Bill Text: MI SB0287 | 2017-2018 | 99th Legislature | Introduced
Bill Title: Insurance; health benefits; pharmacy benefit managers; regulate. Creates new act.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2017-03-30 - Referred To Committee On Insurance [SB0287 Detail]
Download: Michigan-2017-SB0287-Introduced.html
SENATE BILL No. 287
March 30, 2017, Introduced by Senators SCHUITMAKER, KNEZEK and GREEN and referred to the Committee on Insurance.
A bill to provide for the regulation of the management of
pharmacy benefits; to require the licensing of pharmacy benefit
managers; to provide for the regulation of certain other entities
under certain circumstances; to provide for the powers and duties
of certain state governmental officers and entities; to prescribe
penalties and provide remedies; and to allow for the promulgation
of rules.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 101. This act shall be known and may be cited as the
2 "pharmacy benefit management act".
3 Sec. 103. For purposes of this act, the words and phrases
4 defined in sections 105 to 111 have the meanings ascribed to them
5 in those sections.
6 Sec. 105. (1) "Board of pharmacy" means the Michigan board of
1 pharmacy created in part 177 of the public health code, 1978 PA
2 368, MCL 333.17701 to 333.17780.
3 (2) "Claim" means an attempt to cause a health benefit payer
4 or a pharmacy benefit manager to make a payment to cover a service
5 that is provided by a pharmacy benefit.
6 (3) "Department" means the department of insurance and
7 financial services.
8 (4) "Director" means the director of the department or his or
9 her designee.
10 Sec. 107. (1) "Federal act" means the federal food, drug, and
11 cosmetic act, 21 USC 301 to 399f.
12 (2) "Food and Drug Administration" means the United States
13 Food and Drug Administration.
14 (3) "Health benefit payer" means a public or private entity
15 that offers, provides, administers, or manages a health care
16 benefit plan, including, but not limited to, all of the following:
17 (a) An insurer or health maintenance organization regulated
18 under the insurance code of 1956, 1956 PA 218, MCL 500.100 to
19 500.8302, or a dental care corporation regulated under 1963 PA 125,
20 MCL 550.351 to 550.373.
21 (b) A nonprofit health care corporation.
22 (c) A preferred provider organization.
23 (d) The medical services administration in the department of
24 health and human services.
25 (e) A person acting in a contractual relationship with an
26 entity described in subdivisions (a) to (d) to perform any activity
27 on behalf of the entity described in subdivisions (a) to (d).
1 Sec. 109. (1) "Maximum allowable cost price" means a maximum
2 reimbursement amount for a multiple source drug.
3 (2) "Multiple source drug" means a drug for which there are 2
4 or more prescription drugs, each of which meets both of the
5 following requirements, as determined by the director:
6 (a) Is considered to be pharmaceutically equivalent or
7 otherwise interchangeable by the Food and Drug Administration.
8 (b) Is generally and readily available for purchase by
9 pharmacies in this state from national or regional wholesalers and
10 is not obsolete.
11 (3) "Obsolete" means that the prescription drug may be listed
12 in the national pricing compendia but is no longer actively
13 marketed by the manufacturer or labeler.
14 Sec. 111. (1) "Person" means an individual, sole
15 proprietorship, partnership, corporation, association, or any other
16 legal entity.
17 (2) "Pharmacy" means that term as defined in section 17707 of
18 the public health code, 1978 PA 368, MCL 333.17707.
19 (3) "Pharmacy benefit" means a health care benefit plan that
20 is offered by a health benefit payer and provides coverage for a
21 pharmacy service to a covered individual. Coverage under a pharmacy
22 benefit includes, but is not limited to, coverage for a
23 prescription drug that is dispensed to a covered individual.
24 (4) "Pharmacy benefit manager" means a person that manages a
25 pharmacy benefit on behalf of a health benefit payer. A person that
26 engages in, or subcontracts for, 3 or more of the following
27 activities is considered a pharmacy benefit manager that is subject
1 to this act:
2 (a) Claims processing.
