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words in boldface type and underscored are additions.
Regular Session, 2012 ENROLLED
SENATE BILL NO. 756 (Substitute of Senate Bill No. 373 by Senator Mills)
BY SENATOR MILLS AND REPRESENTATIVE WESLEY BISHOP
AN ACT1
To enact R.S. 22:1856.1, relative to the audit of pharmacy records by certain entities2
including pharmacy benefit managers; to provide for definitions; to provide with3
respect to an appeals process; and to provide for related matters.4
Be it enacted by the Legislature of Louisiana:5
Section 1. R.S. 22:1856.1 is hereby enacted to read as follows: 6
ยง1856.1. Pharmacy record audits; appeals7
A. As used in this Section, "entity" means a managed care company,8
insurance company, third-party payor, or the representative of the managed9
care company including pharmacy benefit managers, insurance company, or10
third-party payor.11
B. Notwithstanding any other provision of law to the contrary, when an12
on-site audit of the records of a pharmacy is conducted by an entity, the audit13
shall be conducted in accordance with the following criteria:14
(1) The audit may not take place during the first five days of the month.15
(2) No entity shall conduct an on-site audit at a particular pharmacy16
more than one time annually. However, the provisions of this Paragraph shall17
not apply when an entity must return to a pharmacy to complete an audit18
already in progress, or there is an identified history of errors, an identified19
activity which a reasonable man would believe to be inappropriate, or illegal20
activity that the entity has brought to the attention of the pharmacy owner or21
corporate headquarters of the pharmacy.22
(3)(a) The entity conducting the initial on-site audit shall give the23
pharmacy notice at least two weeks before conducting the initial on-site audit24
for each audit cycle.25
(b) If the audit, review, or investigation is initiated based on or involves26
alleged fraud or willful misrepresentation, notice before the initial on-site audit27
ACT No. 856 SB NO. 756 ENROLLED
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is not mandatory where it could impede the audit, review, or investigation.1
(4)(a)(i) Any clerical or record-keeping error, such as a typographical2
error, scrivener's error, or computer error, regarding a required document or3
record shall not necessarily constitute fraud.4
(ii) A claim arising pursuant to the provisions of this Section may be5
subject to recoupment.6
(b) No claim arising pursuant to the provisions of this Section shall be7
subject to criminal penalties without proof of intent to commit fraud.8
(5) A pharmacy may provide the records of a hospital, physician, or9
other authorized practitioner of the healing arts for drugs or medicinal supplies10
written or transmitted by any means of communication for purposes of11
supporting the pharmacy record with respect to orders or refills of a legend or12
narcotic drug.13
(6) Each pharmacy shall be audited under the same standards and14
parameters as other similarly situated pharmacies audited by the entity.15
(7)(a) The preliminary audit report shall be delivered to the pharmacy16
within ninety days after conclusion of the audit.17
(b) A pharmacy shall be allowed at least thirty days following receipt of18
the preliminary audit report in which to initiate an appeal to address any19
discrepancy found during an on-site audit, as provided in Subsection E of this20
Section.21
(c) A final audit report shall be delivered to the pharmacy within one22
hundred twenty days after receipt of the preliminary audit report or notice of23
appeal, whichever is later.24
(d) Each entity conducting an audit shall make available a copy of the25
final audit report to the plan sponsor upon request or as otherwise required by26
contractual agreement.27
(8) Any audit which involves clinical judgment shall be conducted by or28
in consultation with a licensed pharmacist.29
(9) Interest on recoupment debts shall not accrue during the audit or30 SB NO. 756 ENROLLED
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appeal period.1
C.(1) Recoupment of any disputed funds, or repayment of funds to the2
entity by the pharmacy if permitted pursuant to contractual agreement, shall3
occur after final disposition of the audit, including the appeals process.4
Recoupment shall not be based on documentation requirements in addition to5
or exceeding requirements for creating or maintaining documentation6
prescribed by the Louisiana Board of Pharmacy; or on a requirement that a7
pharmacy or pharmacist perform a professional duty in addition to or8
exceeding professional duties prescribed by the Louisiana Board of Pharmacy.9
(2) The provisions of this Section shall not apply in cases of United States10
Food and Drug Administration regulation or manufacturer safety programs.11
(3) The full amount of any recoupment on an audit shall be refunded to12
the responsible party.13
(a) Except as provided in this Subsection, a charge or assessment for an14
audit shall not be based, directly or indirectly, on amounts recouped.15
(b) Nothing in this Subsection shall be construed to prevent the entity16
conducting the audit from charging or assessing the responsible party, directly17
or indirectly, based on amounts recouped if both the following conditions are18
met:19
(i) The responsible party and the entity have a contract that explicitly20
states the percentage charge or assessment to the responsible party.21
(ii) A commission or other payment to an agent or employee of the entity22
conducting the audit is not based, directly or indirectly, on amounts recouped.23
(4) Before recoupment of funds may be made based on an audit finding24
overpayment or underpayment, a final audit report shall be distributed.25
D. Recoupment of claims shall be based on the actual financial harm to26
the entity or on the actual overpayment or underpayment. A finding of an27
overpayment that is the result of dispensing in excess of the benefit design, as28
established by the plan sponsor, shall be calculated as the difference between29
what was dispensed in accordance with the prescriber's orders and the30 SB NO. 756 ENROLLED
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words in boldface type and underscored are additions.
dispensing requirements as set forth by the benefit design. Calculations of1
overpayments shall not include dispensing fees unless one of the following2
conditions is present:3
(1) A prescription was not actually dispensed.4
(2) The prescriber denied authorization.5
(3) The prescription dispensed was a medication error by the pharmacy.6
(4) The identified overpayment is based solely on an extra dispensing fee.7
(5) The pharmacy was noncompliant with program guidelines.8
(6) There was insufficient documentation.9
E. Each entity conducting an audit shall establish an appeal process10
under which a pharmacy may appeal an unfavorable preliminary audit report11
to the entity.12
(1) If, following an appeal, the entity finds that an unfavorable audit13
report or any portion of an unfavorable audit report is unsubstantiated, the14
entity shall dismiss the audit report or the unsubstantiated portion of the audit15
report without any further proceedings.16
(2) No interest shall be charged to the entity during the appeal period.17
(3) Following the final audit report, and if not otherwise provided for in18
the provider contract, either party may seek mediation to address outstanding19
disagreements.20
(4) Notwithstanding any other provision of law to the contrary, the21
agency conducting the audit shall not use the accounting practice of22
extrapolation in calculating recoupment or penalties for audits, unless otherwise23
agreed to by the pharmacy or mandated by a government agency or in the case24
of fraud.25
F. Unless otherwise provided for in the network agreement, pharmacies26
or payors may seek mediation to resolve contractual disputes related to pricing27
or on-site audits.
28
G. This Section shall not apply to:29
(1) Any quality assurance review, as defined by the time period prior to30 SB NO. 756 ENROLLED
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the reimbursement by the entity to the pharmacy.1
(2) An investigation that is initiated based on or that involves suspected2
or alleged fraud, willful misrepresentation, or abuse.3
(3) Any federally funded activity specifically preempted by law or rule.4
(4) Any audit conducted pursuant to the participation of a pharmacy in5
the Louisiana Medicaid Program.6
Section 2. The provisions of this Act shall apply to contracts entered into, amended,7
extended, or renewed on or after January 1, 2013.8
PRESIDENT OF THE SENATE
SPEAKER OF THE HOUSE OF REPRESENTATIVES
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: