NGS Medicare Audit

Experienced NGS Medicare Audit Lawyers Work Closely with Pharmacies Through the PBM Audit Process

**Attorney Lynette Byrd**
NGS Medicare Audit Team Lead
Contact Lynette

envelope icon — **Attorney Lynette Byrd**
NGS Medicare Audit Team Lead
Contact Lynette

**Deborah Zarifian**
NGS Medicare Audit Team Consultant
Former FBI Special Agent
Registered Pharmacist (CT)

National Government Services, Inc. (NGS) is a pharmacy benefit manager that administers Medicare benefits on behalf of the Centers for Medicare and Medicaid. While the company is affiliated with the federal government, it is not a government entity. However, under operation of contract, NGS regularly audits participating pharmacies to ensure ongoing regulatory and billing compliance. Unlike many other pharmacy benefit managers (PBMs), NGS works exclusively with the federally-funded Medicare program, resulting in increased compliance obligations and risks for pharmacies during the audit process.

If NGS is your PBM and the company recently announced an audit of your pharmacy, it is imperative that you reach out to an experienced NGS PBM audit attorney for assistance. The PBM audit process is complex, and while pharmacies have rights, you cannot rely on NGS auditors to inform you of them. Additionally, as a PBM, NGS operates with little state or federal oversight, making it challenging for management teams who are unfamiliar with the process to effectively navigate an audit.

At Oberheiden, P.C., our NGS audit defense attorneys have remarkable experience assisting pharmacies through PBM audits. Several of our senior attorneys were formerly employed in high-ranking positions with the federal government, including in the Drug Enforcement Administration (DEA) and the Health and Human Services Office of Inspector General (HHS-OIG). From the moment you bring Oberheiden, P.C. onto your audit defense team, we will get to work identifying all risk areas and developing a coordinated and comprehensive defense strategy.

What Is the Role of NGS?

As a pharmacy benefit manager, NGS serves as a Medicare coordinator, overseeing prescription drug plans for more than 27 million Americans. NGS operates in 20 states and five United States territories, including:

Alaska,
American Samoa,
Arizona,
California,
Connecticut,
Guam,
Hawaii,
Idaho,
Illinois,
Maine,
Massachusetts,
Michigan,
Minnesota,
Nevada,
New Hampshire,
New Jersey,
New York,
New York,
Northern Mariana Islands,
Oregon,
Puerto Rico and
Rhode Island,
U.S. Virgin Islands
Vermont,
Washington, and
Wisconsin.

NGS contracts with the federal government to oversee the administration of Medicare Part A and Medicare Part B benefits. NGS is one of the larger PBMs, processing more than 228 million Medicare claims in 2020, totaling over $103 billion in benefits.

In its roles as a Medicare-benefits administrator, NGS interacts directly with pharmacies, acting as the intermediary between the pharmacy and Medicare. When a pharmacy fills a prescription, it seeks payment from NGS. In most cases, NGS submits timely payment. However, if NGS has any reason to believe that a pharmacy is not in compliance, it can initiate a PBM audit. PBM audits are invasive and, if auditors discover any areas of non-compliance, NGS may withhold funds from the pharmacy or even terminate the pharmacy’s contract.

It is important to remember that NGS is a third-party company that exists to make a profit. Thus, some claim that NGS and other PBMs seek out any reason to justify their existence by conducting invasive audits that start off as nothing more than a fishing expedition. However, once auditors get their foot in the door, they will often identify some violation, however minor, that justifies further investigation. At Oberheiden, P.C., our PBM audit attorneys are prepared to immediately intervene in the audit process, ensuring that auditors operate within the bounds of the PBM contract you signed with NGS. This ensures audits are limited in scope, which decreases the likelihood of adverse findings that would further disrupt your business.

What Are NGS Auditors Looking for When Conducting a PBM Audit?

Federal law does little to regulate PBMs. And while some states have laws imposing some level of regulation, the overall regulatory landscape is incredibly weak when it comes to PBMs. This lack of oversight makes it challenging to know exactly what NGS looks for when selecting pharmacies to audit. However, based on previous audits, the following are some of the most common issues NGS Medicare auditors are looking for when auditing a pharmacy:

Accepting prescriptions written by excluded providers
Billing for unapproved drugs
Compound drug issues
Failure to create or maintain records
Falsification of records
Filling illegitimate prescriptions
Intentional and unintentional billing and coding errors
Invoice shortages
Licensing violations
PBM contract fraud
Telemedicine violations

Under the terms of the PBM contract a pharmacy signs with NGS, auditors are entitled to request certain documentation related to filled prescriptions. While it is essential that pharmacies create and retain records, often, an NGS auditor’s request for documentation exceeds their contractual authority. This puts pharmacies in the unenviable position of either consenting to the request—which will prolong the investigation—or challenging it—which puts the pharmacy at risk of being found in violation of the contract.

At Oberheiden, P.C., our NGS Medicare audit lawyers work closely with pharmacies undergoing a PBM audit to ensure that their rights are protected in the process.

How Oberheiden, P.C. Can Help Pharmacies Subject to an NGS Medicare Audit

Given the lack of transparency surrounding the NGS audit process, pharmacies are often left wondering what rights they have and how to enforce them. Auditors present requests for documentation as though pharmacies are legally compelled to comply, although that is not always the case. And, in the event NGS identifies an alleged violation, NGS can unilaterally act to impose harsh sanctions. Pharmacies have no opportunity for administrative review of a PBM decision, and thus, are left to either negotiate with NGS or pursue legal action in the courts.