3 (b) Pharmacy network management.
4 (c) Pharmacy discount card management.
5 (d) Payment of claims to pharmacies for prescription drugs
6 dispensed to individuals covered by a pharmacy benefit.
7 (e) Clinical formulary development and management services,
8 including, but not limited to, utilization management and quality
9 assurance programs.
10 (f) Rebate contracting and administration.
11 (g) Conducting audits of network pharmacies.
12 (h) Setting pharmacy reimbursement pricing and methodologies,
13 including maximum allowable cost price and other prescription drug
14 pricing standards, and determining single source drugs or multiple
15 source drugs.
16 (i) Retention of any spread or differential between what is
17 received under a pharmacy benefit as reimbursement for a
18 prescription drug and what is paid to pharmacies by the pharmacy
19 benefit manager for the prescription drug.
20 (5) "Prescription drug" means that term as defined in section
21 17708 of the public health code, 1978 PA 368, MCL 333.17708.
22 (6) "Prescription drug pricing standard" means a standard for
23 reimbursing a prescription drug that is based on the cost of the
24 prescription drug or an industry-recognized benchmark for the
25 pricing of the prescription drug. Prescription drug pricing
26 standard includes, but is not limited to, the average wholesale
27 price, the wholesale acquisition cost, the maximum allowable cost,
1 the national average drug acquisition cost, and the average
2 manufacturer price.
3 (7) "Temporarily unavailable" means that the prescription drug
4 is experiencing short-term supply interruptions and only
5 inconsistent or intermittent supply is available in the current
6 marketplace.
7 Sec. 113. (1) A pharmacy benefit manager that provides
8 services to residents of this state shall apply for, obtain, and
9 maintain a certificate of authority to operate as a pharmacy
10 benefit manager from the department. A certificate of authority
11 under this act is renewable annually.
12 (2) The director shall collect, and the persons affected shall
13 pay to the director, the following fees that, on appropriation, the
14 department shall use to cover the costs incurred by the department
15 in administering this act:
|
16 |
(a) Filing fee to accompany application |
|
17 |
for pharmacy benefit manager's certificate |
|
18 |
of authority........................................ $ 200.00. |
|
19 |
(b) Certificate of authority for a |
|
20 |
pharmacy benefit manager............................ $ 25.00. |
21 (3) Subject to this section, an applicant for a certificate of
22 authority to operate in this state as a pharmacy benefit manager
23 shall submit to the department an application in a form and manner
24 prescribed by the director. An officer or authorized representative
25 of the pharmacy benefit manager shall verify the application form.
26 (4) An applicant shall include with an application form all of
1 the following:
2 (a) All organizational documents, including, but not limited
3 to, articles of incorporation, bylaws, and other similar documents,
4 and any amendments to the organizational documents.
5 (b) The names, addresses, titles, and qualifications of the
6 members and officers of the board of directors, board of trustees,
7 or other governing body or committee of the applicant, or the
8 partners, members, or owners if the applicant is a partnership or
9 other entity or association.
10 (c) A detailed description of the claims processing services,
11 pharmacy services, insurance services, other prescription drug or
12 device services, or other administrative services provided by the
13 applicant.
14 (d) The name and address of the agent for service of process
15 in this state.
16 (e) Financial statements for the current year and the
17 preceding year that show the assets, liabilities, direct or
18 indirect income, and any other sources of financial support
19 considered sufficient by the director that demonstrate financial
20 stability and viability of the pharmacy benefit manager to meet its
21 full obligations to covered individuals and network pharmacies. The
22 director may allow a recent financial statement prepared by an
23 independent certified public accountant to meet the requirement of
24 this subdivision.
25 (f) Any other information the director requires. However, the
26 director shall not demand trade secret information from an
27 applicant.
1 (5) The director may revoke, suspend, deny, or restrict a
2 certificate of authority of a pharmacy benefit manager for a
3 violation of this act or on other grounds or violations of state or
4 federal laws as determined necessary or appropriate by the
5 director. A pharmacy benefit manager has the same rights to notice,
6 hearings, and other provisions that are provided to insurers under
7 the insurance code of 1956, 1956 PA 218, MCL 500.100 to 500.8302.
8 If a certificate of authority is revoked, suspended, or denied, the
9 director may permit the operation of the pharmacy benefit manager
10 for a limited time not to exceed 60 days under conditions and
11 restrictions as determined necessary by the director for the
12 beneficial interests of the covered individuals and network
13 pharmacies.
14 (6) The director may renew a certificate of authority of a
15 pharmacy benefit manager, subject to any restrictions considered
16 necessary or appropriate by the director.
17 Sec. 115. (1) Both of the following apply to a contract
18 between a pharmacy benefit manager and a pharmacy or between a
19 pharmacy benefit manager and a pharmacy's contracting
20 representative or agent, including, but not limited to, a pharmacy
21 services administrative organization:
22 (a) If a pharmacy benefit manager uses a prescription drug
23 pricing standard to reimburse a pharmacy or a health facility, both
24 of the following apply:
25 (i) The contract entered into by the pharmacy benefit manager
26 must include a current list of the sources used to determine the
27 prescription drug pricing standard. The pharmacy benefit manager
1 shall update the prescription drug pricing standard not less often
2 than every 7 days and provide a means by which the pharmacy may
3 promptly review the updates in a format that is readily available
4 and accessible.
5 (ii) The pharmacy benefit manager shall use the same
6 prescription drug pricing standard or set of prescription drug
7 pricing standards for all covered individuals and pharmacies
8 participating in the same pharmacy benefit. This subparagraph does
9 not prohibit a pharmacy benefit manager from managing multiple
10 pharmacy benefits for 1 or more health benefit payers.
11 (b) The pharmacy benefit manager shall include in the contract
12 a process to appeal, investigate, and resolve disputes regarding a
13 prescription drug pricing standard, which process must include all
14 of the following:
15 (i) A 21-day limit on the right to appeal following the
16 initial claim.
17 (ii) A requirement that the appeal be investigated and
18 resolved within 10 business days after the appeal.
19 (iii) A telephone number at which the pharmacy may contact the
20 pharmacy benefit manager to speak to an individual responsible for
21 processing appeals.
22 (iv) A requirement that the pharmacy benefit manager provide a
23 reason for any appeal denial and the identification of the national
24 drug code of a prescription drug that may be purchased by the
25 pharmacy at a price at or below the prescription drug pricing
26 standard used by the pharmacy benefit manager.
27 (v) A requirement that the pharmacy benefit manager do all of
1 the following if the appeal is successful:
2 (A) Adjust the prescription drug pricing standard that is the
3 subject of the appeal. The adjustment under this sub-subparagraph
4 shall take effect on the day after the date the appeal is resolved.
5 (B) Apply the prescription drug pricing standard that is
6 adjusted under sub-subparagraph (A) to all pharmacies and covered
7 individuals participating in the pharmacy benefit to which the
8 appeal was made.
9 (C) Allow the appealing pharmacy to resubmit the claim to the
10 pharmacy benefit manager for reimbursement using the prescription
11 drug pricing standard adjusted under sub-subparagraph (A).
12 Sec. 117. A pharmacy shall be reimbursed for a legally valid
13 claim at a rate of not less than the rate in effect at the time of
14 original claim adjudication as submitted at the point of sale.
15 Sec. 119. (1) A pharmacy benefit manager shall not do any of
16 the following:
17 (a) Mandate that a covered individual use a specific pharmacy,
18 mail-order pharmacy, specialty pharmacy, or any other pharmacy, if
19 the pharmacy benefit manager has an ownership interest in the
20 pharmacy or if the pharmacy has an ownership interest in the
21 pharmacy benefit manager.
22 (b) Except as otherwise provided in this subdivision, provide
23 an incentive to a covered individual to encourage the use of a
24 specific pharmacy if the incentive only applies to a pharmacy in
25 which the pharmacy benefit manager has an ownership interest or
26 provide an incentive to a covered individual to encourage the use
27 of a specific pharmacy if the incentive only applies to a pharmacy
1 that has an ownership interest in the pharmacy benefit manager.
