MANAGED CARE

Florida R.Ph.s fuming over Medicaid audits

The Florida pharmacy community is simmering over a spate of Medicaid audits conducted for the Agency for Health Care Administration (AHCA) by Heritage Information Systems, Richmond, Va. (Latelines, Sept. 3).

The audits, which began in January 2000, have resulted in pharmacies being hit with requests for hefty recoupment payments. According to Kim Reed, an AHCA spokeswoman, the largest dollar value the agency is seeking from any one pharmacy is $4,717,525. At the conclusion of a three-month contract period, Heritage will have completed approximately 1,150 audits. Total recoupments to date are approximately $95,000, according to Reed.

Complaints from shell-shocked pharmacists who have been clobbered by huge chargebacks include the following: They are being fined for clerical errors and failure to keep written records, rather than for fraud; they are unfamiliar with the auditing procedures because there are no guidelines; recoupment fees are unfair because they are based on an extended period of time.

Some progress toward resolving R.Ph.s' concerns was made at a meeting in Tallahassee, Fla., on Aug. 27. Participants included AHCA, the Florida Pharmacy Association, pharmacists from all areas of the state, Heritage Information Systems, and representatives of Eckerd Corp.

According to AHCA's Reed, the participants proposed definitions of the terms hard copy and refill notations. In addition, the outline of an Audit Reference Guide was developed. AHCA also agreed to begin adding definitions to each of the major points on the outline and include references. AHCA and workshop participants agreed to a follow-up meeting within 90 days. After an audit, a pharmacy will be notified provisionally and given the opportunity to respond rather than being required to pay up or seek a hearing.

Commenting on the meeting, Michael Jackson, R.Ph., executive v.p. of the Florida Pharmacy Association (FPA), told Drug Topics, "I feel the meeting was very positive. The state, AHCA, and the community have a strong commitment to resolve the issue and look closely at the existing policy they are endorsing," he said. "The Medicaid program is trying to implement measures to cut down on fraud and abuse. They have implemented a number of very, very aggressive auditing tactics. If they find records that are inconsistent with state and federal regulations, they are initiating recoupment procedures; this includes extrapolating to the entire universe of Medicaid business and pharmacy. There's a lot of unrest here in Florida regarding the Medicaid audit. Pharmacists want answers right away. We're doing everything we can to fix the problem," he said.

Bob Wilson, Baptist Health Care outpatient pharmacy manager, attended the Aug 27 meeting and was optimistic. "We understand there is a need to audit pharmacy providers. We have a commitment to control fraud. There's a need for this to be done in a fashion that doesn't make an overburdened pharmacy system come crashing down around our ears. We're encouraged by what AHCA is doing to understand our problems and work with us to resolve them," he said.

Wilson said there was a tongue-in-cheek admission at one meeting that the audits are an attempt by the state to put money back into the budget. "We've been assured at subsequent meetings by AHCA staff that it's not the reason for the audits. It's to root out fraud ... and I completely support that," he said.

Scott Paramore, owner of Paramore Pharmacy, Marianna, Fla., was audited in December. Paramore told Drug Topics, "They came in using auditing standards that have not been written down or communicated to pharmacists. The agency's official position is that audit changes were necessary to detect fraud and abuse. The reason for the changes in the audit procedures is the fact that the Medicaid budget was cut. It's obscene."

According to Paramore, one of the 13 discrepancies found in his audit was a "human error" that involved recording a nurse practitioner's name, not the physician's name, on a control drug. The remaining 12 discrepancies concerned unauthorized refills, which Paramore attributed to a computer glitch. "They audited 250 Rxs out of 40,000 and found 13 discrepancies at $970. They took that and extrapolated it. Then I got a bill to repay $60,000."

David Enfinger, owner of A&E Pharmacy, Pensacola, said he was audited in February. He is optimistic that progress has been made in the way the agency is dealing with pharmacists. "They are changing some procedures and giving more ability for us to send documentation after the audit."

Sandra Levy

Sandra Levy. Florida R.Ph.s fuming over Medicaid audits.

Drug Topics

2001;18:49.