Bill Text: MN SF973 | 2011-2012 | 87th Legislature | Engrossed
Bill Title: Pharmacy audit integrity program establishment
Spectrum: Slight Partisan Bill (Democrat 3-1)
Status: (Introduced - Dead) 2012-04-17 - HF substituted on General Orders HF1236 [SF973 Detail]
Download: Minnesota-2011-SF973-Engrossed.html
1.2relating to health; establishing a pharmacy audit integrity program;proposing coding 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 151.68, 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 of
1.22trustees, committee, or other similar group that establishes or maintains the plan.
2.1 Sec. 3. [151.63] PROCEDURE AND PROCESS FOR CONDUCTING AND
2.2REPORTING AN AUDIT.
2.3 Subdivision 1. Audit procedures. Unless otherwise prohibited by federal
2.4requirements or regulations, any entity conducting a pharmacy audit must follow the
2.5following procedures.
2.6(1) A pharmacy must be given a written notice before an initial on-site audit is
2.7conducted.
2.8(2) An audit that involves clinical or professional judgment must be conducted by or
2.9in consultation with a pharmacist licensed in this state or the Board of Pharmacy.
2.10(3) Each pharmacy shall be audited under the same standards and parameters as
2.11other similarly situated pharmacies.
2.12 Subd. 2. Audit process. Unless otherwise prohibited by federal requirements or
2.13regulations, for any entity conducting a pharmacy audit the following audit items apply.
2.14(1) The period covered by the audit may not exceed 24 months from the date that the
2.15claim was submitted to or adjudicated by the entity, unless a longer period is permitted
2.16under federal law.
2.17(2) If an entity uses sampling as a method for selecting a set of claims for
2.18examination, the sample size must be appropriate for a statistically reliable sample but
2.19may not exceed 60 prescriptions.
2.20(3) The audit may not take place during the first seven business days of the month
2.21unless consented to by the pharmacy.
2.22(4) Auditors may not enter the pharmacy area where patient-specific information is
2.23available and must be out of sight and hearing range of the pharmacy customers.
2.24(5) Any recoupment will not be deducted against future remittances and shall be
2.25invoiced to the pharmacy for payment.
2.26(6) Recoupment may not be assessed for items on the face of a prescription not
2.27required by the Board of Pharmacy.
2.28(7) The auditing company or agent may not receive payment based on a percentage
2.29of the amount recovered.
2.30 Sec. 4. [151.64] REQUIREMENTS FOR RECOUPMENT OR CHARGEBACK.
2.31For recoupment or chargeback, the following criteria apply.
2.32(1) Audit parameters must consider consumer-oriented parameters based on
2.33manufacturer listings.
3.1(2) A pharmacy's usual and customary price for compounded medications is
3.2considered the reimbursable cost unless an alternate price is published in the provider
3.3contract and signed by both parties.
3.4(3) A finding of overpayment or underpayment must be based on the actual
3.5overpayment or underpayment and not a projection based on the number of patients served
3.6having a similar diagnosis or on the number of similar orders or refills for similar drugs.
3.7(4) The entity conducting the audit shall not use extrapolation in calculating the
3.8recoupment or penalties for audits.
3.9(5) Calculations of overpayments must not include dispensing fees unless a
3.10prescription was not actually dispensed or the prescriber denied authorization.
3.11(6) An entity may not consider as fraud any clerical or record keeping error, such as
3.12a typographical error, scrivener's error, or computer error regarding a required document
3.13or record; however, such errors may be subject to recoupment.
3.14(7) In the case of errors that have no financial harm to the patient or plan, the PBM
3.15must not assess any chargebacks.
3.16(8) Interest may not accrue during the audit period, beginning with the notice of the
3.17audit and ending with the final audit report.
3.18 Sec. 5. [151.65] DOCUMENTATION.
3.19Any legal prescription that meets the requirements in this chapter may be used
3.20to validate claims in connection with prescriptions, refills, or changes in prescriptions,
3.21including medication administration records, faxes, e-prescriptions, or documented
3.22telephone calls from the prescriber or the prescriber's agents.
3.23 Sec. 6. [151.66] APPEALS PROCESS.
3.24The entity conducting the audit must establish a written appeals process which must
3.25include appeals of preliminary reports and final reports. If either party is not satisfied with
3.26the appeal, that party may seek mediation.
3.27 Sec. 7. [151.67] AUDIT INFORMATION AND REPORTS.
3.28(a) A preliminary audit report must be delivered to the pharmacy within 30 days
3.29after the conclusion of the audit.
3.30(b) A pharmacy must be allowed at least 30 days following receipt of the preliminary
3.31audit to provide documentation to address any discrepancy found in the audit.
3.32(c) A final audit report must be delivered to the pharmacy within 90 days after
3.33receipt of the preliminary audit report or final appeal, whichever is later.
4.1(d) No chargeback, recoupment, or other penalties may be assessed until the appeals
4.2process has been exhausted and the final report issued.
4.3(e) An entity shall remit any money due to a pharmacy or pharmacist as a result of
4.4an underpayment of a claim within 30 days after the appeals process has been exhausted
4.5and the final audit report has been issued.
4.6(f) Where not superseded by state or federal law, audit information may not be
4.7shared. Auditors shall have access to previous audit reports on a particular pharmacy
4.8conducted only by that same auditing entity.
4.9 Sec. 8. [151.68] DISCLOSURES TO PLAN SPONSOR.
4.10An auditing entity must provide a copy of the final report to the plan sponsor whose
4.11claims were included in the audit, and any recouped money shall be returned to the plan
4.12sponsor.