2 This subdivision does not apply if the covered individual willingly
3 designates as the covered individual's primary pharmacy a pharmacy
4 in which the pharmacy benefit manager has an ownership interest or
5 that has an ownership interest in the pharmacy benefit manager.
6 (c) Require that a pharmacist or pharmacy participate in a
7 network managed by the pharmacy benefit manager as a condition for
8 the pharmacy to participate in another network managed by the same
9 pharmacy benefit manager.
10 (d) Automatically enroll or disenroll a pharmacy in a contract
11 or modify an existing agreement without written agreement of the
12 pharmacist, pharmacy, or person acting on behalf of the pharmacist
13 or pharmacy.
14 (e) Prohibit a covered individual from receiving a
15 prescription drug benefit, including a 90-day supply of a
16 prescription drug, at a network pharmacy of the pharmacy benefit
17 manager.
18 (f) Impose on a covered individual who uses a pharmacy a
19 copayment, deductible, fee, limitation on benefits, or other
20 condition or requirement that is not otherwise imposed on the
21 covered individual when the covered individual uses a mail-order
22 pharmacy.
23 (g) Distribute to a pharmacy a prescription, or a copy of a
24 prescription, to dispense a drug utilizing information submitted to
25 the pharmacy benefit manager for the purpose of obtaining a prior
26 authorization or to complete any other nondispensing or
27 administrative function that is conducted by the pharmacy benefit
1 manager.
2 (h) Solicit a covered individual utilizing information
3 submitted to the pharmacy benefit manager for the purpose of
4 obtaining a prior authorization or to complete any other
5 nondispensing or administrative function that is conducted by the
6 pharmacy benefit manager.
7 (2) This section does not mandate the inclusion of a pharmacy
8 in a health benefit payer network or pharmacy benefit manager's
9 network or the exclusion of a pharmacy from a health benefit payer
10 network or pharmacy benefit manager's network.
11 Sec. 121. (1) Except as otherwise provided in this subsection,
12 a pharmacy benefit manager shall not sell, lease, or rent
13 utilization or claims data that the pharmacy benefit manager
14 possesses as a result of a contract between the pharmacy benefit
15 manager and the health benefit payer. A pharmacy benefit manager
16 may sell, lease, or rent the data described in this subsection if
17 the pharmacy benefit manager obtains the covered individual's
18 consent before selling, leasing, or renting the data.
19 (2) A pharmacy benefit manager shall not directly contact a
20 covered individual on behalf of a health benefit payer without the
21 express written permission of the health benefit payer and the
22 covered individual. A health benefit payer may make a request of a
23 covered individual for permission under this subsection.
24 (3) A pharmacy benefit manager shall not transmit to a
25 pharmacy any personally identifiable utilization or claims data
26 that is related to a covered individual unless the covered
27 individual has voluntarily elected to fill a prescription at that
1 pharmacy.
2 Sec. 123. Each pharmacy benefit manager shall maintain a
3 current formulary list by major therapeutic category and make the
4 list available to prescribers and pharmacies that are participating
5 in the pharmacy benefit manager's network or have contracted with a
6 health benefit payer that utilizes the pharmacy benefit manager for
7 the management of the health benefit payer's pharmacy benefit.
8 Sec. 125. (1) Except as otherwise provided in subsection (2),
9 if a pharmacy benefit manager makes or approves a change in a
10 formulary that causes a prescription drug to not be covered,
11 applies a new or revised dose restriction that causes a
12 prescription drug to not be covered for the number of doses
13 prescribed, or applies a new or revised step therapy or prior
14 authorization requirement that causes a prescription drug to not be
15 covered until the step therapy or prior authorization requirement
16 has been met, the pharmacy benefit manager shall do 1 of the
17 following:
18 (a) At least 60 days before the effective date of the
19 formulary change, new or revised dose restriction, or new or
20 revised step therapy or prior authorization requirement, provide
21 notice of the formulary change, new or revised dose restriction, or
22 new or revised step therapy or prior authorization requirement to
23 each covered individual who is currently receiving benefits for the
24 prescription drug. The notice described in this subdivision must be
25 provided in writing or, if the covered individual has agreed to
26 receive information in this manner, by electronic means.
