Caremark Invoice Audits – Purchases from Other Pharmacies

Caremark invoice audits continue to plague many pharmacies and often result in substantial audit findings and, occasionally, network termination.

Inventory acquired from other pharmacies frequently causes problems, whether purchased directly from another pharmacy or indirectly through an online marketplace such as RxeedTM or MatchRX.

Caremark has a very rigid policy for these pharmacy purchases and will only give credit for such purchases if the purchasing pharmacy has sufficient documentation.

Section 8.05 of the Caremark Provider Manual outlines the following requirements:

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For those Covered Items for which a Transaction Statement, Transaction History, and Transaction Information are not required by the DSCSA, Provider must maintain records of the exact quantities purchased, name of the Authorized Trading Partner, Covered Item name(s), NDC(s), date(s) of purchase, and proof of payment [e.g., copies of credit card receipts, canceled checks (front AND back)] (collectively “Documentation”). For those Covered Items received from other pharmacies, Provider must obtain and maintain the entire Transaction Statement, Transaction History, and Transaction Information from the selling entities.

For context, the Drug Supply Chain Security Act (DSCSA) allows such sales between pharmacies and requires that these transactions include the pedigree (aka Transaction Statement, Transaction History, and Transaction Information or “3Ts”) if they are for general stock replenishment. The DSCSA exempts transactions that are for a specific patient need and does not require the pedigree to be communicated, but Caremark seems unwavering.

PAAS National® has seen Caremark auditors request copies of the transferring pharmacy’s license and original invoices (and/or pedigree information) from the transferring pharmacy’s wholesaler. While PAAS strongly opposes Caremark’s policy and enforcement efforts, they hold an upper hand in an audit situation and consider the Provider Manual an extension of the contract.

RxeedTM recently filed a tortious interference lawsuit against Caremark in the District of NJ for their aggressive policies that is deterring pharmacies from using their platform. PAAS has also seen MatchRx contact selling pharmacies to obtain the wholesaler invoice based on an audit at the purchasing pharmacy (pursuant to the MatchRx User Agreement, section 2.5).

PAAS Tips:

  • Pharmacies should carefully weigh the pros and cons of purchasing inventory from other pharmacies (whether directly or indirectly)
  • If you choose to purchase inventory from another pharmacy, make sure you have full details of the transaction, including:
    • Pharmacy name, address, and NCPDP number transferring from
    • Drug name, quantity, lot number, expiration date, and NDC number
    • Date of transfer and date of receipt of drug
    • Reason for transfer to prove specific patient need exemption (e.g., complete Rx #1234)
    • Method or proof of payment (check # or credit card receipt)
    • Copy of transferring pharmacy license
    • Copy of invoices from transferring pharmacy to validate that they purchased from a licensed wholesaler
  • See previous Newsline article from December 2022 Pharmacy to Pharmacy Inventory Transfers – Buyer Beware! for additional discussion about pharmacy marketplace purchases

Eric Hartkopf, PharmD
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