Texas 2013 - 83rd Regular

Texas House Bill HB1358 Compare Versions

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1	1	By: Hunter, et al. (Senate Sponsor - Van de Putte) H.B. No. 1358
2	2	(In the Senate - Received from the House May 3, 2013;
3	3	May 8, 2013, read first time and referred to Committee on State
4	4	Affairs; May 14, 2013, reported favorably by the following vote:
5	5	Yeas 8, Nays 0; May 14, 2013, sent to printer.)
6	6
7	7
8	8	A BILL TO BE ENTITLED
9	9	AN ACT
10	10	relating to procedures for certain audits of pharmacists and
11	11	pharmacies.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Chapter 1369, Insurance Code, is amended by
14	14	adding Subchapter F to read as follows:
15	15	SUBCHAPTER F. AUDITS OF PHARMACISTS AND PHARMACIES
16	16	Sec. 1369.251. DEFINITIONS. In this subchapter:
17	17	(1) "Desk audit" means an audit conducted by a health
18	18	benefit plan issuer or pharmacy benefit manager at a location other
19	19	than the location of the pharmacist or pharmacy. The term includes
20	20	an audit performed at the offices of the plan issuer or pharmacy
21	21	benefit manager during which the pharmacist or pharmacy provides
22	22	requested documents for review by hard copy or by microfiche, disk,
23	23	or other electronic media. The term does not include a review
24	24	conducted not later than the third business day after the date a
25	25	claim is adjudicated provided recoupment is not demanded.
26	26	(2) "Extrapolation" means a mathematical process or
27	27	technique used by a health benefit plan issuer or pharmacy benefit
28	28	manager that administers pharmacy claims for a health benefit plan
29	29	issuer in the audit of a pharmacy or pharmacist to estimate audit
30	30	results or findings for a larger batch or group of claims not
31	31	reviewed by the plan issuer or pharmacy benefit manager.
32	32	(3) "Health benefit plan" means a plan that provides
33	33	benefits for medical, surgical, or other treatment expenses
34	34	incurred as a result of a health condition, a mental health
35	35	condition, an accident, sickness, or substance abuse, including:
36	36	(A) an individual, group, blanket, or franchise
37	37	insurance policy or insurance agreement, a group hospital service
38	38	contract, or an individual or group evidence of coverage or similar
39	39	coverage document that is issued by:
40	40	(i) an insurance company;
41	41	(ii) a group hospital service corporation
42	42	operating under Chapter 842;
43	43	(iii) a health maintenance organization
44	44	operating under Chapter 843;
45	45	(iv) an approved nonprofit health
46	46	corporation that holds a certificate of authority under Chapter
47	47	844;
48	48	(v) a multiple employer welfare arrangement
49	49	that holds a certificate of authority under Chapter 846;
50	50	(vi) a stipulated premium company operating
51	51	under Chapter 884;
52	52	(vii) a fraternal benefit society operating
53	53	under Chapter 885;
54	54	(viii) a Lloyd's plan operating under
55	55	Chapter 941; or
56	56	(ix) an exchange operating under Chapter
57	57	942;
58	58	(B) a small employer health benefit plan written
59	59	under Chapter 1501; or
60	60	(C) a health benefit plan issued under Chapter
61	61	1551, 1575, 1579, or 1601.
62	62	(4) "On-site audit" means an audit that is conducted
63	63	at:
64	64	(A) the location of the pharmacist or pharmacy;
65	65	or
66	66	(B) another location at which the records under
67	67	review are stored.
68	68	(5) "Pharmacy benefit manager" has the meaning
69	69	assigned by Section 4151.151.
70	70	Sec. 1369.252. EXCEPTIONS TO APPLICABILITY OF SUBCHAPTER.
71	71	This subchapter does not apply to an issuer or provider of health
72	72	benefits under or a pharmacy benefit manager administering pharmacy
73	73	benefits under:
74	74	(1) the state Medicaid program;
75	75	(2) the federal Medicare program;
76	76	(3) the state child health plan or health benefits
77	77	plan for children under Chapter 62 or 63, Health and Safety Code;
78	78	(4) the TRICARE military health system;
79	79	(5) a workers' compensation insurance policy or other
80	80	form of providing medical benefits under Title 5, Labor Code; or
81	81	(6) a self-funded health benefit plan as defined by
82	82	the Employee Retirement Income Security Act of 1974 (29 U.S.C.
83	83	Section 1001 et seq.).
84	84	Sec. 1369.253. CONFLICT WITH OTHER LAWS. If there is a
85	85	conflict between this subchapter and a provision of Chapter 843 or
86	86	1301 related to a pharmacy benefit manager, this subchapter
87	87	prevails.
88	88	Sec. 1369.254. AUDIT OF PHARMACIST OR PHARMACY; NOTICE;
89	89	GENERAL PROVISIONS. (a) Except as provided by Subsection (d), a
90	90	health benefit plan issuer or pharmacy benefit manager that
91	91	performs an on-site audit under this subchapter of a pharmacist or
92	92	pharmacy shall provide the pharmacist or pharmacy reasonable notice
93	93	of the audit and accommodate the pharmacist's or pharmacy's
94	94	schedule to the greatest extent possible. The notice required
95	95	under this subsection must be in writing and must be sent by a means
96	96	that allows tracking of delivery to the pharmacist or pharmacy not
97	97	later than the 14th day before the date on which the on-site audit
98	98	is scheduled to occur.
99	99	(b) Not later than the seventh day after the date a
100	100	pharmacist or pharmacy receives notice under Subsection (a), the
101	101	pharmacist or pharmacy may request that an on-site audit be
102	102	rescheduled to a mutually convenient date. The request must be
103	103	reasonably granted.
104	104	(c) Unless the pharmacist or pharmacy consents in writing, a
105	105	health benefit plan issuer or pharmacy benefit manager may not
106	106	schedule or have an on-site audit conducted:
107	107	(1) except as provided by Subsection (d), before the
108	108	14th day after the date the pharmacist or pharmacy receives notice
109	109	under Subsection (a), if applicable;
110	110	(2) more than twice annually in connection with a
111	111	particular payor; or
112	112	(3) during the first five calendar days of January and
113	113	December.
114	114	(d) A health benefit plan issuer or pharmacy benefit manager
115	115	is not required to provide notice before conducting an audit if,
116	116	after reviewing claims data, written or oral statements of pharmacy
117	117	staff, wholesalers, or others, or other investigative information,
118	118	including patient referrals, anonymous reports, or postings on
119	119	Internet websites, the plan issuer or pharmacy benefit manager
120	120	suspects the pharmacist or pharmacy subject to the audit committed
121	121	fraud or made an intentional misrepresentation related to the
122	122	pharmacy business. The pharmacist or pharmacy may not request that
123	123	the audit be rescheduled under Subsection (b).
124	124	(e) A pharmacist or pharmacy may be required to submit
125	125	documents in response to a desk audit not earlier than the 20th day
126	126	after the date the health benefit plan issuer or pharmacy benefit
127	127	manager requests the documents.
128	128	(f) A contract between a pharmacist or pharmacy and a health
129	129	benefit plan issuer or pharmacy benefit manager must state detailed
130	130	audit procedures. If a health benefit plan issuer or pharmacy
131	131	benefit manager proposes a change to the audit procedures for an
132	132	on-site audit or a desk audit, the plan issuer or pharmacy benefit
133	133	manager must notify the pharmacist or pharmacy in writing of a
134	134	change in an audit procedure not later than the 60th day before the
135	135	effective date of the change.
136	136	(g) The list of the claims subject to an on-site audit must
137	137	be provided in the notice under Subsection (a) to the pharmacist or
138	138	pharmacy and must identify the claims only by the prescription
139	139	numbers or a date range for prescriptions subject to the audit. The
140	140	last two digits of the prescription numbers provided may be
141	141	omitted.
142	142	(h) If the health benefit plan issuer or pharmacy benefit
143	143	manager in an on-site audit or a desk audit applies random sampling
144	144	procedures to select claims for audit, the sample size may not be
145	145	greater than 300 individual prescription claims.
146	146	Sec. 1369.255. COMPLETION OF AUDIT. An audit of a claim
147	147	under Section 1369.254 must be completed on or before the one-year
148	148	anniversary of the date the claim is received by the health benefit
149	149	plan issuer or pharmacy benefit manager.
150	150	Sec. 1369.256. AUDIT REQUIRING PROFESSIONAL JUDGMENT. A
151	151	health benefit plan issuer or pharmacy benefit manager that
152	152	conducts an on-site audit or a desk audit involving a pharmacist's
153	153	clinical or professional judgment must conduct the audit in
154	154	consultation with a licensed pharmacist.
155	155	Sec. 1369.257. ACCESS TO PHARMACY AREA. A health benefit
156	156	plan issuer or pharmacy benefit manager that conducts an on-site
157	157	audit may not enter the pharmacy area unless escorted by an
158	158	individual authorized by the pharmacist or pharmacy.
159	159	Sec. 1369.258. VALIDATION USING CERTAIN RECORDS
160	160	AUTHORIZED. A pharmacist or pharmacy that is being audited may:
161	161	(1) validate a prescription, refill of a prescription,
162	162	or change in a prescription with a prescription that complies with
163	163	applicable federal laws and regulations and state laws and rules
164	164	adopted under Section 554.051, Occupations Code; and
165	165	(2) validate the delivery of a prescription with a
166	166	written record of a hospital, physician, or other authorized
167	167	practitioner of the healing arts.
168	168	Sec. 1369.259. CALCULATION OF RECOUPMENT; USE OF
169	169	EXTRAPOLATION PROHIBITED. (a) A health benefit plan issuer or
170	170	pharmacy benefit manager may not calculate the amount of a
171	171	recoupment based on:
172	172	(1) an absence of documentation the pharmacist or
173	173	pharmacy is not required by applicable federal laws and regulations
174	174	and state laws and rules to maintain; or
175	175	(2) an error that does not result in actual financial
176	176	harm to the patient or enrollee, the health benefit plan issuer, or
177	177	the pharmacy benefit manager.
178	178	(b) A health benefit plan issuer or pharmacy benefit manager
179	179	may not require extrapolation audits as a condition of
180	180	participation in a contract, network, or program for a pharmacist
181	181	or pharmacy.
182	182	(c) A health benefit plan issuer or pharmacy benefit manager
183	183	may not use extrapolation to complete an on-site audit or a desk
184	184	audit of a pharmacist or pharmacy. Notwithstanding Subsection
185	185	(a)(2), the amount of a recoupment must be based on the actual
186	186	overpayment or underpayment and may not be based on an
187	187	extrapolation.
188	188	(d) A health benefit plan issuer or pharmacy benefit manager
189	189	may not include a dispensing fee amount in the calculation of an
190	190	overpayment unless:
191	191	(1) the fee was a duplicate charge;
192	192	(2) the prescription for which the fee was charged:
193	193	(A) was not dispensed; or
194	194	(B) was dispensed:
195	195	(i) without the prescriber's authorization;
196	196	(ii) to the wrong patient; or
197	197	(iii) with the wrong instructions; or
198	198	(3) the wrong drug was dispensed.
199	199	Sec. 1369.260. CLERICAL OR RECORDKEEPING ERROR; FRAUD
200	200	ALLEGATION. (a) An unintentional clerical or recordkeeping error,
201	201	such as a typographical error, scrivener's error, or computer
202	202	error, found during an on-site audit or a desk audit:
203	203	(1) is not prima facie evidence of fraud or
204	204	intentional misrepresentation; and
205	205	(2) may not be the basis of a recoupment unless the
206	206	error results in actual financial harm to a patient or enrollee,
207	207	health benefit plan issuer, or pharmacy benefit manager.
208	208	(b) If the health benefit plan issuer or pharmacy benefit
209	209	manager alleges that the pharmacist or pharmacy committed fraud or
210	210	intentional misrepresentation described by Subsection (a), the
211	211	health benefit plan issuer or pharmacy benefit manager must state
212	212	the allegation in the final audit report required by Section
213	213	1369.264.
214	214	(c) After an audit is initiated, a pharmacist or pharmacy
215	215	may resubmit a claim described by Subsection (a) if the deadline for
216	216	submission of a claim under Section 843.337 or 1301.102 has not
217	217	expired.
218	218	Sec. 1369.261. ACCESS TO PREVIOUS AUDIT REPORTS; UNIFORM
219	219	AUDIT STANDARDS. (a) Except as provided by Subsection (b), a
220	220	health benefit plan issuer or pharmacy benefit manager may have
221	221	access to an audit report of a pharmacist or pharmacy only if the
222	222	report was prepared in connection with an audit conducted by the
223	223	health benefit plan issuer or pharmacy benefit manager.
224	224	(b) A health benefit plan issuer or pharmacy benefit manager
225	225	may have access to audit reports other than the reports described by
226	226	Subsection (a) if, after reviewing claims data, written or oral
227	227	statements of pharmacy staff, wholesalers, or others, or other
228	228	investigative information, including patient referrals, anonymous
229	229	reports, or postings on Internet websites, the plan issuer or the
230	230	pharmacy benefit manager suspects the audited pharmacist or
231	231	pharmacy committed fraud or made an intentional misrepresentation
232	232	related to the pharmacy business.
233	233	(c) An auditor must conduct an on-site audit or a desk audit
234	234	of similarly situated pharmacists or pharmacies under the same
235	235	audit standards.
236	236	Sec. 1369.262. COMPENSATION OF AUDITOR. An individual
237	237	performing an on-site audit or a desk audit may not directly or
238	238	indirectly receive compensation based on a percentage of the amount
239	239	recovered as a result of the audit.
240	240	Sec. 1369.263. CONCLUSION OF AUDIT; SUMMARY; PRELIMINARY
241	241	AUDIT REPORT. (a) At the conclusion of an on-site audit or a desk
242	242	audit, the health benefit plan issuer or pharmacy benefit manager
243	243	shall:
244	244	(1) provide to the pharmacist or pharmacy a summary of
245	245	the audit findings; and
246	246	(2) allow the pharmacist or pharmacy to respond to
247	247	questions and alleged discrepancies, if any, and comment on and
248	248	clarify the findings.
249	249	(b) Not later than the 60th day after the date the audit is
250	250	concluded, the health benefit plan issuer or pharmacy benefit
251	251	manager shall send by a means that allows tracking of delivery to
252	252	the pharmacist or pharmacy a preliminary audit report stating the
253	253	results of the audit and a list identifying documentation, if any,
254	254	required to resolve discrepancies, if any, found as a result of the
255	255	audit.
256	256	(c) The pharmacist or pharmacy may, by providing
257	257	documentation or otherwise, challenge a result or remedy a
258	258	discrepancy stated in the preliminary audit report not later than
259	259	the 30th day after the date the pharmacist or pharmacy receives the
260	260	report.
261	261	(d) The pharmacist or pharmacy may request an extension to
262	262	provide documentation supporting a challenge. The request shall be
263	263	reasonably granted. A health benefit plan issuer or pharmacy
264	264	benefit manager that grants an extension is not subject to the
265	265	deadline to send the final audit report under Section 1369.264.
266	266	Sec. 1369.264. FINAL AUDIT REPORT. Not later than the 120th
267	267	day after the date the pharmacist or pharmacy receives a
268	268	preliminary audit report under Section 1369.263, the health benefit
269	269	plan issuer or pharmacy benefit manager shall send by a means that
270	270	allows tracking of delivery to the pharmacist or pharmacy a final
271	271	audit report that states:
272	272	(1) the audit results after review of the
273	273	documentation submitted by the pharmacist or pharmacy in response
274	274	to the preliminary audit report; and
275	275	(2) the audit results, including a description of all
276	276	alleged discrepancies and explanations for and the amount of
277	277	recoupments claimed after consideration of the pharmacist's or
278	278	pharmacy's response to the preliminary audit report.
279	279	Sec. 1369.265. CERTAIN AUDITS EXEMPT FROM DEADLINES. A
280	280	health benefit plan issuer or pharmacy benefit manager is not
281	281	subject to the deadlines for sending a report under Sections
282	282	1369.263 and 1369.264 if, after reviewing claims data, written or
283	283	oral statements of pharmacy staff, wholesalers, or others, or other
284	284	investigative information, including patient referrals, anonymous
285	285	reports, or postings on Internet websites, the plan issuer or
286	286	pharmacy benefit manager suspects the audited pharmacist or
287	287	pharmacy committed fraud or made an intentional misrepresentation
288	288	related to the pharmacy business.
289	289	Sec. 1369.266. RECOUPMENT AND INTEREST CHARGED AFTER AUDIT.
290	290	(a) If an audit under this subchapter is conducted, the health
291	291	benefit plan issuer or pharmacy benefit manager:
292	292	(1) may recoup from the pharmacist or pharmacy an
293	293	amount based only on a final audit report; and
294	294	(2) may not accrue or assess interest on an amount due
295	295	until the date the pharmacist or pharmacy receives the final audit
296	296	report under Section 1369.264.
297	297	(b) The limitations on recoupment and interest accrual or
298	298	assessment under Subsection (a) do not apply to a health benefit
299	299	plan issuer or pharmacy benefit manager that, after reviewing
300	300	claims data, written or oral statements of pharmacy staff,
301	301	wholesalers, or others, or other investigative information,
302	302	including patient referrals, anonymous reports, or postings on
303	303	Internet websites, suspects the audited pharmacist or pharmacy
304	304	committed fraud or made an intentional misrepresentation related to
305	305	the pharmacy business.
306	306	Sec. 1369.267. WAIVER PROHIBITED. The provisions of this
307	307	subchapter may not be waived, voided, or nullified by contract.
308	308	Sec. 1369.268. REMEDIES NOT EXCLUSIVE. This subchapter may
309	309	not be construed to waive a remedy at law available to a pharmacist
310	310	or pharmacy.
311	311	Sec. 1369.269. ENFORCEMENT; RULES. The commissioner may
312	312	enforce this subchapter and adopt and enforce reasonable rules
313	313	necessary to accomplish the purposes of this subchapter.
314	314	Sec. 1369.270. LEGISLATIVE DECLARATION. Except as provided
315	315	by Section 1369.252, it is the intent of the legislature that the
316	316	requirements contained in this subchapter regarding the audit of
317	317	claims to providers who are pharmacists or pharmacies apply to all
318	318	health benefit plan issuers and pharmacy benefit managers unless
319	319	otherwise prohibited by federal law.
320	320	SECTION 2. Section 1301.001, Insurance Code, as amended by
321	321	Chapters 288 (H.B. 1772) and 798 (H.B. 2292), Acts of the 82nd
322	322	Legislature, Regular Session, 2011, is amended by reenacting and
323	323	amending Subdivision (1) and reenacting Subdivision (1-a) to read
324	324	as follows:
325	325	(1) "Exclusive provider benefit plan" means a benefit
326	326	plan in which an insurer excludes benefits to an insured for some or
327	327	all services, other than emergency care services required under
328	328	Section 1301.155, provided by a physician or health care provider
329	329	who is not a preferred provider. ["Extrapolation" means a
330	330	mathematical process or technique used by an insurer or pharmacy
331	331	benefit manager that administers pharmacy claims for an insurer in
332	332	the audit of a pharmacy or pharmacist to estimate audit results or
333	333	findings for a larger batch or group of claims not reviewed by the
334	334	insurer or pharmacy benefit manager.]
335	335	(1-a) "Health care provider" means a practitioner,
336	336	institutional provider, or other person or organization that
337	337	furnishes health care services and that is licensed or otherwise
338	338	authorized to practice in this state. The term includes a
339	339	pharmacist and a pharmacy. The term does not include a physician.
340	340	SECTION 3. The following provisions of the Insurance Code
341	341	are repealed:
342	342	(1) Section 843.002(9-a);
343	343	(2) Section 843.3401; and
344	344	(3) Section 1301.1041.
345	345	SECTION 4. The changes in law made by this Act apply only to
346	346	contracts between a pharmacist or pharmacy and a health benefit
347	347	plan issuer or pharmacy benefit manager executed or renewed, and
348	348	audits conducted under those contracts, on or after the effective
349	349	date of this Act. Contracts entered into or renewed, and audits
350	350	conducted under those contracts, before the effective date of this
351	351	Act are governed by the law in effect immediately before the
352	352	effective date of this Act, and that law is continued in effect for
353	353	that purpose.
354	354	SECTION 5. This Act takes effect September 1, 2013.
355	355	* * * * *