from ACA Corporate Member, Frier Levitt, Attorneys at Law

Beginning early this year, at the request of the Defense Health Agency (“DHA”), Express Scripts, Inc. (“ESI”) sent the first wave of letters to some of the pharmacies within its network recouping on claims that had been submitted to TRICARE during the 2015 year. These letters are particularly notable, as they focus on the results of a DHA investigation – as distinct from an audit – a particularly powerful tool that permits ESI an enlargement of the limited lookback period on claims permitted in audits. In the vast majority of instances, the discrepant claims ESI has identified relate to claims submitted for compounded drugs. Though ESI’s letters reference a host of potential reasons for the recoupments, ESI’s chief concern appears to be based in allegations that medications were dispensed to patients in instances in which the requisite prescriber patient relationship did not exist.

What constitutes a valid prescriber patient relationship often varies from state to state and is very heavily dependent on the fact. Several factors can be viewed as “red flags” when assessing whether an prescriber patient relationship exists, including the location of the patient relevant to his or her prescriber, telemedicine arrangements, certain marketing arrangements, or that the prescriber did not submit claims for a patient visit on or around the time the prescription was written.

Between late May and early June, ESI sent out another wave of letters – which were dated April 7, 2020, but were not received until several weeks thereafter – initiating recoupment actions to pharmacies based on allegations of lack of prescriber patient relationship. As with the first wave of ESI letters, the letters received by pharmacies in late May and early June related to claims submitted to Tricare during the 2015 year and generally identified claims for recoupment related to compounded medications. Each of these letters broadly alleged that prescriptions had been dispensed absent a valid prescriber patient relationship; these letters provided no additional information as to the basis for these allegations, or what methodology had been employed to derive those findings.

In instances where pharmacies have formally requested administrative review, ESI has responded with another form letter, providing somewhat confusing and vague statements about what documents would be required in order to validate the prescriber patient relationship. While ESI’s response letters explicitly requested “detailed substantiation that a prescriber patient relationship existed within the 365-day period prior to the date the claim(s) were filled,” the undertones of the letters suggested that mere attestations from prescribers would not be enough to validate the prescriber patient relationship. ESI also requested that if the pharmacies were to provide medical records to demonstrate the existence of a prescriber patient relationship, they would need to additionally provide metadata or similar validating facts that substantiate the records’ creation date. In addition to this metadata request, ESI stated in the form letters that it is requiring an affidavit from prescribers and the pharmacy attesting that they understand that they are subject to criminal prosecution under federal and State law for providing false statements and medical records, a tactic we believe to be particularly abusive given the incentive it provides for prescribers – the individuals in possession of the relevant documentation – to refrain from providing any statements or information to pharmacies in need of assistance.

ESI’s most recent blast correspondence, dated June 25, 2020, states that, under the direction of DHA, ESI has suspended all further recoupment actions which were based on the lack of a prescriber patient relationship as initiated in the letters dated April 7, 2020 (but, as outlined in the letter, were intended to be dated June 1, 2020) until further notice. Via additional correspondence with our office, ESI clarified that, due to DHA’s direction to ESI to suspend the recoupment action, the 90-day time period by which to appeal the recoupment action is being stayed as of June 23, 2020 until further notice. This most recent correspondence from ESI additionally states that ESI will be “unable to answer any questions regarding this matter until DHA provides further information which will be coming in the next few weeks.”

While these new suspension letters may provide some relief to pharmacies, they leave a lot of uncertainty as to when and if the recoupment actions and the offsets will resume. Specifically, we view the statements contained within the June 25th letter, when considered in conjunction with ESI’s past actions, as a “slow down” of ESI’s recoupment efforts, tied primarily to procedural defects, rather than an abandonment or withdrawal of those efforts.

Pharmacies who have received initial recoupment letters should be on the lookout for the referenced June 25, 2020 suspension letter and should utilize this period of “stay” of the recoupment action to continue to vigilantly prepare appeals and gather the relevant documentation to combat ESI’s allegations. Moreover, ESI has, in some instances, already begun its offset for pharmacies who continue to submit claims to ESI. In many instances, this offset began before the applicable pharmacies had received ESI’s original letter initiating recoupment. We urge pharmacies to continue to monitor their remittances to determine whether the recoupment process has actually been suspended.

While these letters dated April 7, 2020 are recoupment actions, if ESI makes a determination that a prescriber patient relationship is lacking, ESI may also proceed to terminate the pharmacy from its network, which may have implications for future credentialing with pharmacy benefit managers other than ESI. Moreover, because ESI’s investigation pertains to claims submitted to TRICARE, a federal payor, pharmacies must also be mindful of the potential for False Claims Act exposure. As a result, it is of utmost important that these findings are appealed in a timely manner.