Rejected Claims Review: Just As Important As Ever In 2019

Are you confident in your current process to review and identify non-compliant rejected claims?

Rejected claim analysis is a year-round activity with special emphasis that should begin before January.

As a Plan Sponsor, whether you delegate all or part of your Part D Drug Benefit set-up to your Pharmacy Benefit Manager (PBM), The Centers for Medicare & Medicaid Services (CMS) expects plans to demonstrate effective management of the CMS-approved formulary to ensure timely beneficiary access to clinically appropriate medications.

CMS expects Sponsors to understand regulatory requirements and to oversee the PBM to ensure the PBM is compliant with claim adjudication. Beneficiaries should be able to receive the Part D drugs they are entitled to, consistent with CMS guidance, from January 1st through December 31st of the plan year.

To accomplish this, it is essential to perform comprehensive testing of the formulary file and system edits prior to going “live” in the adjudication system. In addition, it is required to perform a regular review of rejected point of sale (POS) pharmacy claims as well as to perform regular oversight of other delegated PBM functions.

You can reduce your compliance risk of transition non-compliance by testing transition fill look-back logic, which must accurately identify transition eligible beneficiaries and drugs eligible for transition fills; maintaining formulary consistency for beneficiaries across years and during the year; ensuring formulary edits are effectively tested for accuracy prior to implementation; and by ensuring that the PBM does not administer the Part D benefit based on either Medicaid or commercial program requirements.

In a Formulary Administration Audit and/or Coverage Determination Audit, CMS seeks to determine how the Sponsor properly administers the CMS transition policy and its approved formulary by avoiding unapproved utilization management practices, prior authorizations, quantity limits, rejecting formulary medications as non-formulary, and maintaining beneficiary access to protected class drugs during transition and throughout the year. Failure to properly use approved formularies creates high audit risk, a possible civil monetary penalty, or even plan sanction.

Performing a comprehensive review of the formulary and utilization management system  edits prior to going “live” in the adjudication system requires a robust, systematic process for comparing the CMS approved formulary benefit to a comprehensive claims universe in order to ensure that all covered drugs, tiering, and utilization management edits are consistently and accurately adjudicated.

Our Pharmacy experts can create and conduct an in-depth benefit administration test plan for your organization to validate that everything is working precisely as it should before the new plan year begins and on an ongoing basis throughout the year. We can ensure your PBM is processing claims consistent with your CMS-approved Prescription Drug Benefit.

We can help your MAPD or PDP develop and implement efficient and compliant internal operations and prepare effectively for CMS audits with professional services and unmatched compliance tools.


Wayne Miller
Wayne Miller

Wayne Miller is Senior Director of Pharmacy Solutions at Gorman Health Group (GHG). In this role, he is responsible for supporting the Senior Vice President of Pharmacy Solutions in the oversight and development of projects and services in Medicare Part D, Medicaid, and industry relations. In addition, he manages a variety of client projects in compliance, Centers for Medicare & Medicaid Services (CMS) audit support and remediation, Pharmacy Benefit Manager (PBM) audits and Requests for Information (RFIs). Wayne brings GHG clients 28 years of experience in the health care industry, with broad Medicare and Medicaid pharmacy operations leadership experience in multiple practice settings.

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