Bill Text: MN HF1236 | 2011-2012 | 87th Legislature | Engrossed
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Pharmacy audit integrity program established.
Spectrum: Bipartisan Bill
Status: (Passed) 2012-04-24 - Secretary of State Chapter 215 04/23/12 [HF1236 Detail]
Download: Minnesota-2011-HF1236-Engrossed.html
Bill Title: Pharmacy audit integrity program established.
Spectrum: Bipartisan Bill
Status: (Passed) 2012-04-24 - Secretary of State Chapter 215 04/23/12 [HF1236 Detail]
Download: Minnesota-2011-HF1236-Engrossed.html
1.2relating to health; establishing a pharmacy audit integrity program;proposing
1.3coding for new law in Minnesota Statutes, chapter 151.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. [151.60] PHARMACY AUDIT INTEGRITY PROGRAM.
1.6The pharmacy audit integrity program is established to provide standards for an
1.7audit of pharmacy records carried out by a pharmacy benefits manager or any entity that
1.8represents pharmacy benefits managers.
1.9 Sec. 2. [151.61] DEFINITIONS.
1.10 Subdivision 1. Scope. For the purposes of sections 151.60 to 151.70, the following
1.11terms have the meanings given.
1.12 Subd. 2. Entity. "Entity" means a pharmacy benefits manager or any person or
1.13organization that represents these companies, groups, or organizations.
1.14 Subd. 3. Pharmacy benefits manager or PBM. "Pharmacy benefits manager"
1.15or "PBM" means a person, business, or other entity that performs pharmacy benefits
1.16management. The term includes a person or entity acting for a PBM in a contractual or
1.17employment relationship in the performance of pharmacy benefits management.
1.18 Subd. 4. Plan sponsor. "Plan sponsor" means the employer in the case of an
1.19employee benefit plan established or maintained by a single employer, a group purchaser
1.20as defined in section 62J.03, subdivision 6, or the employee organization in the case of a
1.21plan established or maintained by an employee organization, an association, joint board
1.22trustees, committee, or other similar group that establishes or maintains the plan.
2.1 Sec. 3. [151.62] PHARMACY BENEFIT MANAGER CONTRACT.
2.2An amendment to pharmacy audit terms in a contract between a PBM and a
2.3pharmacy must be disclosed to the pharmacy at least 60 days prior to the effective date
2.4of the proposed change.
2.5 Sec. 4. [151.63] PROCEDURE AND PROCESS FOR CONDUCTING AND
2.6REPORTING AN AUDIT.
2.7 Subdivision 1. Audit procedures. Unless otherwise prohibited by federal
2.8requirements or regulations, any entity conducting a pharmacy audit must follow the
2.9following procedures.
2.10(1) A pharmacy must be given notice 14 days before an initial on-site audit is
2.11conducted.
2.12(2) An audit that involves clinical or professional judgment must be conducted by or
2.13in consultation with a licensed pharmacist.
2.14(3) Each pharmacy shall be audited under the same standards and parameters as
2.15other similarly situated pharmacies.
2.16 Subd. 2. Audit process. Unless otherwise prohibited by federal requirements or
2.17regulations, for any entity conducting a pharmacy audit the following audit items apply.
2.18(1) The period covered by the audit may not exceed 24 months from the date that
2.19the claim was submitted to or adjudicated by the entity, unless a longer period is required
2.20under state or federal law.
2.21(2) If an entity uses random sampling as a method for selecting a set of claims
2.22for examination, the sample size must be appropriate for a statistically reliable sample.
2.23Notwithstanding section 151.69, the auditing entity shall provide the pharmacy a masked
2.24list that provides a prescription number or date range that the auditing entity is seeking
2.25to audit.
2.26(3) An on-site audit may not take place during the first five business days of the
2.27month unless consented to by the pharmacy.
2.28(4) Auditors may not enter the pharmacy area unless escorted where patient-specific
2.29information is available and to the extent possible must be out of sight and hearing range
2.30of the pharmacy customers.
2.31(5) Any recoupment will not be deducted against future remittances until after the
2.32appeals process and both parties have received the results of the final audit.
2.33(6) A PBM may not require information to be written on a prescription unless
2.34the information is required to be written on the prescription by state or federal law.
