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REFERENCE TITLE: insurance; pharmacy benefits; audits; pricing |
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State of Arizona House of Representatives Fifty-second Legislature Second Regular Session 2016
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HB 2692 |
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Introduced by Representative Livingston
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AN ACT
Amending title 20, Arizona Revised Statutes, by adding chapter 25; relating to pharmacy benefits.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 20, Arizona Revised Statutes, is amended by adding chapter 25, to read:
CHAPTER 25
PHARMACY BENEFITS
ARTICLE 1. AUDITING
20-3321. Definitions
In this article, unless the context otherwise requires:
1. "Auditing Entity" means any person, company, group or plan working on behalf of or pursuant to a contract with an insurer, plan sponsor or pharmacy benefits manager for the purposes of auditing pharmacy drug claims adjudicated by pharmacies or pharmacists.
2. "Clerical error" means a minor error that meets all of the following criteria:
(a) Occurs in the keeping, recording or transcribing of records or documents or in the handling of electronic or hard copies of correspondence.
(b) Does not result in financial harm to an entity.
(c) Does not involve dispensing an incorrect dose, amount or type of medication or dispensing a prescription drug to the wrong person.
3. "Concurrent daily review audit" means an audit that is conducted by an auditing entity, that is in direct response to the adjudication of a prescription order for the express purpose of therapeutic appropriateness and that may occur and is resolved only at the time the prescription order is adjudicated.
4. "Desktop audit" means an audit that is conducted by an auditing entity at a location other than the location of the pharmacist or pharmacy. Desktop audit includes an audit that is performed at the offices of the auditing entity during which the pharmacist or pharmacy provides requested documents for review by hard copy or by microfiche, disk or other electronic media.
5. "Fraud" means knowingly or wilfully executing or attempting to execute a scheme in connection with the delivery or payment for health care benefits, items or services that uses false or misleading pretenses, representations or promises to obtain any money or property owned by or under the custody or control of any person.
6. "In-pharmacy audit" means an audit that is conducted by an auditing entity at the physical business address of the pharmacy where the claim was adjudicated.
7. "Insurer" means a disability insurer, group disability insurer, blanket disability insurer, health care services organization, hospital service corporation, medical service corporation or hospital and medical service corporation.
8. "Multisource generic drug" means a covered outpatient prescription drug for which there is at least one other drug product that is rated as therapeutically equivalent under the United States food and drug administration's most recent publication of approved drug products with therapeutic equivalence evaluations, that is determined by the United States food and drug administration to be pharmaceutically equivalent and bioequivalent and that is sold or marketed in this state.
9. "Pharmacist" has the same meaning prescribed in section 32‑1901.
10. "Pharmacists services" means products, goods or services provided as a part of the practice of pharmacy to individuals who reside or who are employed in this state.
11. "Pharmacy" has the same meaning prescribed in section 32‑1901.
12. "Pharmacy benefits management" means any plan or program that pays for, reimburses, covers the cost of or otherwise provides for pharmacists services to individuals who reside or who are employed in this state.
13. "Pharmacy benefits manager" means an entity that performs pharmacy benefits management. Pharmacy benefits manager includes both of the following:
(a) A person or entity acting for a pharmacy benefits manager in a contractual or employment relationship in the performance of pharmacy benefits management for a covered entity.
(b) Mail service pharmacy.
14. "Plan sponsor" means the employer, insurance company, union and health maintenance organization or any other entity responsible for establishing, maintaining or administering a health benefit plan on behalf of covered individuals.
20-3322. Audit procedures
A. The following procedures apply to an audit conducted by an auditing entity:
1. When conducting an in-pharmacy or desktop audit, except in cases of an audit of pharmacy records when fraud or other intentional and wilful misrepresentation is evidenced by physical review, review of claims data or statements or other investigative methods, an auditing entity shall:
(a) give a pharmacy at least fourteen days' written notice via United States postal service, contracted mail services or e‑mail before conducting an in-pharmacy audit and at least seven days' written notice via United States postal service, contracted mail services or e-mail before conducting a desktop audit.
