Copay Claims Audits

A Case Study

A major pharma manufacturer contacted us to evaluate whether the cap on their copay program was optimal given their objectives and patient base. After receiving a claims file and utilizing our copay program optimization model to evaluate different patient offer scenarios, it was determined there was a very high likelihood of processing & pharmacy fraud issues within their current copay program that should be addressed.

We recommended doing a copay claims audit across all brands corporate wide to further investigate processing and pharmacy fraud issues. Once the issues were identified, the client would be able to recover some of the monies lost and take appropriate corrective action to eliminate issues going forward.
The audit reviewed every copay claim (paid and reversed) and included :
- Running claims through our proprietary modeling engine
- Identifying/Marking Suspicious Claims (fraud score calculated for each)
- Conducting benefit investigation at the pharmacy level
- Reviewing shipments to pharmacies (867 data) & rates paid

The results of the claims audit were eye opening:
- Hundreds of incorrectly processed/fraudulent claims were found:
  - Claims with Inflated WAC/Retail Prices
  - Rampant use of cash discount cards where cash patients were processed in the program as commercial patients (pharmacy double dipping)
  - Numerous examples of program business rules not being followed, resulting in higher payouts on claims
  - 5 pharmacies were identified as submitting claims with no record of product purchases (comparison of copay claims vs. 867 data)
We identified that the client had overpaid pharmacies by $2.1MM the previous year. Corrective action was taken immediately and max-rates were changed.
Identified errors & fraud totaled: $12MM (19.2% of program cost on $65MM in spending)
Alpha 1C made many recommendations on what could be done to recover some of the fraud and stop it from happing in the future
ROI results on the audit itself were 24.8 to 1