(a) This Code section shall be known and may be cited as "The Pharmacy Audit Bill of Rights."
(b) Notwithstanding any other law, when an audit of the records of a pharmacy is conducted by a managed care company, insurance company, third-party payor, pharmacy benefits manager, any entity licensed by the Department of Insurance, the Department of Community Health under Article 7 of Chapter 4 of Title 49, any entity that represents such companies, groups, or department, or a private person bringing a claim pursuant to Article 7B of Chapter 4 of Title 49, it shall be conducted in accordance with the following bill of rights:
(1) The entity conducting the initial on-site audit must give the pharmacy notice at least 14 days prior to conducting the initial on-site audit for each audit cycle and include in such notice a comprehensive list of claims by prescription number to be audited, although the final two digits may be omitted;
(2) Any audit which involves clinical or professional judgment must be conducted by or in consultation with a pharmacist;
(3) Any clerical or record-keeping error, including but not limited to a typographical error, scrivener's error, or computer error, regarding a required document or record shall not in and of itself constitute fraud. No such claim shall be subject to criminal penalties without proof of intent to commit fraud. No recoupment of the cost of drugs or medicinal supplies properly dispensed shall be allowed if such error has occurred and been resolved in accordance with paragraph (4) of this subsection; provided, however, that recoupment shall be allowed to the extent that such error resulted in an overpayment, though recoupment shall be limited to the amount overpaid;
(4) A pharmacy shall be allowed at least 30 days following the conclusion of an on-site audit or receipt of the preliminary audit report in which to correct a clerical or record-keeping error or produce documentation to address any discrepancy found during an audit, including to secure and remit an appropriate copy of the record from a hospital, physician, or other authorized practitioner of the healing arts for drugs or medicinal supplies written or transmitted by any means of communication if the lack of such a record or an error in such a record is identified in the course of an on-site audit or noticed within the preliminary audit report;
(5) A pharmacy may use the records of a hospital, physician, or other authorized practitioner of the healing arts for drugs or medicinal supplies written or transmitted by any means of communication for purposes of validating the pharmacy record with respect to orders or refills of a legend or narcotic drug;
(6) A finding of an overpayment or underpayment may be a projection based on the number of patients served having a similar diagnosis or on the number of similar orders or refills for similar drugs; however, recoupment of claims must be based on the actual overpayment or underpayment unless the projection for overpayment or underpayment is part of a settlement as agreed to by the pharmacy;
(7) Each pharmacy shall be audited under the same standards and parameters as other similarly situated pharmacies audited by the entity;
(8) The period covered by an audit may not exceed two years from the date the claim was submitted to or adjudicated by a managed care company, insurance company, third-party payor, pharmacy benefits manager, any entity licensed by the Department of Insurance, the Department of Community Health under Article 7 of Chapter 4 of Title 49, any entity that represents such companies, groups, or department;
(9) An audit may not be initiated or scheduled during the first seven calendar days of any month due to the high volume of prescriptions filled during that time unless otherwise consented to by the pharmacy;
(10) The preliminary audit report must be delivered to the pharmacy within 120 days after conclusion of the audit. A final audit report shall be delivered to the pharmacy within six months after receipt of the preliminary audit report or final appeal, as provided for in subsection (c) of this Code section, whichever is later; and
(11) The audit criteria set forth in this subsection shall apply only to audits of claims submitted for payment after July 1, 2006. Notwithstanding any other provision in this subsection, the agency conducting the audit shall not use the accounting practice of extrapolation in calculating recoupments or penalties for audits.
(c) Recoupments of any disputed funds shall only occur after final internal disposition of the audit, including the appeals process as set forth in subsection (d) of this Code section.
(d) Each entity conducting an audit shall establish an internal appeals process under which a pharmacy shall have at least 30 days from the delivery of the preliminary audit report to appeal an unfavorable preliminary audit report to the entity. If, following the appeal, the entity finds that an unfavorable audit report or any portion thereof is unsubstantiated, the entity shall dismiss the audit report or such portion without the necessity of any further proceedings.
(e) Each entity conducting an audit shall provide a copy of the final audit report, after completion of any review process, to the plan sponsor at its request or in an alternate format.
(f) This Code section shall not apply to any investigative audit which involves fraud, willful misrepresentation, or abuse, including without limitation investigative audits under Article 7 of Chapter 4 of Title 49, Code Section 33-1-16, or any other statutory provision which authorizes investigations relating to insurance fraud.
(g) The provisions of paragraph (3) of subsection (b) of this Code section shall not apply to the Department of Community Health conducting audits under Article 7 of Chapter 4 of Title 49.
(h) The entity conducting the audit may not pay the agent or employee who is conducting the audit based on a percentage of the amount recovered.
(i) The Commissioner of Insurance shall have enforcement authority over this Code section and shall have the authority granted pursuant to Chapter 64 of Title 33, relating to the regulation and licensure of pharmacy benefits managers.
Section: Previous 26-4-110.1 26-4-111 26-4-112 26-4-113 26-4-114 26-4-114.1 26-4-115 26-4-115.1 26-4-116 26-4-116.1 26-4-116.2 26-4-116.3 26-4-117 26-4-118Last modified: October 14, 2016