(b) Not conduct an audit during the first five days of the month unless the pharmacy otherwise consents.
(c) Provide the pharmacy a list of items to be audited that provides for identification of prescription number or numbers or date range that the auditing entity is seeking to audit.
(d) Limit the audit to claims that may not exceed two years from the earlier of the date that the claim was submitted to or the date that the claim was adjudicated by the pharmacy benefits manager.
2. An in‑pharmacy audit, desktop audit or concurrent daily review audit that involves clinical or professional judgment shall be conducted by or in consultation with a pharmacist licensed in the state of the audit or by the Arizona state board of pharmacy.
3. The pharmacy may use the records of a hospital, physician or other authorized practitioner to validate the pharmacy records. The validated records may be obtained via electronic methods, fax, phone or written prescription orders and do not have to be the original hard copy prescription order.
4. Any prescription that complies with Arizona state board of pharmacy requirements may be used to validate claims in connection with prescriptions, refills or changes in prescriptions.
5. Each pharmacy shall be audited under the same standards and parameters as other similarly situated pharmacies in this state.
B. When conducting an in‑pharmacy audit, desktop audit or concurrent daily review audit, An auditing entity shall comply with the following requirements:
1. The auditing entity shall base a finding of overpayment or underpayment on the actual overpayment or underpayment and not on a projection based on the number of patients served who have similar diagnoses or on the number of similar orders or refills for similar drugs.
2. Calculations of overpayments may not include dispensing fees.
3. Interest may not accrue during the audit period.
4. To the extent that an audit results in the identification of any clerical errors in a required document or record, the auditing entity may not recoup monies from the pharmacy.
20-3323. Audit reports
A. The auditing entity must deliver via United States postal service, contracted mail services or e-mail a preliminary audit report to the pharmacy within sixty days after the conclusion of the audit.
B. A pharmacy is allowed at least thirty days after receipt of the preliminary audit to provide documentation to address any discrepancy found in the audit.
C. Each auditing entity conducting an audit shall establish and make available to network pharmacies a written appeals process under which a pharmacy shall have at least thirty days from the delivery of the preliminary and final audit report to appeal an unfavorable audit report to the auditing entity. If, following the appeal, the auditing entity finds that an unfavorable audit report or any portion of the report is unsubstantiated, the auditing entity shall dismiss the audit report or portion of the report without the necessity of any further proceedings.
D. All contracts between a pharmacy benefits manager and a network pharmacy or a pharmacy benefits manager and a pharmacy's contracting representative shall include a process to appeal, investigate and resolve disputes regarding preliminary and final audit findings. If either party is not satisfied with the appeal, that party may seek mediation or arbitration through a neutral third party in the state in which the pharmacy is located.
E. The auditing entity must deliver via United States postal service, contracted mail services or e-mail a final audit report to the pharmacy within ninety days after receipt of the preliminary audit report or final appeal, whichever is later, and provide a copy of the final audit report, including the disclosure of any money recouped in the audit, to the insurer.
F. No chargebacks, recoupment or other penalties may be assessed until the appeal process has been exhausted and the final audit report has been issued.
G. Unless superseded by state or federal law, audit information may not be shared. Auditors may have access only to previous audit reports on a particular pharmacy conducted by that same auditing entity.
20-3324. Maximum allowable cost; updates; notice
A. Multisource generic drug pricing shall be updated every seven days and reimbursements shall reflect price changes in the marketplace.
B. A pharmacy benefits manager shall establish a reasonable process for the notification of drug price updates to the network pharmacies and shall disclose the drug price update in advance of using the updated drug prices for reimbursement.
C. The site or delivery method to convey generic pricing must enable the pharmacies to connect a claim to the correct drug price at the appropriate point in time in order to validate the price.
Sec. 2. Applicability
This act applies to contracts entered into, amended, extended or renewed on or after December 31, 2016.