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Importance of Addressing Third-Party Audits Properly

Third-party audits have the potential to wreak havoc on independent pharmacies.An audit on its own can be extremely costly due to time dedicated to gathering necessary documents and assisting the auditor.  Further, any discrepancies found can be subject to adjustments of thousands of dollars. Suspected misconduct has recently led to referrals to law enforcement agencies; therefore, pharmacies must address third-party audits with the utmost attentiveness.

Although audits are likely inevitable, pharmacies should refrain from prompting unnecessary ones.  Pharmacies should consider which practices trigger audits and take care to eliminate them promptly.  CMS provides advice and tools to practice self-auditing to do so.

After receiving notice of an upcoming audit by a third-party, it is important to adequately prepare.  First, pharmacies must identify what type of audit is being conducted and what information will be necessary.  Nearly every third-party auditor lays out different rules and standards they adhere to during an audit, so it is vital to be informed.  Additionally, pharmacies must be prepared to discuss any relevant problems or issues that come up.  Lastly, all employees and staff must be well-versed in proper audit etiquette.

Following an audit, it is vital to reevaluate practices that led to the audit to avoid triggering another. Moreover, if a pharmacy has grounds to appeal any discrepancies from the audit, it must be aware of the state laws governing appeals.Appeals must be submitted in a timely fashion to avoid excessive fines.

Consequences of audits can impose huge financial burdens that may prove fatal to a pharmacy.  Further, consequences can include referrals to law enforcement agencies like the Medicare Fraud Control Unit, exclusion from practice, and criminal penalties.  It is of the utmost importance that independent pharmacies address third-party audits with paramount diligence and understand their rights under the law.

For guidance from expert legal counsel on third-party audits of your pharmacy do not hesitate to contact our knowledgeable and experienced attorneys at 212-668-0200 or by email at

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Sunday, June 26, 2022