27 (b) If a covered individual who is currently receiving
1 benefits for the prescription drug requests a refill of the
2 prescription drug, cover up to a 60-day supply of the prescription
3 drug on the same terms as covered previously if the prescription
4 drug continues to be prescribed for the covered individual during
5 that time period and inform the covered individual of the formulary
6 change, new or revised dose restriction, or new or revised step
7 therapy or prior authorization requirement, unless either of the
8 following applies:
9 (i) The covered individual's prescriber agrees to a request
10 from the health benefit payer or the pharmacist to change the
11 prescription in accordance with the formulary change, new or
12 revised dose restriction, or new or revised step therapy or prior
13 authorization requirement.
14 (ii) If the formulary change, new or revised dose restriction,
15 or new or revised step therapy or prior authorization requirement
16 pertains to generic substitution, the prescription does not
17 prohibit generic substitution or the covered individual agrees at
18 the pharmacy to generic substitution.
19 (2) A pharmacy benefit manager is not required to provide the
20 notice described in subsection (1) or cover up to a 60-day supply
21 of a prescription drug under subsection (1) if either of the
22 following applies:
23 (a) The prescription drug is being discontinued from coverage
24 on the formulary for safety reasons or because the prescription
25 drug cannot be supplied by or has been withdrawn from the market by
26 the drug's manufacturer.
27 (b) The formulary change, new or revised dose restriction, or
1 new or revised step therapy or prior authorization requirement for
2 the prescription drug is made, approved, or applied for safety
3 reasons.
4 Sec. 127. (1) Except as otherwise provided in subsection (2),
5 if a pharmacy benefit manager makes or approves a change in a
6 formulary that causes a prescription drug to not be covered,
7 applies a new or revised dose restriction that causes a
8 prescription for a prescription drug to not be covered for the
9 number of doses prescribed, or applies a new or revised step
10 therapy or prior authorization requirement that causes a
11 prescription drug to not be covered until the requirements of the
12 step therapy or prior authorization requirement have been met, the
13 pharmacy benefit manager shall provide notice of the formulary
14 change, new or revised dose restriction, or new or revised step
15 therapy or prior authorization requirement to all of the following
16 in the following time frames:
17 (a) Except as otherwise provided in this subdivision, to
18 prescribers at least 60 days before the effective date of the
19 formulary change, new or revised dose restriction, or new or
20 revised step therapy or prior authorization requirement. A pharmacy
21 benefit manager is not required to provide notice to a prescriber
22 under this subdivision if the pharmacy benefit manager provides
23 coverage of up to a 60-day supply of the prescription drug as
24 provided in section 125.
25 (b) To pharmacies participating in the pharmacy benefit
26 manager's network, by the effective date of the formulary change,
27 new or revised dose restriction, or new or revised step therapy or
1 prior authorization requirement.
2 (c) To prescribers who did not receive advance notice of the
3 change under subdivision (a), by the effective date of the
4 formulary change, new or revised dose restriction, or new or
5 revised step therapy or prior authorization requirement.
6 (2) Subsection (1) does not apply if the formulary change, new
7 or revised dose restriction, or new or revised step therapy or
8 prior authorization requirement is being made, approved, or applied
9 for safety reasons or because the prescription drug cannot be
10 supplied by, or has been withdrawn from the market by, the drug's
11 manufacturer.
12 Sec. 129. (1) A pharmacy benefit manager shall secure the
13 participation in its network of a sufficient number of pharmacies
14 that dispense, other than by mail order, prescription drugs
15 directly to covered individuals to ensure convenient access to
16 those pharmacies that are within 30 miles of a covered individual's
17 residence.
