HB 6: "An Act establishing procedures and guidelines for auditing pharmacy records; and providing for an effective date."
00 HOUSE BILL NO. 6 01 "An Act establishing procedures and guidelines for auditing pharmacy records; and 02 providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 05 to read: 06 INTENT. This Act is intended to establish standards for an audit of pharmacy records 07 carried out by an insurer, a managed care company, a hospital or medical service corporation, 08 a third-party payor, a pharmacy benefits manager, or an entity that represents an insurer, a 09 managed care company, a hospital or medical service corporation, a third-party payor, or a 10 pharmacy benefits manager. 11 * Sec. 2. AS 08.80 is amended by adding a new section to read: 12 Sec. 08.80.477. Pharmacy audits. (a) When an audit of the records of a 13 pharmacy licensed in this state is conducted by an insurer, managed care company, 14 hospital or medical service corporation, third-party payor, or pharmacy benefits
01 manager, 02 (1) for each audit cycle, the auditor shall provide the pharmacy or 03 pharmacist with notice of the audit at least two weeks before conducting the initial on- 04 site audit; 05 (2) unless the pharmacy and the auditor agree otherwise, the audit may 06 not be scheduled to occur during the first seven business days of a month because of 07 the high volume of prescriptions that are filled during that time; 08 (3) the insurer, managed care company, hospital or medical service 09 corporation, third-party payor, or pharmacy benefits manager may not conduct the 10 audit within 90 days after an audit in which no errors were found; in this paragraph, 11 "error" does not mean a clerical error, record-keeping error, or typographical error, 12 unless the auditor reasonably determines that the error was intentional or the auditor 13 identifies a pattern of errors; 14 (4) the audit of a claim must occur within two years after the date the 15 claim was submitted; 16 (5) if the audit involves clinical or professional judgment, the audit 17 shall be conducted by or in consultation with a pharmacist licensed in this or another 18 state; 19 (6) the auditor shall audit the pharmacy using the same standards and 20 parameters used in audits of other similarly situated pharmacies; 21 (7) the auditor may not use the accounting practice of extrapolation to 22 establish an overpayment or underpayment or for calculating recoupment or penalties; 23 (8) a finding by the auditor of overpayment or underpayment shall be 24 based on an actual overpayment or underpayment and may not be based on a 25 projection based on the number of patients served who have a similar diagnosis or on 26 the number of similar orders or refills for similar drugs; 27 (9) calculation by the auditor of an overpayment may not include 28 dispensing fees for a prescription that was dispensed to the patient, if any portion of 29 the claim and associated dispensing fee is payable by the insurer, managed care 30 company, hospital or medical service corporation, third-party payor, or pharmacy 31 benefits manager under the terms of the contract and if the claim is not fraudulent;
01 (10) the auditor may not assess a charge-back, recoupment, or other 02 penalty against a pharmacy solely because a prescription is mailed or delivered at the 03 request of a patient as part of a routine business practice of the pharmacy; 04 (11) to the extent the audit finds clerical or record-keeping errors in a 05 required document or record, the pharmacy may not be subject to recoupment unless 06 the clerical or record-keeping error results in actual financial harm to the insurer, the 07 managed care company, the hospital or medical service corporation, the third-party 08 payor, the pharmacy benefits manager, or a customer; 09 (12) the auditor shall deliver the preliminary audit report to the 10 pharmacy within 120 days after the completion of the audit; 11 (13) interest may not accrue from the date of completion of the audit to 12 the delivery date of the preliminary audit report, unless the auditor finds proof of 13 intent to commit fraud; 14 (14) for at least 30 days following receipt of the preliminary audit 15 report, the pharmacy shall be allowed to produce documentation to address a 16 discrepancy found during the audit; the pharmacy may use any record, including a 17 record of a hospital, physician, or other health care provider, or other written or 18 electronic record to validate a pharmacy record; 19 (15) the insurer, managed care company, hospital or medical service 20 corporation, third-party payor, or pharmacy benefits manager shall establish a written 21 appeal process through which the pharmacy may appeal an unfavorable preliminary or 22 final audit report; 23 (16) the auditor shall deliver the final audit report to the pharmacy 24 within 90 days after receipt of the preliminary audit report or final appeal; 25 (17) the auditor may not receive compensation based on the percentage 26 of the amount recovered by the auditor; 27 (18) the auditor shall provide a copy of the final report to the health 28 benefit plan sponsor affected by the audit; 29 (19) patient information accessed in the course of the audit shall be 30 kept confidential and may not be used for marketing purposes. 31 (b) This section does not apply to
01 (1) a criminal investigation; or 02 (2) an investigation or audit by a governmental agency, including an 03 investigation or audit by a governmental agency administering a state Medicaid 04 program. 05 (c) In this section, "health benefit plan" has the meaning given in 06 AS 21.54.500. 07 * Sec. 3. The uncodified law of the State of Alaska is amended by adding a new section to 08 read: 09 APPLICABILITY. This Act applies to pharmacy audits conducted on or after the 10 effective date of this Act. 11 * Sec. 4. This Act takes effect January 1, 2014.