2019 -- S 0581

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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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:

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     SECTION 1. Chapter 5-19.1 of the General Laws entitled "Pharmacies" is hereby

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amended by adding thereto the following section:

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     5-19.1-34. Audits.

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     (a) When an on-site audit of the records of a pharmacy is conducted by a pharmacy

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benefits manager, the audit must be conducted in accordance with the following criteria:

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     (1) A finding of overpayment or underpayment must be based on the actual overpayment

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or underpayment, and not a projection based on the number of patients served having a similar

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diagnosis, or on the number of similar orders or refills for similar drugs, unless the projected

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overpayment or denial is a part of a settlement agreed to by the pharmacy or pharmacist;

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     (2) The auditor may not use extrapolation in calculating recoupments or penalties;

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     (3) Any audit that involves clinical or professional judgment must be conducted by, or in

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consultation with, a pharmacist; and

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     (4) Each entity conducting an audit shall establish an appeal process under which a

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pharmacy may appeal an unfavorable preliminary audit report to the entity.

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     (b) This section does not apply to any audit, review, or investigation that is initiated

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based on or involving suspected or alleged fraud, willful misrepresentation or abuse.

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     (c) Prior to an audit, the entity conducting an audit shall give the pharmacy fourteen (14)

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days advance written notice of the audit, the range of prescription numbers and the range of dates

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included in the audit. Additionally, the number of prescriptions shall not exceed one hundred

 

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(100) selected prescription claims which also includes all associated refills, and the time allotted

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must be adequate to collect all samples. The examination of signature logs shall not exceed

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twenty-five (25) in number.

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     (d) A pharmacy has the right to request mediation by a private mediator, agreed upon by

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the pharmacy and the pharmacy benefits manager, to resolve any disagreements. A request for

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mediation does not waive any existing rights of appeal available to a pharmacy under this section.

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     (e)(1) A preliminary audit report must be delivered to the pharmacy within sixty (60)

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days after the conclusion of the audit. A pharmacy must be allowed at least thirty (30) days

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following receipt of the preliminary audit to provide documentation to address any discrepancy

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found in the audit. A final audit report must be delivered to the pharmacy within ninety (90) days

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after receipt of the preliminary audit report or final appeal, whichever is later. A charge-back,

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recoupment or other penalty may not be assessed until the appeal process provided by the

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pharmacy benefits manager has been exhausted and the final report issued. Except as provided by

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state or federal law, audit information may not be shared. Auditors shall only have access to

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previous audit reports on a particular pharmacy conducted by that same entity.

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     (2) Auditors may initiate a desk audit prior to an on-site audit unless otherwise specified

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in the law.

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     (3) Contracted auditors cannot be paid based on the findings within an audit.

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     (4) Scanned images of all prescriptions including all scheduled controlled substances are

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allowed to be used by the pharmacist for an audit. Verbally received prescriptions must be

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accepted and applicable for desk, on-site and follow up appeal documentation.

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     (5) The period covered by an audit may not exceed two (2) years.

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     (6) Pharmacies are allowed at a minimum one opportunity to reschedule with the auditor

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if the scheduled audit presents a scheduling conflict for the pharmacist.

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     (f) Any clerical error, typographical error, scrivener's error or computer error regarding a

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document or record required under the Medicaid program does not constitute a willful violation,

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and is not subject to criminal penalties without proof of intent to commit fraud.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- PHARMACIES

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     This act would establish audit requirements for pharmacy benefit managers and would

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also establish annual reporting requirements for health insurers.

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     This act would take effect upon passage.

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