. Humana’s auditors will be thoroughly inspecting your pharmacy’s records pertaining to the use of NCPDP and NPI numbers, and any discrepancies are going to present problems for your pharmacy.
  • Incorrectly Calculating Day Supplies of Prescription Drugs – Just as dispensing the wrong medication can have serious consequences, so can dispensing the wrong amount of a prescribed drug. Incorrectly calculating day supplies is an easy mistake to make, but it is not one that is taken lightly. In order to demonstrate compliance, your pharmacy must have clear and comprehensive records that align the number of dosages dispensed with the numbers prescribed in patients’ scripts.
  • Incorrectly Using Dispense-As-Written (DAW) Codes – Dispense-as-written codes provide specific instructions to pharmacists with regard to individual patients’ prescriptions. Certain DAW codes can affect pricing; and, as a result, Humana’s auditors examine all uses of these codes very carefully.
  • Overbilling Prescribed Quantities of Drugs – Overbilling quantities is one of several billing errors that will be examined in virtually any Humana pharmacy audit. Even when unintentional, and even when made by third-party billing administrators, billing errors can present substantial liability risks for pharmacies of all sizes.
  • Recordkeeping Deficiencies Regarding Prescriptions and Drug Orders – Failing to generate and store all required documentation is another issue that presents trouble for many pharmacies. Pharmacies’ documentation obligations are immense, and failing to generate and store adequate records regarding prescriptions or drug orders in particular is considered a major red flag for Humana auditors.

Additional Compliance Risks for Pharmacies During Humana Audits

In addition to these issues, there are various other issues that can create problems for pharmacies during Humana audits as well. For example, other common compliance deficiencies identified during Humana and other PBM audits include:

  • Failing to Validate Providers Prior to Filling Prescriptions – Medicare, Medicaid, and private payors generally only provide coverage for prescriptions issued by providers who are not on the U.S. Department of Health and Human Services Office of Inspector General’s (DHHS OIG) list of excluded providers. If your pharmacy does not have the requisite policies and procedures in place to validate providers prior to filling prescription, then it could be at risk during a Humana audit.
  • Purchasing Illegitimate Prescription Drugs – Purchasing drugs from illegitimate sources in violation of the Drug Supply Chain Security Act (DSCSA) and/or the Controlled Substances Act (CSA) can expose pharmacies to penalties in Humana audits and federal law enforcement proceedings. If your pharmacy has purchased drugs from illegitimate sources, or if you do not have documentation of the legitimate source of all drugs dispensed and in your pharmacy’s current inventory, you will need to be prepared to address these issues head-on.
  • Mail Order and Telemedicine Violations – Dispensing prescription drugs via mail order and dispensing medications pursuant to telemedicine prescriptions present particular compliance burdens for pharmacies. Here, too, non-compliance can lead to substantial exposure.
  • Compound and Specialty Pharmacy NonComplianceCompounding pharmacies and specialty pharmacies have unique compliance burdens as well. Due to the high risk of non-compliance, these pharmacies are frequent audit targets, and they must be thoroughly prepared to demonstrate compliance to Humana.
  • Deductible Waivers – Issuing deductible waivers is a practice that can get all types of pharmacies into trouble with Humana and its payors. If your pharmacy has placed shifted costs from patients to payors, this could lead to retractions and other penalties.
  • Other Billing and Coding Violations – In addition to issues involving NCPDP, NPI, and DAW codes, errors involving National Drug Codes (NDCs) and other types of billing and coding violations are also commonly-identified issues in Humana audits. As a result, pharmacies must be prepared to demonstrate full compliance with all applicable billing rules and regulations.
  • Other Recordkeeping Deficiencies – For pharmacies, one of the keys to avoiding unnecessary liability as the result of a Humana audit is to be prepared to present a strategic defense supported by thorough documentation of compliance. Lack of documentation will generally be viewed as evidence of non-compliance, and pharmacies that are not prepared to substantiate their billings and affirm the legality of their dispensing practices with comprehensive documentation will be at risk for significant liability.

If your pharmacy is facing a Humana audit, engaging defense counsel promptly is a crucial first step toward risk mitigation. Our pharmacy defense lawyers and compliance consultants are available, and we can take defensive action immediately if necessary. Headquartered in Dallas, Texas, we represent pharmacies nationwide, and we have a proven record of success defending pharmacies and other healthcare clients in all types of audits and investigations. To learn more, schedule a free and confidential case assessment today.

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

If you would like to schedule a free and confidential case assessment with a pharmacy defense lawyer or compliance consultant at Oberheiden P.C., please call 888-680-1745 or contact us online. If your pharmacy is being audited by Humana, you do not have time to waste. At Oberheiden P.C., we are available 24/7, and we have the experience and insights you need to avoid unnecessary penalties.

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