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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
HOUSE BILL 2677 By: Marti of the House
and
McCortney of the Senate
AS INTRODUCED
An Act relating to professions and occupations ;
amending 59 O.S. 2011, Section 356.2, which relates
to the Pharmacy Audit Integrity Act ; modifying and
expanding duties; prohibiting certain audits;
providing for discrepancies; requiring acceptance of
certain evidence; requiring provision of certain
documents within specified time; providing audit
requirements; modifying number of prescriptions to be
audited; requiring invoices; modifying audit report
time periods; eliminating certain withholdings;
amending 59 O.S. 2011, Section 356.3, which relates
to appeals process; clarifying when certain findings
are to be referred to the district attorney;
clarifying scope of application; amending Section 3,
Chapter 263, O.S.L. 2014 (59 O.S. Supp. 2020 , Section
359), which relates to information to be provided by
pharmacy benefits manager; removing exceptions;
amending Section 4, Chapter 263, O.S.L. 2014, as
amended by Section 8, Chapter 285, O.S.L. 2016 (59
O.S. Supp. 2020, Section 360), which relates to
contractual duties to providers; modifying
reimbursement proced ure; prohibiting placement of
drugs on certain list, with exceptions; modifying
accreditation or licensing requirement; allowing
certain entities to decline to provide services;
requiring provision of certain information; and
declaring an emergency .
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BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 59 O.S. 2011, Section 356.2, is
amended to read as follows:
Section 356.2 A. The entity conducting an audit of a pharmacy
shall:
1. Identify and specifically describe the audit and appeal
procedures in the pharmacy contract. Unless otherwise agreed to in
contract by both parties, prescription Prescription claim
documentation and record -keeping requirements shall not exceed the
requirements set forth by the Oklahoma Pharmacy Act or other
applicable state or federal laws or regulations;
2. For an on-site audit, give Give the pharmacy written notice
by certified letter to the pharmacy and the pharmacy's contracting
agent, including identification of specific prescription numbers and
fill dates to be audited, at least two (2) weeks prior to conducting
the on-site audit, including, but not limited to, an on -site audit,
a desk audit, or a wholesale purchase audit, request for
documentation related to the di spensing of a prescription drug or
any reimbursed activity by a pharmacy provider ; provided, however,
that wholesale purchase audits shall require a minimum of thirty
(30) days written notice . The pharmacy shall have the opportunity
to reschedule the audi t no more than seven (7) days from the date
designated on the original audit notification;
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3. For an on-site audit, not Not interfere with the delivery of
pharmacist services to a patient and shall utilize every reasonable
effort to minimize inconvenience and disruption to pharmacy
operations during the audit process;
4. Conduct any audit involving clinical or professional
judgment by means of or in consultation with a licensed pharmacist;
5. Not consider as fraud any clerical or record -keeping error,
such as a typographical error, scrivener's error , or computer error
regarding a required document or record; however, including, but not
limited to, a miscalculated day supply , incorrectly billed
prescription written date or prescription origin code, and such
errors may shall not be subject to recoupment. The pharmacy shall
have the right to submit amended claims electronically to correct
clerical or record-keeping errors in lieu of recoupment , provided
that the prescription was dispensed according to prescr iption
documentation requirements set forth by the Oklahoma Pharmacy Act .
To the extent that an audit results in the identification of any
clerical or record-keeping errors such as typographical errors,
scrivener's errors or computer errors in a required document or
record, the pharmacy shall not be subject to recoupment of funds by
the pharmacy benefits manager unless the pharmacy benefits manager
can provide proof of intent to commit fraud or such error results in
actual financial harm to the pharmacy benefits manager, a health
insurance plan managed by the pharmacy benefits manager or a
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consumer. A person shall not be subject to criminal penalties for
errors provided for in this paragraph without proof of intent to
commit fraud;
6. Permit a pharmacy to use the records of a hospital,
physician, or other authorized practitioner of the healing arts for
drugs or medicinal supplies written or transmitted by any means of
communication for purposes of validating the pharmacy record with
respect to orders or re fills of a legend or narcotic drug;
7. Base a finding of an overpayment or underpayment on a
projection based on the number of patients served having similar
diagnoses or on the number of similar orders or refills for similar
drugs; provided, recoupment o f claims shall be based on the actual
overpayment or underpayment of each identified claim. A projection
for overpayment or underpayment may be used to determine recoupment
as part of a settlement as agreed to by the pharmacy;
8. Not include the dispensi ng fee amount or the actual invoice
cost of the prescription dispensed in a finding of an overpayment
audit recoupment unless a prescription was not actually dispensed or
a physician denied authorization or as otherwise agreed to by
contract of a dispensing order;
9. 8. Audit each pharmacy under the same identical standards,
regularity and parameters as other similarly situated pharmacies
audited by the entity and all pharmacies owned or managed by the
pharmacy benefits manager conducting or having conduct ed the audit;
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10. 9. Not exceed two (2) years one (1) year from the date the
claim was submitted to or adjudicated by a managed care company,
nonprofit hospital or medical service organization, insurance
company, third-party payor, pharmacy benefits manag er, a health
program administered by a department of this state, or any entity
that represents the companies, groups, or departments for the period
covered by an audit;
11. 10. Not schedule or initiate an audit during the first
seven (7) calendar days of any month due to the high volume of
prescriptions filled in the pharmacy during that time unless
otherwise consented to by the pharmacy; and
12. 11. Disclose to any plan sponsor whose claims were included
in the audit any money recouped in the audit ; and
12. Not require pharmacists to break open packaging labeled
"for single-patient-use only". Packaging labeled "for single -
patient-use only" shall be deemed to be the smallest package size
available.
B. 1. Any entity that conducts wholesale purchase review
during an audit of a pharmacist or pharmacy shall not require the
pharmacist or pharmacy to provide a full dispensing report.
Wholesaler invoice reviews shall be limited to verification of
purchase inventory specific to the pharmacy claims paid by the
health benefits plan or pharmacy benefits manager conducting the
audit.
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2. Any entity conducting an audit shall not identify or label a
prescription claim as an audit discrepancy when:
a. the National Drug Code for the dispensed drug is in a
quantity that is a subunit or multiple of the drug
purchased by the pharmacist or pharmacy as supported
by a wholesale invoice,
b. the pharmacist or pharmacy dispensed the correct
quantity of the drug according to the prescription,
and
c. the drug dispensed by the phar macist or pharmacy
shares all but the last two digits of the National
Drug Code of the drug reflected on the supplier
invoice.
3. An entity conducting an audit shall accept as evidence,
subject to validation, to support the validity of a pharmacy claim
related to a dispensed drug:
a. redacted copies of supplier invoices in the
pharmacist's or pharmacy's possession, or
b. invoices and any supporting documents from any
supplier as authorized by federal or state law to
transfer ownership of the drug acquired by the
pharmacist or pharmacy.
4. An entity conducting an audit shall provide, no later than
five (5) business days after the date of a request by the pharmacist
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or pharmacy, all supporting documents the pharmacist's or pharmacy's
purchase suppliers provided to the health benefits plan issuer or
pharmacy benefits manager.
C. A pharmacy may shall be allowed to provide the pharmacy's
computerized patterned medical records or the records of a hospital,
physician, or other authorized practitioner of the heali ng arts for
drugs or medicinal supplies written or transmitted by any means of
communication for purposes of supporting the pharmacy record with
respect to orders or refills of a legend or narcotic drug.
C. D. The entity conducting the audit shall not a udit more than
seventy-five (75) fifty (50) prescriptions, with specific date of
service, per initial audit calendar year. The annual limit to the
number of prescription claims audited shall be inclusive of all
audits, including any prescription-related documentation requests
from the health insurer, pharmacy benefits manager or any third -
party company conducting audits on behalf of any health insurer or
pharmacy benefits manager during a calendar year .
D. E. If paper copies of records are requested by th e entity
conducting the audit, the entity shall pay twenty -five cents ($0.25)
per page to cover the costs incurred by the pharmacy. The entity
conducting the audit shall provide the pharmacy with accurate
instructions, including any required form for obtaining
reimbursement for the copied records.
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E. F. The entity conducting the audit shall provide the
pharmacy with a written report of the audit and shall :
1. Deliver a preliminary audit findings report to the pharmacy
and the pharmacy's contracting agent within ninety (90) forty-five
(45) calendar days after conclusion of conducting the audit;
2. Allow the pharmacy at least sixty (60) ninety (90) calendar
days following receipt of the preliminary audit findings report in
which to produce documentation to address any discrepancy found
during the audit; provided, however, a pharmacy may request an
extension, not to exceed an additional sixty (60) forty-five (45)
calendar days;
3. Deliver a final audit findings report to the pharmacy and
the pharmacy's contracting agent signed by the auditor within one
hundred twenty (120) ten (10) calendar days after receipt of the
preliminary audit report or final appeal additional documentation
provided by the pharmacy , as provided for in Section 356.3 of this
title, whichever is later;
4. Allow the pharmacy to reverse and resubmit claims
electronically within thirty (30) days of receipt of the final audit
report in lieu of the auditing entity recouping discrepant claim
amounts from the pharmacy ;
5. Recoup May not recoup any disputed funds until after final
internal disposition of the audit findings, including the appeals
process as provided for in Section 356.3 of this title . Unless
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otherwise agreed by the parties, future payments to the pharmacy may
be withheld pending finalization of the audit should the identified
discrepancy exceed Twenty -five Thousand Dollars ($25,000.00) ; and
5. 6. Not accrue interest during the audit and appeal period.
F. G. Each entity conducting an audit shall provide a copy of
the final audit results, and a final audit report upon request,
after completion of any review process to the plan sponsor.
G. H. 1. The full amount of any recoupment on an on-site audit
shall be refunded to the plan sponsor. Except as provided for in
paragraph 2 of this subsection, a charge or assessment for an audit
shall not be based, directly or indirectly, on amounts recouped.
2. This subsection does not prevent the entity conducting the
audit from charging or assessing the responsible party, directly or
indirectly, based on amounts recouped if both of the following
conditions are met:
a. the plan sponsor and the entity conducting the audit
have a contract that explicitly states the percentage
charge or assessment to the plan sponsor, and
b. a commission to an age nt or employee of the entity
conducting the audit is not based, directly or
indirectly, on amounts recouped.
H. I. Unless superseded by state or federal law, auditors shall
only have access to previous audit reports on a particular pharmacy
conducted by the auditing entity for the same pharmacy benefits
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manager, health plan or insurer. An auditing vendor contracting
with multiple pharmacy benefits managers or health insurance plans
shall not use audit reports or other information gained from an
audit on a particular pharmacy to conduct another audit for a
different pharmacy benefits manager or health insurance plan.
SECTION 2. AMENDATORY 59 O.S. 2011, Section 356.3, is
amended to read as follows:
Section 356.3 A. Each entity con ducting an audit shall
establish a written appeals process under which a pharmacy may
appeal an unfavorable preliminary audit report and/or final audit
report to the entity.
B. Following an appeal, if the entity finds that an unfavorable
audit report or any portion thereof is unsubstantiated, the entity
shall dismiss the audit report or the unsubstantiated portion of the
audit report without any further action.
C. Any final audit report , following the final audit appeal
period, with a finding of fraud or willful misrepresentation shall
be referred to the district attorney having proper jurisdiction or
the Attorney General for prosecution upon completion of the appeals
process.
D. This act does not apply to any audit, review or
investigation that is initia ted based on or that involves suspected
or alleged fraud, willful mispresentation misrepresentation or
abuse.
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SECTION 3. AMENDATORY Section 3, Chapter 263, O.S.L.
2014 (59 O.S. Supp. 2020 , Section 359), is amended to read as
follows:
Section 359. Unless otherwise provided by contract, a A
pharmacy benefits manager shall provide, upon request by the covered
entity, information regarding the difference in the amount paid to
providers for prescription services rendered to covered ind ividuals
and the amount billed by the pharmacy benefits manager to the
covered entity or plan sponsor to pay for prescription services
rendered to covered individuals.
SECTION 4. AMENDATORY Section 4, Chapter 263, O.S.L.
2014, as amended by Section 8, Chapter 285, O.S.L. 2016 (59 O.S.
Supp. 2020, Section 360), is amended to read as follows:
Section 360. A. The pharmacy benefits manager shall, with
respect to contracts between a pharmacy benefits manager and a
provider, including a pharmacy service administrative organization :
l. Include in such contracts the specific sources utilized to
determine the maximum allowable cost (MAC) pricing of the pharmacy,
update MAC pricing at least every seven (7) calendar days, and
establish a process for providers to readily access the MAC list
specific to that provider;
2. In order to place a drug on the MAC list, ensure that the
drug is listed as "A" or "B" rated in the most recent version of the
FDA's Approved Drug Products with Therapeutic E quivalence
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Evaluations, also known as the Orange Book , or has an "NR" or "NA"
rating or a similar rating by a nationally recognized reference , and
the drug is generally available for purchase by pharmacies in the
state from national or regional wholesalers and is not obsolete;
3. Ensure dispensing fees are not included in the calculation
of MAC price reimbursement to pharmacy providers;
4. Provide a reasonable administration appeals procedure to
allow a provider or, a provider's representative and a pharmacy
service administrative organization to contest reimbursement amounts
within ten (10) fourteen (14) business days of the final adjusted
payment date. The pharmacy benefits manager shall not prevent the
pharmacy or the pharmacy service administrative or ganization from
filing reimbursement appeals in an electronic batch format. The
pharmacy benefits manager must respond to a provider or, a
provider's representative and a pharmacy service administrative
organization who has have contested a reimbursement amount through
this procedure within ten (10) business days. The pharmacy benefits
manager must respond in an electronic batch format to reimbursement
appeals filed in an electronic batch format. The pharmacy benefits
manager shall not require a pharmacy or pharmacy services
administrative organization to log in to a system to upload
individual claim appeals or to download individual appeal responses.
If a price update is warranted, the pharmacy benefits manager shall
make the change in the reimbursement amount, permit the challenging
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dispensing pharmacy to reverse and rebill the claim in question, and
make the reimbursement amount change retroactive and effective for
each similarly all contracted Oklahoma provider providers; and
5. If the a below-cost reimbursement appeal is denied, the PBM
shall provide the reason for the denial, including the National Drug
Code number from the specific national or regional wholesalers where
the drug is generally available for purchase by pharmacies in the
state at or the dispensing pharmacy at a price below the PBM's
reimbursement price. If the pharmacy benefits manager cannot
provide a specific national or regional wholesaler where the drug
can be purchased by the dispensing pharmacy at a price bel ow the
pharmacy benefit manager's reimbursement price, the pharmacy benefit
manager shall immediately adjust the reimbursement amount, permit
the dispensing pharmacy to reverse and rebill the claim in question,
and make the reimbursement amount adjustment retroactive and
effective for all contracted providers .
B. The pharmacy benefits manager may shall not place a drug on
a MAC list, unless there are at least two therapeutically
equivalent, multiple -source drugs, or at least one generic drug
available from only one manufactur er, generally available for
purchase by network dispensing retail pharmacies from national or
regional wholesalers.
C. The pharmacy benefits manager shall not require
accreditation or licensing of providers , or any entity licensed or
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regulated by the Stat e Board of Pharmacy, other than by the State
Board of Pharmacy or other state or federal government entity as a
condition for participation as a network provider .
D. A pharmacy or pharmacist may decline to provide the
pharmacist clinical or dispensing ser vices to a patient or pharmacy
benefits manager if the pharmacy or pharmacist is to be paid less
than the pharmacy's cost for providing the pharmacist clinical or
dispensing services.
E. The pharmacy benefit s manager shall provide a dedicated
telephone number, email address and name s of the personnel with
decision making authority regarding MAC appeals and pricing .
SECTION 5. It being immediately necessary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval.
COMMITTEE REPORT BY: COMMITTEE ON BUSINESS AND COMMERCE, dated
02/03/2021 - DO PASS, As Coauthored.