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Chapter 355
(House Bill 374)
AN ACT concerning
Health Insurance – Pharmacy Benefits Managers – Audits of Pharmacies and
Pharmacists
FOR the purpose of expanding the applicability of the provisions regarding audits of a
pharmacy or pharmacist to all pharmacy benefits managers; authorizing a pharmacy
benefits manager to conduct an audit through an auditing entity that is registered
with the Maryland Insurance Commissioner; requiring the Secretary of Health to
adopt certain regulations for pharmacy benefits managers that contract with
managed care organizations that establish requirements for conducting audits of
pharmacies or pharmacists; establishing requirements and prohibitions regarding
audits by certain pharmacy benefits managers, including provisions related to audit
limits, the acceptance of certain documents as validation or proof, the recoupment of
funds or charging and payment of fees for prescriptions of unbreakable package
sizes, access to financial documentation, and audit documentation; requiring that a
final audit report include certain information if applicable; authorizing a pharmacy
or pharmacist to confirm with a pharmacy customer or purchaser that the pharmacy
customer or purchaser received a certain refund; and generally relating to audits by
pharmacy benefits managers.
BY adding to
Article – Health – General
Section 15–102.3(k) 15–103(b)(33)
Annotated Code of Maryland
(2019 Replacement Volume and 2022 Supplement)
BY repealing and reenacting, with amendments,
Article – Insurance
Section 15–1629
Annotated Code of Maryland
(2017 Replacement Volume and 2022 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Health – General
15–102.3.
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(K) THE PROVISIONS OF § 15–1629 OF THE INSURANCE ARTICLE APPLY TO
PHARMACY BENEFITS MA NAGERS THAT CONTRACT WITH MANAGED CARE
ORGANIZATIONS .
15–103.
(b) (33) THE SECRETARY SHALL ADOPT REGULATIONS FOR PHAR MACY
BENEFITS MANAGERS TH AT CONTRACT WITH MAN AGED CARE ORGANIZATI ONS THAT
ESTABLISH REQUIREMEN TS FOR CONDUCTING AU DITS OF PHARMACIES O R
PHARMACISTS THAT ARE :
(I) TO THE EXTENT PRACTIC ABLE, SUBSTANTIVELY SIMILAR
TO THE AUDIT PROVISI ONS UNDER § 15–1629 OF THE INSURANCE ARTICLE; AND
(II) CONSISTENT WITH FEDER AL LAW.
Article – Insurance
15–1629.
[(a) This section applies only to a pharmacy benefits manager that provides
pharmacy benefits management services on behalf of a carrier.]
[(b)] (A) This section does not apply to an audit that involves probable or
potential fraud or willful misrepresentation by a pharmacy or pharmacist.
[(c)] (B) A pharmacy benefits manager shall conduct an audit of a pharmacy or
pharmacist under contract with the pharmacy benefits manager in accordance with this
section.
(C) (D) (1) A PHARMACY BENEFITS MA NAGER MAY CONDUCT AN AUDIT
THROUGH AN AUDITING ENTITY.
(2) AN AUDITING ENTITY MU ST REGISTER WITH THE COMMISSIONER
AS AN AUDITING ENTIT Y BEFORE CONDUCTING AN AUDIT IN THE STATE.
(3) (2) THE COMMISSIONER MAY ADOP T REGULATIONS TO CAR RY
OUT THIS SUBSECTION .
(d) (E) A pharmacy benefits manager may not schedule an onsite audit to begin
during the first 5 calendar days of a month unless requested by the pharmacy or
pharmacist.
(e) (F) When conducting an audit, a pharmacy benefits manager shall: WES MOORE, Governor Ch. 355
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(1) if the audit is onsite, provide written notice to the pharmacy or
pharmacist at least 2 weeks before conducting the initial onsite audit for each audit cycle;
(2) employ the services of a pharmacist if the audit requires the clinical or
professional judgment of a pharmacist;
(3) [permit] ALLOW its auditors to enter the prescription area of a
pharmacy only when accompanied by or authorized by a member of the pharmacy staff;
(4) allow a pharmacist or pharmacy to use any prescription, or authorized
change to a prescription, that meets the requirements of COMAR 10.34.20.02 to validate
claims submitted for reimbursement for dispensing of original and refill prescriptions;
(5) for purposes of validating the pharmacy record with respect to orders
or refills of a drug, allow the pharmacy or pharmacist to use records of a hospital or a
physician or other prescriber authorized by law that are:
(i) written; or
(ii) transmitted electronically or by any other means of
communication authorized by contract between the pharmacy and the pharmacy benefits
manager;
(6) FOR PURPOSES OF AN I NVOICE AUDIT, ACCEPT AS VALIDATION
INVOICES ISSUED BEFO RE THE DATE OF DISPE NSING FROM:
(I) A WHOLESALE DISTRIBU TOR:
1. THAT HAS BEEN ISSUED A PERMIT BY THE STATE
BOARD OF PHARMACY UNDER TITLE 12, SUBTITLE 6C OF THE HEALTH
OCCUPATIONS ARTICLE; AND
2. FROM WHICH THE PHARM ACY OR PHARMACIST HA S
PURCHASED PRESCRIPTI ON DRUGS; OR
(II) FOR INVOICES FOR DUR ABLE MEDICAL EQUIPME NT OR
SICKROOM SUPPLIES , A DISTRIBUTOR THAT H AS THE APPROPRIATE
AUTHORIZATIO N TO DO BUSINESS IN THE STATE;
(7) (6) ALLOW ACCEPT A COMPLETED CASH REGISTER
TRANSACTION TO SERVE AS PROOF OF DE LIVERY OR PICKUP FOR A PHARMACY
CUSTOMER UNLESS THERE IS CONT RADICTORY INFORMATIO N;
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[(6)] (8) (7) audit each pharmacy and pharmacist under the same standards
and parameters as other similarly situated pharmacies or pharmacists audited by the
pharmacy benefits manager;
[(7)] (9) (8) only audit claims submitted or adjudicated within the 2–year
period immediately preceding the audit, unless a longer period is authorized under federal
or State law;
[(8)] (10) (9) deliver the preliminary audit report to the pharmacy or
pharmacist within 120 calendar days after the completion of the audit, with reasonable
extensions allowed;
[(9)] (11) (10) in accordance with subsection [(k)] (M) (L) (M) of this
section, allow a pharmacy or pharmacist to produce documentation to address any
discrepancy found during the audit; and
[(10)] (12) (11) deliver the final audit report to the pharmacy or
pharmacist:
(i) within 6 months after delivery of the preliminary audit report if
the pharmacy or pharmacist does not request an internal appeal under subsection [(k)] (M)
(L) (M) of this section; or
(ii) within 30 days after the conclusion of the internal appeals
process under subsection [(k)] (M) (L) (M) of this section if the pharmacy or pharmacist
requests an internal appeal.
(f) (G) If a contract between a pharmacy or pharmacist and a pharmacy
benefits manager specifies a period of time in which a pharmacy or pharmacist is allowed
to withdraw and resubmit a claim and that period of time expires before the pharmacy
benefits manager delivers a preliminary audit report that identifies discrepancies, the
pharmacy benefits manager shall allow the pharmacy or pharmacist to withdraw and
resubmit a claim within 30 days after:
(1) the preliminary audit report is delivered if the pharmacy or pharmacist
does not request an internal appeal under subsection [(k)] (M) (L) (M) of this section; or
(2) the conclusion of the internal appeals process under subsection [(k)]
(M) (L) (M) of this section if the pharmacy or pharmacist requests an internal appeal.
(g) (H) During an audit, a pharmacy benefits manager may not disrupt the
provision of services to the customers of a pharmacy.
(h) (I) (1) A pharmacy benefits manager may not:
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(i) use the accounting practice of extrapolation to calculate
overpayments or underpayments; [or]
(ii) [Except] EXCEPT as provided in paragraph (2) of this subsection:
1. share information from an audit with another pharmacy
benefits manager; or
2. use information from an audit conducted by another
pharmacy benefits manager;
(III) CHARGE A PHARMACY OR PHARMACIST A FEE UNL ESS AN
AUDIT FINDS THERE WA S A FINANCIAL DETRIM ENT TO THE PHARMACY CUSTOMER
OR PURCHASER ;
(IV) CHARGE A PHARMACY OR PHARMACIST A FEE WIT H REGARD
TO AN INCORRECT DAYS OF SUPPLY CALCULATIO N IF THE PHARMACY BE NEFITS
MANAGER IS UNABLE T O ACCEPT THE CORRECT DAYS OF SUPPLY WITHO UT HELP
DESK INTERVENTION ;
(III) RECOUP ANY FUNDS FRO M OR CHARGE ANY FEES TO A
PHARMACY OR PHARMACI ST FOR A PRESCRIPTIO N WITH REGARD TO AN INCORRECT
DAYS OF SUPPLY CALCU LATION IF THE PACKAG E SIZE OF THE MEDICATION IS
UNBREAKABLE AND THE PHARMACY BENEFITS MA NAGER CANNOT ACCEPT THE
CORRECT MATHEMATICAL LY CALCULABLE DAYS ’ SUPPLY DURING PRESCR IPTION
ADJUDICATION ;
(V) (IV) HAVE OR REQUEST ACCE SS TO A PHARMACY ’S OR
PHARMACIST ’S BANK, CREDIT CARD, OR DEPOSITORY STATEMENTS OR D ATA AS IT
RELATES TO COST –SHARING; OR
(VI) (V) AUDIT CLAIMS THAT WE RE REVERSED OR FOR W HICH
THERE WAS NO REMUNER ATION BY THE PURCHAS ER OR COST TO THE PH ARMACY
CUSTOMER EXCEPT IF NECESSARY TO EVALUATE COMPLIAN CE TO A CONTRACT .
(2) Paragraph (1)(ii) of this subsection does not apply to the sharing of
information:
(i) required by federal or State law;
(ii) in connection with an acquisition or merger involving the
pharmacy benefits manager; or
(iii) at the payor’s request or under the terms of the agreement
between the pharmacy benefits manager and the payor. Ch. 355 2023 LAWS OF MARYLAND
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(3) FOR CLAIMS THAT WERE AUDITED IN VIOLATION OF PARAGRAPH
(1)(VI) OF THIS SUBSECTION , THE PHARMACY BENEFIT S MANAGER OR PURCHAS ER
SHALL PAY THE PHARMA CY OR PHARMACIST $20 PER CLAIM FOUND TO B E IN
VIOLATION.
(I) (J) (1) A PHARMACY BENEFITS MA NAGER OR PURCHASER M AY NOT
AUDIT MORE THAN 50 125 PRESCRIPTIONS DURING A DESK OR SITE AUDIT UNLESS
THE PHARMACY BENEFITS MA NAGER OR PURCHASER R EQUESTING THE AUDIT PAYS
THE PHARMACY OR PHARMACI ST $20 PER ADDITIONAL PRESC RIPTION OR PROOF
OF DELIVERY OR PICKUP R EQUEST.
(2) THE FEE REQUIRED UNDE R PARAGRAPH (1) OF THIS SUBSECTION
IS IN ADDITION TO TH E FEE REQUIRED UNDER SUBSECTION (J)(1) OF THIS SECTION.
(J) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , A PHARMACY
BENEFITS MANAGER OR PURCHASER SHALL PAY A PHARMACY OR PHARMA CIST $250
PER HOUR OF AUDIT OR $10 PER PRESCRIPTION AUD ITED, WHICHEVER IS GREATER .
(2) THE FEE REQUIRED UNDE R THIS SUBSECTION SH ALL BE
ADJUSTED ON JULY 1 EACH YEAR FOR INFLAT ION IN ACCORDANCE WI TH THE
CONSUMER PRICE INDEX.
[(i)] (K) (J) (K) The recoupment of a claims payment from a pharmacy or
pharmacist by a pharmacy benefits manager shall be based on an actual overpayment or
denial of an audited claim unless the projected overpayment or denial is part of a settlement
agreed to by the pharmacy or pharmacist.
[(j)] (L) (K) (L) (1) In this subsection, “overpayment” means a payment by the
pharmacy benefits manager to a pharmacy or pharmacist that is greater than the rate or
terms specified in the contract between the pharmacy or pharmacist and the pharmacy
benefits manager at the time that the payment is made.
(2) A clerical error, record–keeping error, typographical error, or
scrivener’s error in a required document or record may not constitute fraud or grounds for
recoupment of a claims payment from a pharmacy or pharmacist by a pharmacy benefits
manager if the prescription was otherwise legally dispensed and the claim was otherwise
materially correct.
(3) Notwithstanding paragraph (2) of this subsection, claims remain
subject to recoupment of overpayment or payment of any discovered underpayment by the
pharmacy benefits manager.
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[(k)] (M) (L) (M) (1) A pharmacy benefits manager shall establish an internal
appeals process under which a pharmacy or pharmacist may appeal any disputed claim in
a preliminary audit report.
(2) Under the internal appeals process, a pharmacy benefits manager shall
allow a pharmacy or pharmacist to request an internal appeal within 30 working days after
receipt of the preliminary audit report, with reasonable extensions allowed.
(3) The pharmacy benefits manager shall include in its preliminary audit
report a written explanation of the internal appeals process, including the name, address,
and telephone number of the person to whom an internal appeal should be addressed.
(4) The decision of the pharmacy benefits manager on an appeal of a
disputed claim in a preliminary audit report by a pharmacy or pharmacist shall be reflected
in the final audit report.
(5) The pharmacy benefits manager shall deliver the final audit report to
the pharmacy or pharmacist within 30 calendar days after conclusion of the internal
appeals process.
[(l)] (N) (M) (N) (1) A pharmacy benefits manager may not recoup by setoff
any money for an overpayment or denial of a claim until:
(i) the pharmacy or pharmacist has an opportunity to review the
pharmacy benefits manager’s findings; and
(ii) if the pharmacy or pharmacist concurs with the pharmacy
benefits manager’s findings of overpayment or denial, 30 working days have elapsed after
the date the final audit report has been delivered to the pharmacy or pharmacist.
(2) If the pharmacy or pharmacist does not concur with the pharmacy
benefits manager’s findings of overpayment or denial, the pharmacy benefits manager may
not recoup by setoff any money pending the outcome of an appeal under subsection [(k)]
(M) (L) (M) of this section.
(3) A pharmacy benefits manager shall remit any money due to a pharmacy
or pharmacist as a result of an underpayment of a claim within 30 working days after the
final audit report has been delivered to the pharmacy or pharmacist.
(4) Notwithstanding the provisions of paragraph (1) of this subsection, a
pharmacy benefits manager may withhold future payments before the date the final audit
report has been delivered to the pharmacy or pharmacist if the identified discrepancy for
all disputed claims in a preliminary audit report for an individual audit exceeds $25,000.
(O) THE FINAL AUDIT REPOR T SHALL, IF APPLICABLE:
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(1) IDENTIFY EACH PHARMA CY CUSTOMER OR PURCH ASER
RECEIVING A REFUND ; AND
(2) SPECIFY THE AMOUNT B EING REFUNDED TO EAC H PHARMACY
CUSTOMER OR PURCHASE R.
(P) A PHARMACY OR PHARMACI ST MAY CONFIRM WITH THE PHARMACY
CUSTOMER OR PURCHASE R THAT THE PHARMACY CUSTOMER OR PURCHASE R
RECEIVED THE REFUND AMOUNT FROM THE PHAR MACY BENEFITS MANAGE R.
(Q) (N) (O) (1) A PHARMACY BENEFITS MA NAGER SHALL PROVIDE A
PHARMACY OR PHARMACI ST BEING AUDITED WIT H A PHONE NUMBER AND, IF
AVAILABLE, ACCESS TO A SECURE P ORTAL THAT THE PHARMACY OR PHARMACIST
MAY USE TO ASK QUEST IONS REGARDING THE A UDIT.
(2) AN INDIVIDUAL WHO IS FAMILIAR WITH THE AUDIT SHALL
RESPOND TO ALL TELEPHONE INQUIRIES MADE THROUGH A PHONE NUMBER OR
SECURE PORTAL PROVID ED UNDER PARAGRAPH (1) OF THIS SUBSECTION WITHIN
72 HOURS 3 BUSINESS DAYS AFTER THE CALL INQUIRY WAS MADE.
(R) (O) (P) (1) THE PHARMACY BENEFITS MANAGER SHA LL GIVE THE
PHARMACY OR PHARMACI ST THE OPTION TO PRO VIDE REQUESTED AUDIT
DOCUMENTATION BY POS TAL MAIL, E–MAIL, OR FACSIMILE.
(2) IF A DOCUMENT IS REQU ESTED REGARDING AN A UDIT, THE
PHARMACY BENEFITS MA NAGER SHALL PROVIDE A SECURE FACS IMILE NUMBER
AND A MECHANISM FOR RECEIVING SECURE E –MAILS.
(3) ON OR BEFORE OCTOBER 1, 2025, A PHARMACY BENEFITS
MANAGER SHALL PROVID E A MECHANISM FOR SE CURE ELECTRONIC
COMMUNICATION FOR PH ARMACIES AND PHARMAC ISTS TO COMMUNICATE WITH
AND SUBMIT DOCUMEN TS TO THE AUDITING E NTITY.
[(m)] (S) (P) (Q) (1) The Commissioner may adopt regulations regarding:
(i) the documentation that may be requested during an audit; and
(ii) the process a pharmacy benefits manager may use to conduct an
audit.
(2) On request of the Commissioner or the Commissioner’s designee, a
pharmacy benefits manager shall provide a copy of its audit procedures or internal appeals
process.
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SECTION 2. AND BE IT FURTHER ENACTED, That:
(a) Except as provided in subsection (b) of this section, for an audit of a pharmacy
or pharmacist under contract with a pharmacy benefits manager, this Act shall apply only
to an audit performed on or after January 1, 2024.
(b) For a pharmacy benefits manager that contracts with the State or a local
government, this Act shall apply only to audits that occur on the first day of the first plan
year beginning on or after January 1, 2024, or the first time a contract between a pharmacy
benefits manager with the State or a local government is amended or renewed on or after
January 1, 2024.
SECTION 2. 3. AND BE IT FURTHER ENACTED, That this Act shall take effect
October 1, 2023 January 1, 2024.
Approved by the Governor, May 3, 2023.