Snapshots vs. streaming: why true pharmacy payment integrity needs both audits and continuous monitoring

Why oversight can’t be one-dimensional

Pharmacy benefit oversight is often described as a single process, but in reality, it’s two distinct disciplines: auditing and continuous monitoring. Both matter yet they serve very different purposes.

Episodic audits (often annual or quarterly) look backward to find what went wrong and recover dollars already lost. Continuous monitoring operates in real time, helping payers recover dollars already lost and correct issues so they don’t happen again.

For health plans and self-funded employers, understanding and integrating both approaches is essential to achieving full pharmacy payment integrity.

The role of episodic (recovery) audits: accountability after the fact

Episodic audits, sometimes called recovery audits, offer a valuable retrospective view of what happened last year. They provide accountability, measurable recoveries, and insights into vendor performance.

What episodic audits do well

They answer questions like: What went wrong? How much was overpaid? How much can we recover?

Common examples include:

• Annual reviews uncover coordination of benefits (COB) errors, leading to negotiated recoveries.

• A pricing audit reveals rebate shortfalls or contract variance from PBM guarantees.

• Retrospective analysis tallies missed discounts or incorrect dispensing fees, with clawbacks achieved.

These audits are critical for transparency, vendor accountability, and compliance documentation.

The limits of episodic audits

But audits are inherently reactive; a look in the rearview mirror. Key challenges include:

• Time lag: Dollars may have been out the door for months before errors are detected.

• Partial recovery: Negotiations rarely recoup 100% of overpaid funds.

• Missed prevention: The same systemic error can continue until the next audit cycle.

Audits enforce accountability, but they don’t stop errors before they happen.

Continuous monitoring: real-time integrity and cost avoidance

Continuous monitoring flips the oversight model from reactive to proactive. Instead of asking what happened, it asks can we stop it now?

With continuous monitoring, every claim is reviewed in real time against benchmarks, policies, and contract terms. Errors are identified for recovery and corrected at the source, preventing them from recurring — the dollars you never lose because they don't leak again.

What continuous monitoring adds

Real-time oversight can:

• Detect NADAC mispricing instantly and correct it before reimbursement.

• Identify duplicate therapy or early refills and block inappropriate claims.

• Ensure COB rules are applied correctly before dollars leave the plan.

• Flag high-cost specialty claims for real-time validation or prepayment review.

This approach delivers continuous protection for every claim, every day ensuring that overspend is prevented, not just recovered.

What this means for plans, PBMs, and auditors

For health plans

• Pairing episodic audits with continuous monitoring delivers full visibility — accountability for past dollars and prevention for future ones.

• Real-time oversight minimizes disputes and enhances regulatory readiness, demonstrating strong CMS/OIG compliance control.

• By closing the loop between audit findings and real-time monitoring, plans can reduce total pharmacy spend and strengthen vendor alignment.

For self-funded employers

• Integrating recovery audits with continuous monitoring turns pharmacy oversight into a daily control, not a once-a-year exercise.

• Continuous protection at the point of adjudication helps prevent avoidable spend before it hits your balance sheet.

• Visibility into both audit recoveries and cost-avoidance metrics supports data-driven renewal discussions and stronger PBM accountability.

For channel partners

• Offering both retrospective and real-time oversight positions you as a collaborative integrity partner, not just a processor or after-the-fact reviewer.

• Continuous monitoring reduces downstream rework and client disputes by catching configuration errors early.

• Demonstrating proactive integrity controls builds trust with plan sponsors and employers while differentiating your service in a tightening oversight market.

Wrap-up

Audits are snapshots: essential for accountability but limited by time. Continuous monitoring is a live feed ensuring every claim is validated before payment.

In today’s high-cost, high-scrutiny pharmacy environment, relying on audits alone is like checking a rearview mirror: useful for seeing what happened, but it won’t prevent what’s ahead. The future of pharmacy payment integrity lies in pairing recovery with cost avoidance so every dollar, past or future, is protected.