Rebate Audits

Minimum Rebate Audit

A Minimum Rebate Audit ensures the PBM is living up to the contracted minimum payments and that the appropriate rebate amounts are being reimbursed to your organization for utilization within each plan year. PSG reviews the minimum rebate guarantees as outlined in the contract on a per claim basis, takes into account any rebate exclusions, calculates the expected rebate guarantee dollars for the audit period, and compares that figure to the rebates reimbursed by the PBM. If the contract indicates you are guaranteed the higher of a minimum rebate or a percentage of collected rebates, PSG verifies that the higher of the two was paid.

This method of rebate audit is typically completed electronically and does not require an onsite visit to the PBM. Any discrepancies are submitted for review, and PSG negotiates reimbursement for any shortfalls identified in rebate payment.

Common Triggers for Conducting This Audit:

• When a PBM provides its annual minimum rebate guarantee reconciliation report
• Rebate shortfalls or unexpected changes in rebate payments
• When a new agreement or amendment modifying rebate guarantees goes into place
• Transition to alternative pricing models where rebate guarantee structures become more complex
• Concerns that the PBM is not properly categorizing claims according to rebate classifications described in the contract

Onsite or Virtual Pharmacy Manufacturer Contract Review Rebate Audit

An Onsite or Virtual Pharmacy Rebate Audit involves a review of drug manufacturer contracts to validate that the appropriate rebate amounts are being reimbursed to your organization under the pharmacy benefit. The scope is subject to PBM contract stipulations but typically includes at least two calendar quarters per review year of the top manufacturers (based on rebate payments).

This method of auditing determines with reasonable assurance that the rebates paid to your organization are compliant with manufacturer agreements between each of the top manufacturers and the PBM, GPO, or rebate aggregator. PSG collects claims data, rebate payment reports (including rebate submissions to manufacturers, rebate payments from manufacturers, rebate payments to your organization, and global rebate exclusions), and plan design information including formulary, product categories, benefit designs, and market share definitions.

PSG identifies the top manufacturers by line of business, coordinates a three- to five-day onsite or virtual audit, and compares manufacturer contracted rebates to those passed on to your organization, reconciling any discrepancies.

Common Triggers for Conducting This Audit:

• Annual rebate audit cycle (if actual rebates are greater than guaranteed rebates, if client has a custom formulary, or if there were significant findings from a previous audit)
• Specialty drug categorization concerns, given the higher guarantees associated with these medications
• Concerns about inaccurate PBM rates invoiced to pharmaceutical manufacturers
• Suspicion that the PBM is not invoicing manufacturers for all required components
• Regulatory scrutiny or fiduciary obligations requiring independent rebate validation

Onsite or Virtual Rebate Credit Validation Audit

An Onsite or Virtual Rebate Credit Audit validates the accuracy and transparency of rebate credits applied to your pharmacy benefit. As market events such as insulin price decreases and biosimilar launches have reduced traditional rebate dollars, many payers have added rebate credits to their PBM contract.

This audit verifies that the rebate credit amounts are being calculated and applied correctly, that the reduction in rebate amounts is accurately reflected, and that the PBM is maintaining full transparency regarding how credits are determined. Without independent validation, rebate credits can obscure the true economics of your rebate program and make it difficult to assess whether you are receiving the full value.

Common Triggers for Conducting This Audit:

• Adoption of rebate credits due to market events (AMPCAP, insulin price reductions, biosimilar launches)
• Concerns about how rebate credit amounts are being calculated or applied
• Lack of transparency in PBM rebate credit reporting
• Significant shifts in rebate guarantee structure tied to alternative pricing models
• Desire to validate that rebate credits accurately reflect the reduction in traditional rebate value

Onsite or Virtual Medical Rebate Audit

An Onsite or Virtual Medical Rebate Audit validates that the appropriate rebate amounts are being reimbursed to your organization under the medical drug benefit. PSG has the expertise and proven processes to audit medical rebate dollars, helping to protect your interests and maximize the value of your global pharmacy program while controlling overall costs.

The audit involves an onsite or virtual review of medical drug manufacturer contracts. The scope is subject to PBM or vendor contract stipulations but typically includes at least two calendar quarters per review year of the top manufacturers (based on rebate payments).

This method of auditing determines with reasonable assurance that the medical drug rebates paid to your organization are compliant with manufacturer agreements. The process mirrors the pharmacy rebate audit: PSG collects claims data, rebate payment reports, and plan design information, identifies the top manufacturers, coordinates an onsite or virtual audit, and compares manufacturer contracted rebates to those passed through, reconciling any discrepancies.

With only 43% of employers and 70% of health plans currently capturing medical rebates according to recent research, this audit is particularly valuable for organizations looking to maximize an often-underutilized cost management lever.

Common Triggers for Conducting This Audit:

• Organizations beginning to capture medical drug rebates for the first time and seeking independent validation
• Growing physician-administered drug spend that increases the financial significance of medical drug rebates
• Concerns about whether medical rebate guarantees (if applicable) are being met
• Desire to validate rebate accuracy for medications administered under the medical benefit
• Regulatory or fiduciary obligations requiring independent verification of medical drug rebate payments