Question one: What is the actual reimbursement formula?
I do not mean "what is the AWP minus." I mean the full formula, end to end, including every fee and adjustment that gets applied between the moment a claim is adjudicated and the moment money actually hits your bank account.
A typical contract will say something like "AWP minus 15.5% plus a $1.50 dispensing fee." That sounds simple. It is not. What the contract usually does not spell out clearly is the rest of the formula:
- What MAC list applies and how often it updates
- What the GER target is and what happens if you miss it
- What network access fees are charged and to whom
- Whether DIR-style retroactive adjustments apply
- What the appeal process looks like for underpaid claims
- Whether the dispensing fee actually gets paid or whether it gets clawed back
The right ask is not "tell me the formula." The right ask is "walk me through what happens to a $200 generic claim from the moment I submit it to the moment the money is in my account, including every fee and adjustment along the way, in order." If the PBM rep cannot or will not do this, you have your answer about how much they want to be transparent with you.
Question two: What is the appeal process when you underpay me?
Notice the framing. Not "if" you underpay me. Not "in the unlikely event." When. Because PBMs underpay pharmacies constantly. Sometimes through MAC updates that lag behind market prices. Sometimes through outright errors. Sometimes through "interpretation" of contract terms that mysteriously always favors the PBM.
What you want to know in advance:
- Who do I contact to dispute a claim?
- How long do I have to file a dispute?
- What documentation is required?
- How long does the appeal process take?
- What is the success rate of pharmacy appeals?
- Is there an external review option if the internal appeal is denied?
If the answer is anything like "we will work with you" or "our team is responsive," that is a non-answer. The right answer is a written process with specific timelines and a specific contact. If they cannot point to that document, the appeal process does not really exist.
Question three: What happens when you change the contract terms?
Most pharmacy owners assume their contract is fixed once it is signed. It is not. Most PBM contracts contain language that allows the PBM to update fee schedules, MAC lists, network terms, and performance targets at their discretion, with limited or no notice to the pharmacy. The contract you signed in January is not the contract you are operating under in July.
The questions to ask:
- How often can you change the fee schedule, and how much notice will I get?
- Can I terminate the contract if the changes are unacceptable to me?
- Are there any terms that cannot be changed without my consent?
- Where will I find updates to the contract terms when they happen?
The honest answer to most of these is "we can change anything at any time, you find out when it shows up in your remit, and termination requires you to wait out the end of the term." That is a real answer. It tells you exactly what you are signing up for. The PBM that gives you this honest answer is more trustworthy than the one that hides behind vague language about "partnership" and "fair dealing."
What to do with the answers
Here is the part most pharmacy owners get wrong. They ask the questions, they get bad answers, and they sign the contract anyway because they feel like they have no choice. Sometimes that is true. If a PBM controls 30% of your patient base, walking away from their contract is not a real option.
But the answers still matter even if you sign. Because the answers tell you exactly what to watch for and where the leaks are going to happen. A pharmacy that signs a bad contract knowing exactly how it will hurt them is in a completely different position than a pharmacy that signs the same contract blindly. The first one has a defense plan. The second one is going to be surprised every month for two years.
The other thing the answers do is give you ammunition. When the time comes to push back on a clawback, file a class action lawsuit, advocate for state PBM reform, or testify in front of your legislature, the specific answers PBMs gave you in writing become evidence. Document them. Save the emails. Print the contracts. The PBMs are betting that pharmacies will not have the documentation to fight them. Prove them wrong.
One more thing
If you are reading this and you are about to sign a new PBM contract, do not sign it without going through these three questions first. If you are operating under a contract you signed without asking them, pull the contract out today and try to answer them yourself. The answers you find, or fail to find, will tell you most of what you need to know about how to run your pharmacy under that contract for the next year.
And if you want help walking through a specific contract, book the Hotline. I have read more PBM contracts than most pharmacy owners want to think about. Bring the document and we will go through it together.