No. SB 1256
Filed under Insurance.
Pharmacy Audits; Revising requirements for audits of licensed pharmacies conducted by or on behalf of pharmacy benefit plans or programs; revising audit procedures, documentation requirements, reporting and appeal requirements, and recoupment limits and procedures; authorizing the Office of Insurance Regulation to investigate complaints of violations, issue cease and desist orders, impose fines and other administrative penalties, order restitution for improper recoupments, prohibit any person or entity from conducting audits for a specified timeframe upon certain findings, and suspend or revoke a pharmacy benefit manager’s registration under certain circumstances, etc.
Plain English Summary
AI-GENERATEDAn auditor working for a pharmacy benefit plan may check no more than 0.1 percent of a pharmacy's prescriptions at random; auditing additional claims requires a documented, written suspicion of fraud, waste, or abuse first.
Outside of proven fraud or a drug the pharmacy never actually dispensed, an auditor can only recoup the dispensing fee, not the cost of the drug itself, and every dollar taken back must be handed over in full to the plan sponsor.
Independent pharmacies cannot be held to tougher standards than ones a pharmacy benefit manager owns outright, auditors can't earn more by recovering more, and pharmacies now get 30 days' written notice before an audit instead of seven.
The Office of Insurance Regulation gains real enforcement power: fines up to $100,000 per violation, restitution orders, a two-year audit ban for willful abuse of the fraud designation, and authority to suspend or revoke a pharmacy benefit manager's registration.
AIOutside of proven willful fraud or a drug the pharmacy never dispensed, an auditor may only take back the dispensing fee, leaving the cost of the drug itself off-limits.
AIA pharmacy benefit manager cannot retain money it recoups from a pharmacy; the full recouped amount must be passed on to whoever sponsors the benefit plan.
AIAn auditor may randomly examine no more than one-tenth of one percent of a pharmacy's prescriptions per audit; going beyond that requires a documented, written suspicion of fraud, waste, or abuse.
AIClaims must be chosen for audit at random rather than by drug class, cost, or therapeutic category, unless the auditor documents a reasonable suspicion of fraud, waste, or abuse in writing.
AIAn auditor cannot hold nonaffiliated pharmacies to stricter methods, tighter error thresholds, heavier paperwork, or more frequent review than it applies to pharmacies the benefit manager itself owns or is affiliated with.
AIWhoever performs the audit cannot be compensated according to how much it recovers, taking away any financial incentive to inflate recoupments.
AIThe Office of Insurance Regulation can fine an auditor as much as $100,000 per violation for abusing the fraud designation, and can suspend or revoke a pharmacy benefit manager's registration for repeated or willful violations.
AIAn auditor cannot slap a fraud, waste, or abuse label on an audit just to escape this section's limits unless that audit actually meets the separate evidence and notice rules that apply to fraud audits.