18 (2) If a covered individual wishes to use an out-of-network
19 pharmacy that is geographically closer to the covered individual's
20 residence than the closest in-network pharmacy, a pharmacy benefit
21 manager shall allow the covered individual to designate the out-of-
22 network pharmacy as the covered individual's primary pharmacy and
23 shall treat the out-of-network pharmacy as though it were in-
24 network for the purpose of providing services under a pharmacy
25 benefit. A covered individual who designates an out-of-network
26 pharmacy as the covered individual's primary pharmacy under this
27 subsection is eligible for all incentives, reductions, and cost
1 sharing that he or she would otherwise be eligible to receive if
2 the covered individual had designated an in-network pharmacy as his
3 or her primary pharmacy.
4 Sec. 131. (1) Subject to this section, a health benefit payer
5 or a pharmacy benefit manager may conduct an audit of a pharmacy in
6 this state. A health benefit payer or a pharmacy benefit manager
7 that conducts an audit of a pharmacy in this state shall do all of
8 the following:
9 (a) In its pharmacy contract, identify and describe in detail
10 the audit procedures including the appeals process described in
11 subdivision (m). A health benefit payer or pharmacy benefit manager
12 shall update its pharmacy contract and communicate any changes to
13 the pharmacy as changes to the contract occur.
14 (b) Provide written notice to the pharmacy at least 2 weeks
15 before initiating and scheduling the initial on-site audit for each
16 audit cycle. Unless otherwise consented to by the pharmacist, a
17 health benefit payer or pharmacy benefit manager shall not initiate
18 or schedule an on-site audit during the first 6 calendar days of a
19 month, a holiday time frame, a weekend, or a Monday. A health
20 benefit payer or pharmacy benefit manager shall be flexible in
21 initiating and scheduling an audit at a time that is reasonably
22 convenient to the pharmacy and the health benefit payer or pharmacy
23 benefit manager.
24 (c) Utilize every effort to minimize inconvenience and
25 disruption to pharmacy operations during the audit process. A
26 health benefit payer or pharmacy benefit manager that conducts an
27 audit of a pharmacy in this state shall not interfere with the
1 delivery of pharmacy services to a patient.
2 (d) Conduct an audit that involves clinical or professional
3 judgment by or in consultation with a pharmacist.
4 (e) Subject to the requirements of article 15 of the public
5 health code, 1978 PA 368, MCL 333.16101 to 333.18838, for the
6 purpose of validating a pharmacy record with respect to orders,
7 refills, or changes in prescriptions, allow the use of either of
8 the following:
9 (i) Hospital or physician records that are written or that are
10 transmitted or stored electronically, including file annotations,
11 document images, and other supporting documentation that is date-
12 and time-stamped.
13 (ii) A prescription that complies with the requirements of the
14 board of pharmacy and state and federal law.
15 (f) Base any finding of an overpayment or underpayment on the
16 actual overpayment or underpayment of claims.
17 (g) Subject to subsection (4), base any recoupment or payment
18 adjustments of claims on a calculation that is reasonable and
19 proportional in relation to the type of error detected.
20 (h) If there is a finding of an underpayment, reimburse the
21 pharmacy as soon as possible after detection.
22 (i) Conduct its audit of each pharmacy under the same sampling
23 standards, parameters, and procedures that the health benefit payer
24 or pharmacy benefit manager uses when auditing other similarly
25 licensed pharmacies. The health benefit payer shall provide to the
26 pharmacy samples of the standards, parameters, and procedures for
27 the audit being conducted.
1 (j) Audit only claims submitted or adjudicated within the 1-
2 year period immediately preceding the initiation of the audit
3 unless a longer period is permitted under federal or state law.
4 (k) Not receive payment based on a percentage of the amount
5 recovered.
6 (l) Not include the dispensing fee amount in a finding of an
7 overpayment.
8 (m) Establish a written appeals process that includes a
9 process to appeal preliminary audit reports and final audit reports
10 prepared under this section. If either party is not satisfied with
11 the results of the appeal, that party may seek mediation.
