Financial and Pricing Audits

Financial Guarantee Audit

A Financial Guarantee Audit independently validates whether your PBM has met the pricing and minimum rebate guarantees specified in your contract.

As PBMs shift toward cost-plus, acquisition cost, modifying rebate guarantees more frequently, and other alternative pricing models, these pricing structures become more complex and harder to track. Auditing these guarantees has the potential to deliver a significant return on investment to the plan sponsor. Auditing ensures that all contractual terms are being followed, protecting payers from hidden costs or non-compliance. This audit also verifies the PBM is properly classifying drugs (both included and excluded), correctly applying pricing and rebate logic, and passing through rebates as contractually required.

Common Triggers for Conducting This Audit:

• When a PBM provides its annual financial guarantee and minimum rebate guarantee reconciliation report(s)
• Spikes in drug spend, or rebate shortfalls
• When a new agreement or amendment goes into place
• Transition to alternative or cost-plus pricing models with more complex fee structures
• Known operational or claim adjudication issues tied to misaligned contractual definitions and obligations

Performance Guarantee Audit

A Performance Guarantee Audit evaluates whether your PBM has delivered on the operational and service-level commitments outlined in your contract.

This audit independently measures performance against those standards and quantifies any financial penalties owed for underperformance, dollars many plans leave on the table. It gives payers the visibility to assess where operational processes may be falling short and hold vendors accountable.

Common Triggers for Conducting This Audit:

• PBM providing attestations without detailed reporting by performance guarantee
• Switching PBMs or onboarding a new vendor partner
• Patterns of member dissatisfaction pointing to operational or service issues
• Annual contract anniversary or guarantee reconciliation period
• Lack of confidence that self-reported PBM performance data is accurate

Administrative Fee Audit

An Administrative Fee Audit examines the fees your PBM charges for managing your pharmacy benefit (including per-claim fees, implementation charges, technology fees, and other administrative costs) to confirm they align with contracted terms.

With the continued growth of alternative pricing models, fee structures become more complex and harder to track. This audit uncovers hidden surcharges and validates that every administrative dollar billed is contractually justified.

Common Triggers for Conducting This Audit:

• Unexpected increases in administrative expenses without clear explanation
• Transition to alternative or cost-plus pricing models with more complex fee structures
• Administrative Fee invoice errors detected or suspected
• Reporting that is unclear, incomplete, or difficult to reconcile
• Unexpected change in administrative fees

Network Transparency Audit

A Network Transparency Audit validates the accuracy and integrity of your PBM’s pharmacy network arrangements, confirming that network configurations, pharmacy reimbursement rates, and channel designations (retail, mail, specialty) are consistent with your contract.

It shines a light on the financial flows between your plan, your PBM, and the pharmacies dispensing medications to your members, ensuring costs are not inflated through hidden spread or misrouted claims.

Common Triggers for Conducting This Audit:

• Unclear or incomplete reporting on network arrangements and pharmacy reimbursement
• New PBM transparency regulations at the federal or state level
• Shifts to narrow or preferred networks, or introduction of new specialty pharmacy channels
• Concerns about channel bucketing or network tier classifications that drive pricing
• Concerns about PBM billing spread rates in a transparent, pass-through pricing arrangement
• Plan sponsor fiduciary obligations