Pugh (HB 62) Act No. 502
Existing law establishes standards and requirements for audits of pharmacy records by an
"entity", defined for purposes of existing law as a managed care company or its
representative, an insurance company, or a third-party payor. Existing law further provides
for appeals and recoupment procedures related to such audits of pharmacy records.
Existing law requires an entity, as defined in existing law, which conducts an initial onsite
audit of a pharmacy to give the pharmacy notice at least two weeks before such audit for each
audit cycle. New law adds requirement that if a vendor or subcontractor conducts an initial
onsite audit of a pharmacy on behalf of an entity, the vendor or subcontractor is subject to
the same requirement for providing notice to the pharmacy as is the entity.
New law adds requirement for a vendor or subcontractor of an entity, if conducting a
pharmacy records audit on behalf of an entity, to identify to the pharmacy the entity on whose
behalf the audit is being conducted without necessity of this information being requested by
the pharmacy.
New law adds requirement that a pharmacy records audit be based only on information
obtained by the entity conducting the audit and not based on any audit report or other
information gained from an audit conducted by a different auditing entity. Provides that
nothing in new law shall prohibit an auditing entity from using an earlier audit report
prepared by that auditing entity for the same pharmacy. Further provides that except as
required by existing law or federal law, an entity conducting an audit may have access to a
pharmacy's previous audit report only if the previous report was prepared by that entity.
New law stipulates that no pharmacy shall be subject to recoupment of any portion of the
reimbursement for the dispensed product of a prescription unless one or more of the
following has occurred:
(1)The pharmacy has engaged in fraudulent activity or other intentional and willful
misrepresentation, as evidenced by a review of claims data or statements, physical
review, or any other investigative method.
(2)The pharmacy has engaged in dispensing in excess of the benefit design, as
established by the plan sponsor.
(3)The pharmacy has not filled prescriptions in accordance with the prescriber's order.
(4)The pharmacy has received an actual overpayment.
New law makes technical changes to existing law.
Effective upon signature of governor (June 5, 2014).
(Amends R.S. 22:1856.1(A), (B)(intro. para.) and (3)(a), (C)(3), (D), and (E); Adds R.S.
22:1856.1(B)(10) and (11))