Senate Bill #581 (2019)

AN ACT RELATING TO BUSINESSES AND PROFESSIONS -- PHARMACIES

Establishes audit requirements for pharmacy benefit managers and also establishes annual reporting requirements for health insurers.

View latest version | View original version
View status on official RI website

Subscribe to email updates


Changes since original draft

  • 2019 – S 0581
  • 2019 – S 0581 SUBSTITUTE A
  • ========
  • LC002040
  • LC002040/SUB A
  • ========
  • S T A T E O F R H O D E I S L A N D
  • IN GENERAL ASSEMBLY
  • JANUARY SESSION, A.D. 2019
  • ____________
  • A N A C T
  • RELATING TO BUSINESSES AND PROFESSIONS – PHARMACIES
  • S TATE OF RHODE IS L AND
  • IN GENERAL ASSEMBLY
  • JANUARY SESSION, A.D. 2019
  • ____________
  • A N A C T
  • RELATING TO BUSINESSES AND PROFESSIONS – PHARMACIES
  • Introduced By: Senators Lynch Prata, McCaffrey, and McKenney
  • Date Introduced: March 14, 2019
  • Referred To: Senate Health & Human Services
  • It is enacted by the General Assembly as follows:
  • It is enacted by the GeneralAssembly as follows:
  • SECTION 1. Chapter 5-19.1 of the General Laws entitled "Pharmacies" is hereby amended by adding thereto the following section:
  • 5-19.1-34. Audits.
  • (a) When an on-site audit of the records of a pharmacy is conducted by a pharmacy benefits manager, the audit must be conducted in accordance with the following criteria:
  • (1) A finding of overpayment or underpayment must be based on the actual overpayment or underpayment, and not 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, unless the projected overpayment or denial is a part of a settlement agreed to by the pharmacy or pharmacist;
  • (2) The auditor may not use extrapolation in calculating recoupments or penalties;
  • (3) Any audit that involves clinical or professional judgment must be conducted by, or in consultation with, a pharmacist; and
  • (4) Each entity conducting an audit shall establish an appeal process under which a pharmacy may appeal an unfavorable preliminary audit report to the entity.
  • (b) This section does not apply to any audit, review, or investigation that is initiated based on or involving suspected or alleged fraud, willful misrepresentation or abuse.
  • (c) Prior to an audit, the entity conducting an audit shall give the pharmacy fourteen (14) days advance written notice of the audit, the range of prescription numbers and the range of dates included in the audit. Additionally, the number of prescriptions shall not exceed one hundred (100) selected prescription claims which also includes all associated refills, and the time allotted must be adequate to collect all samples. The examination of signature logs shall not exceed twenty-five (25) in number.
  • (d) A pharmacy has the right to request mediation by a private mediator, agreed upon by the pharmacy and the pharmacy benefits manager, to resolve any disagreements. A request for mediation does not waive any existing rights of appeal available to a pharmacy under this section.
  • (e)(1) A preliminary audit report must be delivered to the pharmacy within sixty (60) days after the conclusion of the audit. A pharmacy must be allowed at least thirty (30) days following receipt of the preliminary audit to provide documentation to address any discrepancy found in the audit. A final audit report must be delivered to the pharmacy within ninety (90) days after receipt of the preliminary audit report or final appeal, whichever is later. A charge-back, recoupment or other penalty may not be assessed until the appeal process provided by the pharmacy benefits manager has been exhausted and the final report issued. Except as provided by state or federal law, audit information may not be shared. Auditors shall only have access to previous audit reports on a particular pharmacy conducted by that same entity.
  • (2) Auditors may initiate a desk audit prior to an on-site audit unless otherwise specified in the law.
  • (3) Contracted auditors cannot be paid based on the findings within an audit.
  • (4) Scanned images of all prescriptions including all scheduled controlled substances are allowed to be used by the pharmacist for an audit. Verbally received prescriptions must be accepted and applicable for desk, on-site and follow up appeal documentation.
  • (5) The period covered by an audit may not exceed two (2) years.
  • (6) Pharmacies are allowed at a minimum one opportunity to reschedule with the auditor if the scheduled audit presents a scheduling conflict for the pharmacist.
  • (f) Any clerical error, typographical error, scrivener's error or computer error regarding a document or record required under the Medicaid program does not constitute a willful violation, and is not subject to criminal penalties without proof of intent to commit fraud.
  • SECTION 2. This act shall take effect upon passage.
  • ========
  • LC002040
  • ========
  • EXPLANATION
  • BY THE LEGISLATIVE COUNCIL
  • OF
  • A N A C T
  • RELATING TO BUSINESSES AND PROFESSIONS – PHARMACIES
  • ***
  • This act would establish audit requirements for pharmacy benefit managers and would also establish annual reporting requirements for health insurers.
  • This act would take effect upon passage. ======== LC002040 ========
  • (a) When an on-site audit of the records of a pharmacy is conducted by a carrier or their intermediary, the audit must be conducted in accordance with the following criteria:
  • (1) A finding of overpayment or underpayment must be based on the actualoverpayment or underpayment, and not 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, unless the projected overpayment or denial is a part of a settlement agreed to by the pharmacy or pharmacist;
  • (2) The auditor may not use extrapolation in calculating recoupments or penalties unless required by state or federallaws or regulations;
  • (3) Any audit that involves clinical judgment must be conducted by, or in consultation with, a pharmacist; and
  • (4) Each entity conducting an audit shall establish an appeal process under which a pharmacy may appealan unfavorable preliminary audit report to the entity.
  • (b) This section does not apply to any audit, review, or investigation that is initiated based on or involving suspected or alleged fraud, willful misrepresentation, or abuse.
  • (c) Prior to an audit, the entity conducting an audit shall give the pharmacy fourteen (14) days advance written notice of the audit and the range of prescription numbers involved in the audit. The carrier or their intermediary may mask the last two digits of such numbers. Additionally, the number of prescriptions shall not exceed one hundred fifty (150) prescription claims and their applicable refills. The time allotted must be adequate to collect all samples. The examination of signature logs shall not exceed twenty-five (25) signature logs in number.
  • (d) A pharmacy has the right to execute the dispute resolution contained in their contract.
  • (e)(1) A preliminary audit report must be delivered to the pharmacy or its corporate office within sixty (60) days after the conclusion of the audit. A pharmacy must be allowed at least thirty (30) days following receipt of the preliminary audit to provide documentation to address any discrepancy found in the audit. A final audit report must be delivered to the pharmacy or its corporate office within ninety (90) days after receipt of the preliminary audit report or final appeal, whichever is later. A charge-back recoupment or other penalty may not be assessed until the appeal process provided by the pharmacy benefits manager has been exhausted and the final report issued. If the identified discrepancy for a single audit exceeds twenty-five thousand dollars ($25,000), future payments in excess of that amount may be withheld pending the adjudication of an appeal. Auditors shall only have access to previous audit reports on a particular pharmacy conducted for the same entity.
  • (2) Auditors may initiate a desk audit prior to an on-site audit unless otherwise specified in the law.
  • (3) Contracted auditors cannot be paid based on the findings within an audit.
  • (4) Scanned images of all prescriptions including all scheduled controlled substances are allowed to be used by the pharmacist for an audit. Verbally received prescriptions must be accepted upon validation by the auditing entity and applicable for the initial desk or on-site audit.
  • (5) The period covered by an audit may not exceed two (2) years.
  • (6) Within five (5) business days of receiving the audit notification, pharmacies are allowed, at a minimum, one opportunity to reschedule with the auditor if the scheduled audit presents a scheduling conflict for the pharmacist.
  • (f) Any clerical error, typographicalerror, scrivener's error, or computer error regarding a document or record required under the Medicaid program does not constitute a willful violation and is not subject to criminal penalties without proof of intent to commit fraud.
  • (g) Limitations.
  • (1) Exceptions. The provisions of this chapter do not apply to an investigative audit of pharmacy records when:
  • (i) Fraud, waste, abuse, or other intentional misconduct is indicated by physicalreview or review of claims data or statements; or
  • LC002040/SUB A - Page 2of 4
  • (ii) Other investigative methods indicate a pharmacy is or has been engaged in criminal wrongdoing, fraud, or other intentional or willful misrepresentation.
  • (2) Federal law. This chapter does not supersede any audit requirements established by federallaw.
  • SECTION 2. This act shalltake effect upon passage. ======== LC002040/SUB A ========
  • LC002040/SUB A - Page 3of 4
  • EXPLANATION
  • BY THE LEGISLATIVE COUNCIL
  • OF
  • A N A C T
  • RELATING TO BUSINESSES AND PROFESSIONS – PHARMACIES
  • ***
  • This act would establish audit requirements for pharmacy benefit managers.
  • This act would take effect upon passage. ======== LC002040/SUB A ========
  • LC002040/SUB A - Page 4of 4

Votes

RIBIT does not have any votes for this legislation yet.
(Vote tracking on RIBIT is still a work-in-progress, so make sure to check the official RI website, too!)