At Oberheiden, P.C., we offer a third option. Our pharmacy defense lawyers do the following to ensure a smooth audit:

Conduct a Pre-Audit Evaluation

Preparation is key when it comes to a successful NGS audit. Thus, the first thing we do when you bring us onto your team is to conduct a thorough pre-audit evaluation. During this evaluation, we will review all records that NGS auditors will ask for, identifying any areas of potential risk. This will give us a better idea of what—if anything—auditors may find so we can develop an effective defense strategy before the audit even begins. Additionally, we will reach out to NGS, informing the company that you are represented by a pharmacy defense lawyer. This alone will often impact the nature and scope of the audit.

On-Site Counsel and Support

When you retain the services of our NGS Medicare audit attorneys, we will send a team to your pharmacy to provide you with feet-on-the-ground assistance throughout the process. When NGS auditors make a demand for documentation, you may not know whether you need to honor the demand. We will assess the situation and, if applicable, explain to auditors why the request falls outside the scope of the reviewable documents. We will also ensure that auditors follow the appropriate methodology and do not make any incorrect assumptions that may lead to a prolonged investigation or adverse findings.

Post-Audit Representation

The goal of a PBM audit is to wrap it up as quickly as possible without any adverse findings. However, auditors routinely identify potential violations. Depending on the nature of the violation, it may result in a recoupment or contract termination. While NGS regularly makes these unilateral determinations, they are limited in their ability to do so under the terms of the PBM contract. However, to enforce the contract, a pharmacy must take NGS to court. Oberheiden, P.C., lawyers will represent you in negotiations with NGS to resolve any possible sanctions without the need for judicial intervention. However, as experienced litigators, we are also prepared to pursue legal action, such as an injunction, whenever doing so is necessary to protect and enforce your rights.

Compliance Assistance

Ensuring you are in compliance is the single best way to avoid an audit as well as any potentially adverse findings. At Oberheiden, P.C., our pharmacy defense lawyers also work with independent pharmacies, reviewing their procedures to help identify any areas of compliance risk. We then assist in developing modified procedures to bring your pharmacy into compliance.

Dr. Nick Oberheiden

Founder

Attorney-at-Law

Lynette S. Byrd

Former DOJ Trial Attorney

Partner

Brian J. Kuester

Former U.S. Attorney

Hon. Kevin McCarthy

55th Speaker, U.S. House of Representatives (ret.)

Government Consultant

Mike Pompeo

Of Counsel

Former U.S. Secretary of State

John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara

Federal Appeals Attorney

Nicholas B. Johnson

Former Prosecutor

Roger Bach

Former Special Agent (DOJ)

Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen

Former Supervisory Special Agent (FBI)

Frequently Asked Questions:

Why don’t we call ourselves the best PBM audit attorneys?

Lawyers are subject to strict ethical rules when it comes to attorney advertising. One of these rules prohibits a lawyer from making any statement that may be misleading. Use of the word “best” is subjective; for example, pharmacies cannot verify a lawyer’s claim that they are the best PBM audit lawyer. For this reason, the Model Rules of Professional Conduct, which are released by the American Bar Association, generally prohibit an attorney from claiming that they are the “best” lawyer in any given practice area.

What are a pharmacies’ rights related to an NGS Medicare audit?

NGS Medicare administers government-funded health benefits programs and, based on their actions; it may appear as though auditors are federal employees. However, NGS is a for-profit pharmacy benefit manager and is not part of the federal government. Thus, a pharmacy’s relationship with NGS—and its rights during an audit–are contractually defined. While a pharmacy’s rights during the PBM process depend on state law, in general, pharmacies have the following rights during a PBM audit:

Reasonable notice of the audit;
A limited and clearly defined look-back period;
Reimbursement for claims that were improperly denied;
Timely notice of the results of the audit; and
Clear and documented explanations of any demand for recoupment.

To learn more about your rights when undergoing an NGS Medicare audit, reach out to the PBM audit attorneys at Oberheiden, P.C.

Do I need a lawyer if my pharmacy is subject to an NGS Medicare audit?

Legally speaking, no, there is no requirement that you retain the assistance of a pharmacy audit defense lawyer when undergoing a PBM audit. However, given the stakes involved as well as the complexity of the process, the assistance of an attorney can not only make the process much less burdensome on your business but also increase the likelihood of a quick and favorable audit. When NGS auditors know that an experienced PBM audit lawyer will be looking over their shoulder throughout the process, they may be hesitant to go on unwarranted fishing expeditions. Additionally, in the event an auditor makes an unreasonable demand of you, an attorney can cite factual and legal reasons why the request exceeds auditors’ authority. To learn more about how the NGS Medicare pharmacy audit lawyers at Oberheiden, P.C. can help you navigate the audit process, give us a call today.

Contact the NGS Medicare PBM Audit Lawyers at Oberheiden, P.C. Today

If NGS Medicare recently announced an audit of your pharmacy, the skilled pharmacy audit defense lawyers at Oberheiden, P.C. are immediately available to help you through the process. We have senior attorneys standing by, ready to discuss your situation and offer reasoned advice. If you decide to bring us onto your pharmacy audit team, our team will immediately begin developing a strategic plan to effectively and efficiently resolve the audit as quickly as possible. You can reach the firm by calling 888-680-1745 to schedule an appointment. You can also complete our online contact form, and one of our lawyers will reach out to you shortly.