2.35Recoupment may be assessed for items not written on the prescription if:
3.1(i) additional information is required in the provider manual; or
3.2(ii) the information is required by the Food and Drug Administration (FDA); or
3.3(iii) the information is required by the drug manufacturer's product safety program;
3.4and
3.5(iv) the information in clauses (i), (ii), or (iii) is not readily available for the auditor
3.6at the time of the audit.
3.7(7) The auditing company or agent may not receive payment based on a percentage
3.8of the amount recovered. This section does not prevent the entity conducting the audit
3.9from charging or assessing the responsible party, directly or indirectly, based on amounts
3.10recouped if both of the following conditions are met:
3.11(i) the plan sponsor and the entity conducting the audit have a contract that explicitly
3.12states the percentage charge or assessment to the plan sponsor; and
3.13(ii) a commission to an agent or employee of the entity conducting the audit is not
3.14based, directly or indirectly, on amounts recouped.
3.15 Sec. 5. [151.64] REQUIREMENTS FOR RECOUPMENT OR CHARGEBACK.
3.16For recoupment or chargeback, the following criteria apply.
3.17(1) Audit parameters must consider consumer-oriented parameters based on
3.18manufacturer listings.
3.19(2) A pharmacy's usual and customary price for compounded medications is
3.20considered the reimbursable cost unless the pricing methodology is outlined in the
3.21provider contract.
3.22(3) A finding of overpayment or underpayment must be based on the actual
3.23overpayment or underpayment and not a projection based on the number of patients served
3.24having a similar diagnosis or on the number of similar orders or refills for similar drugs.
3.25(4) The entity conducting the audit shall not use extrapolation in calculating the
3.26recoupment or penalties for audits unless required by state or federal law or regulations.
3.27(5) Calculations of overpayments must not include dispensing fees unless a
3.28prescription was not actually dispensed; the prescriber denied authorization; the
3.29prescription dispensed was a medication error by the pharmacy; or the identified
3.30overpayment is solely based on an extra dispensing fee.
3.31(6) An entity may not consider any clerical or record-keeping error, such as a
3.32typographical error, scrivener's error, or computer error regarding a required document or
3.33record as fraud, however such errors may be subject to recoupment.
4.1(7) In the case of errors that have no actual financial harm to the patient or plan, the
4.2PBM must not assess any chargebacks. Errors that are a result of the pharmacy failing to
4.3comply with a formal corrective action plan may be subject to recovery.
4.4(8) Interest may not accrue during the audit period for either party, beginning with
4.5the notice of the audit and ending with the final audit report.
4.6 Sec. 6. [151.65] DOCUMENTATION.
4.7(a) To validate the pharmacy record and delivery, the pharmacy may use authentic
4.8and verifiable statements or records including medication administration records of a
4.9nursing home, assisted living facility, hospital, physician, or other authorized practitioner
4.10or additional audit documentation parameters located in the provider manual.
4.11(b) Any legal prescription that meets the requirements in this chapter may be used
4.12to validate claims in connection with prescriptions, refills, or changes in prescriptions,
4.13including medication administration records, faxes, e-prescriptions, or documented
4.14telephone calls from the prescriber or the prescriber's agents.
4.15 Sec. 7. [151.66] APPEALS PROCESS.
4.16The entity conducting the audit must establish a written appeals process which must
4.17include appeals of preliminary reports and final reports.
4.18 Sec. 8. [151.67] AUDIT INFORMATION AND REPORTS.
4.19(a) A preliminary audit report must be delivered to the pharmacy within 60 days
4.20after the conclusion of the audit.
4.21(b) A pharmacy must be allowed at least 45 days following receipt of the preliminary
4.22audit to provide documentation to address any discrepancy found in the audit.
4.23(c) A final audit report must be delivered to the pharmacy within 120 days after
4.24receipt of the preliminary audit report or final appeal, whichever is later.
4.25(d) An entity shall remit any money due to a pharmacy or pharmacist as a result of
4.26an underpayment of a claim within 45 days after the appeals process has been exhausted
4.27and the final audit report has been issued.
4.28 Sec. 9. [151.68] DISCLOSURES TO PLAN SPONSOR.
4.29Where contractually required, an auditing entity must provide a copy to the plan
4.30sponsor of its claims that were included in the audit, and any recouped money shall be
4.31returned to the plan sponsor.
5.1 Sec. 10. [151.69] APPLICABILITY OF OTHER LAWS AND REGULATIONS.
5.2Sections 151.62 to 151.67 do not apply to any investigative audit that involves
5.3suspected fraud, willful misrepresentation, abuse, or any audit completed by Minnesota
5.4health care programs.
