Forensic Accounting Experts Help Retail Pharmacies Overcome Losses
Robust services from veterans of the industry
Retail pharmacy is a potentially lucrative, but extraordinarily complex industry. Prescription drugs are heavily regulated, and payments are entwined in yards of red tape. Pricing schedules and reimbursement percentages vary widely, making normal bookkeeping confusing and time-consuming. Under the best of circumstances, accounting for retail pharmacy is a constant challenge. But what happens under extraordinary circumstances? If you lose inventory due to theft or fire, can you account for and recover your losses? In such emergencies, North American Forensic Accounting PC has the knowledge and experience you need to recover. Our team is comprised of forensic accounting experts, some of whom have held senior positions at major retail pharmacy chains. Our veteran staff understands the industry, its regulations, and the processes required to help your business bounce back from whatever disruptions come your way.
Helping you recover losses from theft and business interruption
Whether it’s through theft, fire, flood or some other adverse event, your retail pharmacy can suffer devastating losses because of vanishing inventory or the inability to do business. In some cases, business interruption insurance can help you recover, but you need complete accounting records to ascertain your lost profits. Our NAFA team can perform a deep dive into your business records to reconstruct in detail your store’s circumstances before the adverse event, so we can provide a reliable calculation of the lost profits and account for the lost assets you sustained. The forensic accounting experts at NAFA have decades of experience in the retail pharmacy industry and are ready to help you with any litigation or business interruption claims. We present you with a thorough report to bolster your insurance claim, and we can provide confident testimony as expert witnesses on your behalf.
Supporting transactions with business valuations and quality of earnings reports
There was a time when the local pharmacy was a fixture in the neighborhood. Today, major chains dominate the retail pharmacy landscape, and independent pharmacists are coming under intense competition. Still, an independent pharmacy in a good location might command a competitive price from any chain looking to expand into the area. At that point, either the owner or the chain would be well-served to contact NAFA about a business valuation or a quality of earnings report.
Our team is comprised of individuals with experience in pharmacy acquisitions. We know exactly what factors build value in a pharmacy outlet. We examine all business records, but we also assess the human element, which is so important to customer loyalty. We can determine the present value of a store and its prospect for revenue in the future. Our reliable reporting helps you develop a winning transaction strategy.
Our experience also informs us of the pitfalls of certain deal structures that make purchase prices contingent on customer retention rates. Contrary expectations often lead to post-acquisition lawsuits that undermine both sides of the bargain. Our expert guidance can help you avoid misunderstandings that cause conflict and create unnecessary waste.
Third-party contract analysis to validate reimbursements
Reimbursement is the life blood of the retail pharmacy industry. But can you be sure you are being properly paid? Medicare, Medicaid, and the ACA have all contracted with third-party payment programs with the promise of lowering costs for patients. But every Third-Party Payer has a separate set of rules and procedures for reimbursement and pays different percentages. Inevitably errors are made, but how many errors do your bookkeepers catch?
NAFA can perform an in-depth contract analysis, comparing the payments you’ve received to the terms of the contract. We can determine whether you are getting the performance you’re entitled to under these contracts and provide the data you need to pursue remedies for underpayment.
Litigation support for PBM actions
If only underpayments were just the result of billing errors. Unfortunately, evidence suggests there’s something more nefarious at work. Over the last several years, the largest Pharmacy Benefits Managers, companies that oversee major reimbursement plans, have faced serious allegations of misconduct that includes various fraud schemes, such as:
- Misrepresentations of agreements
- Price fixing
- Antitrust violations
These allegations have resulted in hundreds of millions of dollars in damages. NAFA provides litigation support for retail pharmacies that have been victimized by these practices, as well as parties that have been accused. We provide detailed loss calculations for individual pharmacies as well as chains.
Litigation support for personal injury and wrongful death cases
While it is true that modern medicine works miracles to cure disease and restore health, it’s equally true that medication errors can cause severe injury and wrongful death. Prescription errors, such as dispensing the wrong drug or assigning the wrong dosage or failing to check the patient’s history for potentially deadly drug interactions, can expose a pharmacist to significant liability.
In such cases, NAFA calculates sums for economic damages. We take into consideration all relevant factors, including the severity of the injury and the patient’s prognosis for recovery, to present a detailed account of present damages as well as projections of future damages. Armed with this data, our clients and their attorneys can pursue an appropriate negotiation and litigation strategy. If trial becomes necessary, we can appear as expert witnesses, offering compelling testimony to support our calculations.
Industry-specific knowledge helps owner/operators and insurers investigate losses
Retail pharmacies are enticing targets for petty theft. But they are also extremely vulnerable to internal fraud. If you’ve noticed inventory shrinkage, especially among prescription drugs, it may be likely that you have an internal fraud problem. Employees might also be running scams without your knowledge to defraud Medicare, private insurers, and your customers. In today’s climate, where the opioid epidemic has driven demand for a wide range of highly addictive drugs, and the prices of pharmaceuticals are skyrocketing, the temptation to commit fraud may be too great for some of your employees. You must be vigilant, and North American Forensic Accounting PC can help. Our firm is comprised of certified experts in fraud detection and investigation. We have extensive experience with the retail pharmacy industry, and that specific knowledge drives our inquiries and recommendations.
Types of fraud common to the retail pharmacy industry
Fraud is theft by deception, and the victims who are being deceived and ripped off are:
- Your company
- Your customers
- Various insurers
- State and federal government
Here, briefly, are a few common schemes in retail pharmacy fraud:
- Substituting a cheaper medication for the more expensive one the prescriber requested, but charging the higher price
- Billing for nonexistent and counterfeit prescriptions
- Billing several payers for the same order
- Shorting the number of pills in an order
- Automatically refilling a prescription and billing the insurer even when the patient never picks up the order
In the most egregious cases of fraud, pharmacists will falsify orders or short orders of a certain number of pills, and then sell the drugs on the street to individuals who do not have valid prescriptions.
These schemes have a host of negative effects, which include:
- Eroding the public’s confidence in your company
- Contributing to addiction problems ravaging the country
- Draining resources from vital programs, such as Medicare and Medicaid
- Driving up the costs of healthcare insurance premiums
- Siphoning off your company’s revenue
The cost of doing nothing about fraud is too great, for your company individually and for society as a whole.
How NAFA can help retail pharmacies identify and investigate losses from fraud
Fraud flourishes where internal controls are lax. We can show you where your risks of fraud lie, so you can make the necessary corrections to protect your company by performing a fraud risk assessment. NAFA relies on specialized training, decades of experience and FraudSeekerTM, our proprietary tool. If we find evidence of fraud, we can perform a thorough investigation. Working closely with your legal department, we gather the necessary evidence to present a compelling case for work discipline, criminal charges, and civil action to recover losses.
Contact North American Forensic Accounting PC to investigate fraud in retail pharmacies
North American Forensic Accounting PC helps retail pharmacies detect ongoing fraud and assess losses due to business interruption. Headquartered in Harrisburg, PA, NAFA serves clients throughout the United States, including in Philadelphia, Pittsburgh, New York City, Atlanta, Charlotte, Miami, and the Tampa Bay Area. Call us at 347-286-4860 or contact one of our offices online to schedule an appointment.