4.13 Sec. 9. [151.69] APPLICABILITY OF OTHER LAWS AND REGULATIONS.
4.14Sections 151.60 to 151.68 do not apply to any investigative audit that involves
4.15fraud, willful misrepresentation, or abuse, or any audit completed by Minnesota health
4.16care programs.
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 151.68, 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 of
1.22trustees, committee, or other similar group that establishes or maintains the plan.
2.1 Sec. 3. [151.63] PROCEDURE AND PROCESS FOR CONDUCTING AND
2.2REPORTING AN AUDIT.
2.3 Subdivision 1. Audit procedures. Unless otherwise prohibited by federal
2.4requirements or regulations, any entity conducting a pharmacy audit must follow the
2.5following procedures.
2.6(1) A pharmacy must be given a written notice before an initial on-site audit is
2.7conducted.
2.8(2) An audit that involves clinical or professional judgment must be conducted by or
2.9in consultation with a pharmacist licensed in this state or the Board of Pharmacy.
2.10(3) Each pharmacy shall be audited under the same standards and parameters as
2.11other similarly situated pharmacies.
2.12 Subd. 2. Audit process. Unless otherwise prohibited by federal requirements or
2.13regulations, for any entity conducting a pharmacy audit the following audit items apply.
2.14(1) The period covered by the audit may not exceed 24 months from the date that the
2.15claim was submitted to or adjudicated by the entity, unless a longer period is permitted
2.16under federal law.
2.17(2) If an entity uses sampling as a method for selecting a set of claims for
2.18examination, the sample size must be appropriate for a statistically reliable sample but
2.19may not exceed 60 prescriptions.
2.20(3) The audit may not take place during the first seven business days of the month
2.21unless consented to by the pharmacy.
2.22(4) Auditors may not enter the pharmacy area where patient-specific information is
2.23available and must be out of sight and hearing range of the pharmacy customers.
2.24(5) Any recoupment will not be deducted against future remittances and shall be
2.25invoiced to the pharmacy for payment.
2.26(6) Recoupment may not be assessed for items on the face of a prescription not
2.27required by the Board of Pharmacy.
2.28(7) The auditing company or agent may not receive payment based on a percentage
2.29of the amount recovered.
2.30 Sec. 4. [151.64] REQUIREMENTS FOR RECOUPMENT OR CHARGEBACK.
2.31For recoupment or chargeback, the following criteria apply.
2.32(1) Audit parameters must consider consumer-oriented parameters based on
2.33manufacturer listings.
3.1(2) A pharmacy's usual and customary price for compounded medications is
3.2considered the reimbursable cost unless an alternate price is published in the provider
3.3contract and signed by both parties.
3.4(3) A finding of overpayment or underpayment must be based on the actual
3.5overpayment or underpayment and not a projection based on the number of patients served
3.6having a similar diagnosis or on the number of similar orders or refills for similar drugs.
3.7(4) The entity conducting the audit shall not use extrapolation in calculating the
3.8recoupment or penalties for audits.
3.9(5) Calculations of overpayments must not include dispensing fees unless a
3.10prescription was not actually dispensed or the prescriber denied authorization.
3.11(6) An entity may not consider as fraud any clerical or record keeping error, such as
3.12a typographical error, scrivener's error, or computer error regarding a required document
3.13or record; however, such errors may be subject to recoupment.
3.14(7) In the case of errors that have no financial harm to the patient or plan, the PBM
3.15must not assess any chargebacks.
3.16(8) Interest may not accrue during the audit period, beginning with the notice of the
3.17audit and ending with the final audit report.
3.18 Sec. 5. [151.65] DOCUMENTATION.
3.19Any legal prescription that meets the requirements in this chapter may be used
3.20to validate claims in connection with prescriptions, refills, or changes in prescriptions,
3.21including medication administration records, faxes, e-prescriptions, or documented
3.22telephone calls from the prescriber or the prescriber's agents.
3.23 Sec. 6. [151.66] APPEALS PROCESS.
3.24The entity conducting the audit must establish a written appeals process which must
3.25include appeals of preliminary reports and final reports. If either party is not satisfied with
3.26the appeal, that party may seek mediation.
3.27 Sec. 7. [151.67] AUDIT INFORMATION AND REPORTS.
3.28(a) A preliminary audit report must be delivered to the pharmacy within 30 days
3.29after the conclusion of the audit.
3.30(b) A pharmacy must be allowed at least 30 days following receipt of the preliminary
3.31audit to provide documentation to address any discrepancy found in the audit.
3.32(c) A final audit report must be delivered to the pharmacy within 90 days after
3.33receipt of the preliminary audit report or final appeal, whichever is later.
4.1(d) No chargeback, recoupment, or other penalties may be assessed until the appeals
4.2process has been exhausted and the final report issued.
4.3(e) An entity shall remit any money due to a pharmacy or pharmacist as a result of
4.4an underpayment of a claim within 30 days after the appeals process has been exhausted
4.5and the final audit report has been issued.
4.6(f) Where not superseded by state or federal law, audit information may not be
4.7shared. Auditors shall have access to previous audit reports on a particular pharmacy
4.8conducted only by that same auditing entity.
4.9 Sec. 8. [151.68] DISCLOSURES TO PLAN SPONSOR.
4.10An auditing entity must provide a copy of the final report to the plan sponsor whose
4.11claims were included in the audit, and any recouped money shall be returned to the plan
4.12sponsor.
4.13 Sec. 9. [151.69] APPLICABILITY OF OTHER LAWS AND REGULATIONS.
4.14Sections 151.60 to 151.68 do not apply to any investigative audit that involves
4.15fraud, willful misrepresentation, or abuse, or any audit completed by Minnesota health
4.16care programs.