5.5 Sec. 11. [151.70] VIOLATIONS.
5.6Violations of sections 151.62 to 151.68 may be grounds for action, but are not
5.7deemed misdemeanors as described in section 151.29.
1.3coding for new law in Minnesota Statutes, chapter 151.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. [151.60] PHARMACY AUDIT INTEGRITY PROGRAM.
1.6The pharmacy audit integrity program is established to provide standards for an
1.7audit of pharmacy records carried out by a pharmacy benefits manager or any entity that
1.8represents pharmacy benefits managers.
1.9 Sec. 2. [151.61] DEFINITIONS.
1.10 Subdivision 1. Scope. For the purposes of sections 151.60 to 151.70, the following
1.11terms have the meanings given.
1.12 Subd. 2. Entity. "Entity" means a pharmacy benefits manager or any person or
1.13organization that represents these companies, groups, or organizations.
1.14 Subd. 3. Pharmacy benefits manager or PBM. "Pharmacy benefits manager"
1.15or "PBM" means a person, business, or other entity that performs pharmacy benefits
1.16management. The term includes a person or entity acting for a PBM in a contractual or
1.17employment relationship in the performance of pharmacy benefits management.
1.18 Subd. 4. Plan sponsor. "Plan sponsor" means the employer in the case of an
1.19employee benefit plan established or maintained by a single employer, a group purchaser
1.20as defined in section 62J.03, subdivision 6, or the employee organization in the case of a
1.21plan established or maintained by an employee organization, an association, joint board
1.22trustees, committee, or other similar group that establishes or maintains the plan.
2.1 Sec. 3. [151.62] PHARMACY BENEFIT MANAGER CONTRACT.
2.2An amendment to pharmacy audit terms in a contract between a PBM and a
2.3pharmacy must be disclosed to the pharmacy at least 60 days prior to the effective date
2.4of the proposed change.
2.5 Sec. 4. [151.63] PROCEDURE AND PROCESS FOR CONDUCTING AND
2.6REPORTING AN AUDIT.
2.7 Subdivision 1. Audit procedures. Unless otherwise prohibited by federal
2.8requirements or regulations, any entity conducting a pharmacy audit must follow the
2.9following procedures.
2.10(1) A pharmacy must be given notice 14 days before an initial on-site audit is
2.11conducted.
2.12(2) An audit that involves clinical or professional judgment must be conducted by or
2.13in consultation with a licensed pharmacist.
2.14(3) Each pharmacy shall be audited under the same standards and parameters as
2.15other similarly situated pharmacies.
2.16 Subd. 2. Audit process. Unless otherwise prohibited by federal requirements or
2.17regulations, for any entity conducting a pharmacy audit the following audit items apply.
2.18(1) The period covered by the audit may not exceed 24 months from the date that
2.19the claim was submitted to or adjudicated by the entity, unless a longer period is required
2.20under state or federal law.
2.21(2) If an entity uses random sampling as a method for selecting a set of claims
2.22for examination, the sample size must be appropriate for a statistically reliable sample.
2.23Notwithstanding section 151.69, the auditing entity shall provide the pharmacy a masked
2.24list that provides a prescription number or date range that the auditing entity is seeking
2.25to audit.
2.26(3) An on-site audit may not take place during the first five business days of the
2.27month unless consented to by the pharmacy.
2.28(4) Auditors may not enter the pharmacy area unless escorted where patient-specific
2.29information is available and to the extent possible must be out of sight and hearing range
2.30of the pharmacy customers.
2.31(5) Any recoupment will not be deducted against future remittances until after the
2.32appeals process and both parties have received the results of the final audit.
2.33(6) A PBM may not require information to be written on a prescription unless
2.34the information is required to be written on the prescription by state or federal law.
2.35Recoupment may be assessed for items not written on the prescription if:
3.1(i) additional information is required in the provider manual; or
3.2(ii) the information is required by the Food and Drug Administration (FDA); or
3.3(iii) the information is required by the drug manufacturer's product safety program;
3.4and
3.5(iv) the information in clauses (i), (ii), or (iii) is not readily available for the auditor
3.6at the time of the audit.
