PCMA Urges CMS to Partner with PBMs to Strengthen Real-Time Fraud Detection 

Fraud, waste, and abuse in the health care system drive up costs for patients, employers, and unions, and they can lead to serious patient harm. Tens of billions of dollars are lost to fraud every year in health care, with some estimates placing it as high as 10% of total health spending.

That’s why pharmacy benefit managers (PBMs) are committed to identifying and stopping it, in federal health care programs and the commercial market.

The Centers for Medicare & Medicaid Services (CMS) has also made this a priority, and PBMs have unique insights into prescribing, dispensing, payment, and utilization patterns that make them critical partners in this fight. PBMs’ real-time identification of abnormal utilization and emerging schemes can flag bad actors in a way that no one else can. One PBM identified and recovered $300 million of fraud, waste, and abuse in a single year.

Despite these capabilities, there are existing CMS limitations that constrain PBMs from acting as quickly, or sometimes at all, on credible fraud indicators. As fraud schemes evolve faster than traditional oversight systems, these constraints delay timely PBM actions.

For example, PBMs routinely detect situations where drugs are billed for off-label uses, but accountability for prescribers and pharmacies can be limited. Prior authorization in Medicaid and Part D often requires CMS approval. Similarly, PBM monitoring tools can swiftly identify telehealth-enabled fraud, yet unclear guardrails make timely enforcement challenging. These evolving patterns demand real-time, data-driven interventions.

In response to the growing challenges the system is facing to combat fraud, waste, and abuse, CMS solicited public input through a new program called the Comprehensive Regulations to Uncover Suspicious Healthcare (CRUSH) initiative. CMS aims to develop regulations that can reduce fraud and waste across the health care system. PCMA strongly supports CMS’s efforts, and in a letter filed last week, we asked CMS to equip PBMs with clear authority, timely data, and operational flexibility to act rapidly and effectively on credible fraud indicators.

To truly reduce fraud and waste, and keep prescription drug coverage affordable, PCMA urges CMS to:

• Create an expedited pathway to remove bad‑actor pharmacies and other suppliers
• Close claim-level data gaps to enable earlier detection
• Improve the timeliness of non-maintenance negative formulary changes
• Strengthen prescriber-focused tools using modern risk criteria
• Collaborate on emerging technologies to improve cross-program alignment
• Establish clear telemedicine guardrails

Every dollar lost to fraud is a dollar not spent on patient care or used to lower costs. PCMA looks forward to partnering with CMS to better fight the always-evolving fraud, waste, and abuse tactics that negatively impact patients and taxpayers.

Read the full letter HERE.