12 (2) On completion of an audit of a pharmacy, the health
13 benefit payer or pharmacy benefit manager shall do all of the
14 following:
15 (a) Deliver a preliminary written audit report to the pharmacy
16 on or before the expiration of 60 days after the completion of the
17 audit. The preliminary written audit report must include contact
18 information for the person performing the audit and a description
19 of the appeal process established under subsection (1)(m).
20 (b) Allow the pharmacy at least 30 days following its receipt
21 of the preliminary written audit report under subdivision (a) to
22 produce documentation to address any discrepancy found during the
23 audit.
24 (c) If an appeal is not filed, deliver a final written audit
25 report to the pharmacy within 90 days after the time described in
26 subdivision (b) has elapsed. If an appeal is filed, deliver a final
27 written audit report to the pharmacy within 90 days after the
1 conclusion of the appeal.
2 (d) Except as otherwise provided in this section, only recoup
3 disputed funds or overpayments or restore underpayments after the
4 final written audit report is delivered to the pharmacy under
5 subdivision (c).
6 (e) On request, provide to the sponsor of the health care
7 benefit plan a copy of the final written audit report delivered to
8 the pharmacy under subdivision (c).
9 (3) A health benefit payer or pharmacy benefit manager shall
10 not conduct an extrapolation audit in calculating recoupments,
11 restoration, or penalties for an audit under this section. As used
12 in this subsection, "extrapolation audit" means an audit of a
13 sample of prescription drug benefit claims submitted by a pharmacy
14 to the health benefit payer that is then used to estimate audit
15 results for a larger batch or group of claims not reviewed during
16 the audit.
17 (4) Any clerical or record-keeping error, including a
18 typographical error, a scrivener's error, or a computer error,
19 regarding a required document or record that is found during an
20 audit under this section does not, on its face, constitute fraud.
21 An error described in this subsection does not subject the
22 individual involved to criminal penalties without proof of intent
23 to commit fraud. To the extent that an audit results in the
24 identification of a clerical or record-keeping error, including a
25 typographical error, a scrivener's error, or a computer error, in a
26 required document or record, the pharmacy is not subject to
27 recoupment of funds by the health benefit payer or pharmacy benefit
1 manager unless the health benefit payer can provide proof of intent
2 to commit fraud or the error results in actual financial harm to
3 the health benefit payer, pharmacy benefit manager, or a covered
4 individual.
5 (5) This section does not apply to any of the following:
6 (a) An audit conducted to investigate fraud, willful
7 misrepresentation, or abuse, including, but not limited to,
8 investigative audits or audits conducted under any other statutory
9 provision that authorizes investigation relating to insurance
10 fraud.
11 (b) An audit based on a criminal investigation.
12 (6) This section does not impair or supersede a provision
13 regarding health benefit payer pharmacy audits in the insurance
14 code of 1956, 1956 PA 218, MCL 500.100 to 500.8302. If any
15 provision of this section conflicts with a provision of the
16 insurance code of 1956, 1956 PA 218, MCL 500.100 to 500.8302, with
17 regard to health benefit payer pharmacy audits, the provision in
18 the insurance code of 1956, 1956 PA 218, MCL 500.100 to 500.8302,
19 controls.
20 Sec. 133. (1) The director is responsible for the enforcement
21 of this act. The director shall take action or impose sanctions to
22 bring noncomplying entities into full compliance with this act. The
23 director has the same authority to examine and investigate entities
24 regulated by this act and may enforce this act in the same manner
25 as provided for insurers under the insurance code of 1956, 1956 PA
26 218, MCL 500.100 to 500.8302.
27 (2) The department may promulgate rules under the
1 administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
2 24.328, that it considers necessary to implement, administer, and
3 enforce this act.
4 Enacting section 1. This act takes effect 90 days after the
5 date it is enacted into law.
6 Enacting section 2. This act applies to contracts delivered,
7 executed, issued, amended, adjusted, or renewed in this state
8 beginning January 1, 2019.