3.7(7) The auditing company or agent may not receive payment based on a percentage
3.8of the amount recovered. This section does not prevent the entity conducting the audit
3.9from charging or assessing the responsible party, directly or indirectly, based on amounts
3.10recouped if both of the following conditions are met:
3.11(i) the plan sponsor and the entity conducting the audit have a contract that explicitly
3.12states the percentage charge or assessment to the plan sponsor; and
3.13(ii) a commission to an agent or employee of the entity conducting the audit is not
3.14based, directly or indirectly, on amounts recouped.
3.15 Sec. 5. [151.64] REQUIREMENTS FOR RECOUPMENT OR CHARGEBACK.
3.16For recoupment or chargeback, the following criteria apply.
3.17(1) Audit parameters must consider consumer-oriented parameters based on
3.18manufacturer listings.
3.19(2) A pharmacy's usual and customary price for compounded medications is
3.20considered the reimbursable cost unless the pricing methodology is outlined in the
3.21provider contract.
3.22(3) A finding of overpayment or underpayment must be based on the actual
3.23overpayment or underpayment and not a projection based on the number of patients served
3.24having a similar diagnosis or on the number of similar orders or refills for similar drugs.
3.25(4) The entity conducting the audit shall not use extrapolation in calculating the
3.26recoupment or penalties for audits unless required by state or federal law or regulations.
3.27(5) Calculations of overpayments must not include dispensing fees unless a
3.28prescription was not actually dispensed; the prescriber denied authorization; the
3.29prescription dispensed was a medication error by the pharmacy; or the identified
3.30overpayment is solely based on an extra dispensing fee.
3.31(6) An entity may not consider any clerical or record-keeping error, such as a
3.32typographical error, scrivener's error, or computer error regarding a required document or
3.33record as fraud, however such errors may be subject to recoupment.
4.1(7) In the case of errors that have no actual financial harm to the patient or plan, the
4.2PBM must not assess any chargebacks. Errors that are a result of the pharmacy failing to
4.3comply with a formal corrective action plan may be subject to recovery.
4.4(8) Interest may not accrue during the audit period for either party, beginning with
4.5the notice of the audit and ending with the final audit report.
4.6 Sec. 6. [151.65] DOCUMENTATION.
4.7(a) To validate the pharmacy record and delivery, the pharmacy may use authentic
4.8and verifiable statements or records including medication administration records of a
4.9nursing home, assisted living facility, hospital, physician, or other authorized practitioner
4.10or additional audit documentation parameters located in the provider manual.
4.11(b) Any legal prescription that meets the requirements in this chapter may be used
4.12to validate claims in connection with prescriptions, refills, or changes in prescriptions,
4.13including medication administration records, faxes, e-prescriptions, or documented
4.14telephone calls from the prescriber or the prescriber's agents.
4.15 Sec. 7. [151.66] APPEALS PROCESS.
4.16The entity conducting the audit must establish a written appeals process which must
4.17include appeals of preliminary reports and final reports.
4.18 Sec. 8. [151.67] AUDIT INFORMATION AND REPORTS.
4.19(a) A preliminary audit report must be delivered to the pharmacy within 60 days
4.20after the conclusion of the audit.
4.21(b) A pharmacy must be allowed at least 45 days following receipt of the preliminary
4.22audit to provide documentation to address any discrepancy found in the audit.
4.23(c) A final audit report must be delivered to the pharmacy within 120 days after
4.24receipt of the preliminary audit report or final appeal, whichever is later.
4.25(d) An entity shall remit any money due to a pharmacy or pharmacist as a result of
4.26an underpayment of a claim within 45 days after the appeals process has been exhausted
4.27and the final audit report has been issued.
4.28 Sec. 9. [151.68] DISCLOSURES TO PLAN SPONSOR.
4.29Where contractually required, an auditing entity must provide a copy to the plan
4.30sponsor of its claims that were included in the audit, and any recouped money shall be
4.31returned to the plan sponsor.
5.1 Sec. 10. [151.69] APPLICABILITY OF OTHER LAWS AND REGULATIONS.
5.2Sections 151.62 to 151.67 do not apply to any investigative audit that involves
5.3suspected fraud, willful misrepresentation, abuse, or any audit completed by Minnesota
5.4health care programs.
5.5 Sec. 11. [151.70] VIOLATIONS.
5.6Violations of sections 151.62 to 151.68 may be grounds for action, but are not
5.7deemed misdemeanors as described in section 151.29.
