Audits & Assessments

Ensuring the accuracy of underlying Government Pricing (GP) calculations data is not only important from a compliance perspective, but it is key for a pharmaceutical manufacturer’s bottom line, as this affects various rebates and reimbursement.

We recommend an audit or an assessment for all clients as a first step in identifying the pathway to GP compliance and potential revenue leakage.

Audits

Through an audit, we ensure all processes are being followed, verify the supporting documentation is accurate and current, validate historical calculations and rebate payments, and provide confidence to those who oversee and certify the calculations.

We offer two types of audits, and both include a post-audit report that documents any risks or gaps in your methodologies and processes.

Procedural Audit

Our procedural audit examines the methodology used in calculations (AMP, BP, URA, 340B/PHS Pricing, ASP, Non-FAMP, and FCP), processes followed, and supporting documentation. The methodology is reviewed to ensure it complies with current legislative and regulatory requirements.

The documentation, such as policies, procedures, and reasonable assumptions, are reviewed to ensure accuracy, comprehensiveness, and their ability to be followed. This can be invaluable if recreating the calculations is necessary, due to a new hire or other circumstances. A review of processes ensures proper oversight with the appropriate staff responsible for performing, reviewing, and certifying the calculations.

Calculation Audit

Our calculation audit includes each process under our procedural audit, in addition to conducting parallel calculations. This ensures that calculations can be recreated to align to the reported values. It also confirms that the documentation is not only accurate but is able to be followed correctly.

Our calculation audit is especially valuable to manufacturers who outsource their calculations to a vendor.

Assessments

If the methodology used in the GP calculations is not documented, or if there are no formal processes, policies, and/or procedures in place, an assessment may be more appropriate.

Through an assessment, we will review the calculation methodologies and any existing documentation. We will provide recommendations to ensure compliance with not only the regulations and guidance, but also with the Office of the Inspector General’s Compliance Program Guidance. We will then develop a realistic timeline to implement the necessary changes to become compliant.

Questions every government pricing audit should answer:

Do you have written policies and/or procedures?
Are your policies and procedures updated to reflect the current regulations, legislation, and guidance?
Can you show that your policies and/or procedures are being followed?
Have you documented your reasonable assumptions?
Can you demonstrate that the data used in the calculations is valid and reconciled?
Are your systems and/or spreadsheets producing accurate results?
Do you have good documentation each month/quarter to support your calculations, including relevant communications and the handling of “one-offs" that occurred?
Can you reproduce your calculations, i.e., in the event of an audit or if your GP employee(s) leaves?

How often should you conduct an audit?

As it’s critical to ensure the underlying data in GP calculations is accurate, we recommend considering a rotating audit schedule, especially if the data is more complex.

Here’s what we recommend:

Year 1: GP calculations
Year 2: Class of Trade assignments and underlying data used in the calculations
Year 3: Government rebates/claims (Medicaid, Medicare, TRICARE)