ENROLLED
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ACT No. 502
Regular Session, 2014
HOUSE BILL NO. 62
BY REPRESENTATIVES PUGH AND BARROW
AN ACT1
To amend and reenact R.S. 22:1856.1(A), (B)(introductory paragraph) and (3)(a), (C)(3),2
(D), and (E) and to enact R.S. 22:1856.1(B)(10) and (11), relative to pharmacy3
record audits; to provide for standards and requirements concerning pharmacy record4
audit procedures; to provide for conditions under which recoupment of certain5
reimbursements to pharmacies may occur; to make technical changes; and to provide6
for related matters.7
Be it enacted by the Legislature of Louisiana:8
Section 1. R.S. 22:1856.1(A), (B)(introductory paragraph) and (3)(a), (C)(3), (D),9
and (E) are hereby amended and reenacted and R.S. 22:1856.1(B)(10) and (11) are hereby10
enacted to read as follows: 11
ยง1856.1. Pharmacy record audits; recoupment; appeals12
A. As used in this Section, "entity" means a managed care company,13
insurance company, third-party payor, or the representative of the managed care14
company including a pharmacy benefit managers manager, insurance company, or15
third-party payor.16
B. Notwithstanding any other provision of law to the contrary, when an on-17
site onsite audit of the records of a pharmacy is conducted by an entity, the audit18
shall be conducted in accordance with the following criteria:19
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(3)(a) The entity conducting or any vendor or subcontractor of the entity21
which conducts the initial on-site onsite audit shall give the pharmacy notice at least22
two weeks before conducting the initial on-site onsite audit for each audit cycle.23
* * *24 ENROLLEDHB NO. 62
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(10) If the audit is conducted by a vendor or subcontractor of an entity, the1
vendor or subcontractor shall identify to the pharmacy the entity on whose behalf the2
audit is being conducted without necessity of this information being requested by the3
pharmacy.4
(11) The audit shall be based only on information obtained by the entity5
conducting the audit and not based on any audit report or other information gained6
from an audit conducted by a different auditing entity. Nothing in this Paragraph7
shall prohibit an auditing entity from using an earlier audit report prepared by that8
auditing entity for the same pharmacy. Except as required by state or federal law,9
an entity conducting an audit may have access to a pharmacy's previous audit report10
only if the previous report was prepared by that entity.11
C.12
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(3)(a) The full amount of any recoupment on an audit shall be refunded to14
the responsible party.15
(a) (b) Except as provided in this Subsection, a charge or assessment for an16
audit shall not be based, directly or indirectly, on amounts recouped.17
(b) (c) Nothing in this Subsection shall be construed to prevent the entity18
conducting the audit from charging or assessing the responsible party, directly or19
indirectly, based on amounts recouped if both of the following conditions are met:20
(i) The responsible party and the entity have a contract that explicitly states21
the percentage charge or assessment to the responsible party.22
(ii) A commission or other payment to an agent or employee of the entity23
conducting the audit is not based, directly or indirectly, on amounts recouped.24
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D.(1) No pharmacy shall be subject to recoupment of any portion of the26
reimbursement for the dispensed product of a prescription unless one or more of the27
following has occurred:28 ENROLLEDHB NO. 62
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(a) The pharmacy has engaged in fraudulent activity or other intentional and1
willful misrepresentation, as evidenced by a review of claims data or statements,2
physical review, or any other investigative method.3
(b) The pharmacy has engaged in dispensing in excess of the benefit design,4
as established by the plan sponsor.5
(c) The pharmacy has not filled prescriptions in accordance with the6
prescriber's order.7
(d) The pharmacy has received an actual overpayment.8
(2) Recoupment of claims shall be based on the actual financial harm to the9
entity or on the actual overpayment or underpayment. A finding of an overpayment10
that is the result of dispensing in excess of the benefit design, as established by the11
plan sponsor, shall be calculated as the difference between what was dispensed in12
accordance with the prescriber's orders and the dispensing requirements as set forth13
by the benefit design. Calculations of overpayments shall not include dispensing14
fees unless one or more of the following conditions is present has been satisfied:15
(1) (a) A prescription was not actually dispensed.16
(2) (b) The prescriber denied authorization.17
(3) (c) The prescription dispensed was a medication error by the pharmacy.18
(4) (d) The identified overpayment is based solely on an extra dispensing fee.19
(5) (e) The pharmacy was noncompliant with program guidelines.20
(6) (f) There was insufficient documentation.21
E.(1) Each entity conducting an audit shall establish an appeal process under22
which a pharmacy may appeal an unfavorable preliminary audit report to the entity.23
(1) (2) If, following an appeal, the entity finds that an unfavorable audit24
report or any portion of an unfavorable audit report is unsubstantiated, the entity25
shall dismiss the audit report or the unsubstantiated portion of the audit report26
without any further proceedings.27 ENROLLEDHB NO. 62
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(2) (3) No interest shall be charged to the entity during the appeal period.1
(3) (4) Following the final audit report, and if not otherwise provided for in2
the provider contract, either party may seek mediation to address outstanding3
disagreements.4
(4) (5) Notwithstanding any other provision of law to the contrary, the5
agency conducting the audit shall not use the accounting practice of extrapolation in6
calculating recoupment or penalties for audits, unless otherwise agreed to by the7
pharmacy or mandated by a government agency or in the case of fraud.8
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Section 2. This Act shall become effective upon signature by the governor or, if not10
signed by the governor, upon expiration of the time for bills to become law without signature11
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If12
vetoed by the governor and subsequently approved by the legislature, this Act shall become13
effective on the day following such approval.14
15
SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: