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Our attorneys stay on top of changes in legislation, agency regulations, case law, and industry trends—then craft timely legal alerts to keep clients up to date on legal developments important to their business.

December 20, 2021

Caremark Ushers in New Year by "Clarifying" Its Aberrant Quantities and Volume Provision

Over the past two years, Caremark has aggressively taken action against independent pharmacies through audits and terminations for “aberrant” dispensing. Many pharmacies continue to believe that aberrant dispensing relates only to the “aberrant products” list published, and regularly added to, by Caremark, which we have discussed in numerous other legal alerts, including these alerts:

This is a critical misconception by pharmacies that could lead to significant audit findings and even termination. 

Caremark’s amended “Aberrant Quantities and Volume” (AQV) provision is now expanded to “Aberrant Practices and Trends.” The amendment, effective January 1, 2022, is essentially guidance as to how Caremark has been interpreting the AQV provision for the past few years—so yes, Caremark is providing some additional transparency. However, the amendments are only high-level, vague categories of trends that Caremark is targeting. Thus, independent pharmacies are still forced to guess whether their dispensing trends on a dollars or claims basis—as determined solely by Caremark—will land them on Caremark’s naughty list and result in an audit, suspension, or worse—an immediate termination without due process rights.      

The “practices and trends” that Caremark will target in 2022 are: 

  1. Dispensing “aberrant quantities” of medications, limiting medications dispensed within a “therapeutic category,” or simply not dispensing in patterns like your competitors  
  2. Purchasing and dispensing “higher-cost drug products”
  3. Submitting test claims (which Caremark considers a misuse of confidential patient information)
  4. Participating in actions or programs or creating a business model that results in higher-priced products being submitted on claims to Caremark
  5. Putting the pharmacy’s financial success ahead of the patient’s health or increasing the costs for Caremark, health plans, or patients

While some of the goals of the amendments could be interpreted to target fraudulent behavior or actions, there are also troubling vagaries and subjective language that could allow Caremark to utilize the amendments as a sword. With yet another weapon to be wielded against independent pharmacies in audits to recoup monies on valid claims and to eliminate competing independent pharmacies from its pharmacy networks, the trend that is most concerning in this equation is pharmacy benefit manager (PBM) overreach. With great power comes great responsibility—and the responsibility here is questionable when transparency is not provided, business models are attacked solely for being profitable, or reducing patient costs over Caremark’s profits is placed at the forefront. 

Barclay Damon’s Health Care Controversies Team assists its independent pharmacy clients with combatting abusive audits and terminations by PBMs, including those for aberrant dispensing practices. The team also assists independent pharmacies with best practices and the development of policies and procedures to avoid negative audit findings and terminations. We encourage independent pharmacies to retain and consult knowledgeable legal counsel who can properly advise them with regard to their relationships with PBMs and health care payors.  

If you have any questions regarding the content of this alert, please contact Linda Clark, Health Care Controversies Team leader, at; Brad Gallagher, partner, at; Jennifer Cruz, associate, at; or another member of the firm’s Health Care Controversies Team.

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