We are humbled to announce that the Attorney General for Massachusetts recently appointed HLA's Nancy Coffey to serve as an independent monitor for the State in connection with a recent pharmacy settlement. Please join us in congratulating Nancy on this noteworthy achievement.

Background on Monitorships

We have written extensively about how PBM audits can lead to collateral consequences, including referral to state Medicaid agencies and Boards of Pharmacy. Accordingly, PBM audits need to be handled with extreme care, particularly when dealing with the larger PBMs or payors, most of whom cultivate close relationships with state and federal agencies.

Monitors are helpful for negotiating settlements with government agencies in cases involving alleged fraud, waste or abuse (FWA). In particular, government agencies may seek licensing sanctions to prevent conduct from recurring. The use of a monitor provides the government a level of oversight and assurance that drastic remedies, such as exclusion, are unnecessary.

Areas in Which a Monitor Can Help

HHS-OIG historically has relied on outside monitors in cases involving alleged healthcare fraud. OIG frequently will not require exclusion if the individual or entity agrees to an "integrity agreement." Such an agreement typically involves a three-year period in which the monitor oversees compliance enhancements and conducts periodic claims audits.

DEA also has increased reliance on monitors involving controlled substance violations. For example, McKesson's 2017 settlement with the Department of Justice and DEA required the appointment of an independent outside monitor over the company's suspicious order monitoring program, which HLA's founding partner, Anthony Mahajan, helped to build.

Finally, wholesalers have accepted that a pharmacy's use of an independent monitor may alleviate controlled substance concerns. After all, distributors are required to conduct due diligence of their customers and report suspicious orders. If the distributor is able to rely on an outside monitor to verify DEA compliance, all parties benefit.

Nancy Coffey's Expertise

Nancy has extensive healthcare background and expertise. A former high-ranking DEA official, Nancy deeply understands how government agencies conduct investigations and the considerations involved. She also appreciates challenges from the industry side, having served as an expert in opioid and other healthcare fraud cases. Based on the perspective she brings to the table, Nancy's involvement often tips the scales in our clients' favor, resulting in successful settlements.