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HF 1236

1st Engrossment - 87th Legislature (2011 - 2012) Posted on 03/15/2012 03:52pm

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to health; establishing a pharmacy audit integrity program; proposing
coding for new law in Minnesota Statutes, chapter 151.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [151.60] PHARMACY AUDIT INTEGRITY PROGRAM.
new text end

new text begin The pharmacy audit integrity program is established to provide standards for an
audit of pharmacy records carried out by a pharmacy benefits manager or any entity that
represents pharmacy benefits managers.
new text end

Sec. 2.

new text begin [151.61] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For the purposes of sections 151.60 to 151.66, the following
terms have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Entity. new text end

new text begin "Entity" means a pharmacy benefits manager or any person or
organization that represents these companies, groups, or organizations.
new text end

new text begin Subd. 3. new text end

new text begin Pharmacy benefits manager or PBM. new text end

new text begin "Pharmacy benefits manager"
or "PBM" means a person, business, or other entity that performs pharmacy benefits
management. The term includes a person or entity acting for a PBM in a contractual or
employment relationship in the performance of pharmacy benefits management.
new text end

new text begin Subd. 4. new text end

new text begin Plan sponsor. new text end

new text begin "Plan sponsor" means the employer in the case of an
employee benefit plan established or maintained by a single employer, a group purchaser
as defined in section 62J.03, subdivision 6, or the employee organization in the case of a
plan established or maintained by an employee organization, an association, joint board of
trustees, committee, or other similar group that establishes or maintains the plan.
new text end

Sec. 3.

new text begin [151.62] PHARMACY BENEFIT MANAGER CONTRACT.
new text end

new text begin (a) A pharmacy benefit manager (PBM) contract that is altered or amended by that
entity may be substituted for a current contract but is not effective without the written
consent of a pharmacy. The pharmacy must receive a copy of the proposed contract
changes or renewal along with a disclosure by the PBM of all material changes in terms of
the contract or methods of reimbursement from the previous contract.
new text end

new text begin (b) An amendment or change in terms of an existing contract between a PBM and a
pharmacy must be disclosed to the pharmacy at least 120 days prior to the effective date
of the proposed change. A PBM may not alter or amend a PBM contract, or impose
any additional contractual obligation on a pharmacy, unless the PBM complies with the
requirements in this section.
new text end

Sec. 4.

new text begin [151.63] PROCEDURE AND PROCESS FOR CONDUCTING AND
REPORTING AN AUDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Audit procedures. new text end

new text begin Unless otherwise prohibited by federal
requirements or regulations, any entity conducting a pharmacy audit must follow the
following procedures.
new text end

new text begin (1) A pharmacy must be given a written notice before an initial on-site audit is
conducted.
new text end

new text begin (2) An audit that involves clinical or professional judgment must be conducted by or
in consultation with a pharmacist licensed in this state or the Board of Pharmacy.
new text end

new text begin (3) Each pharmacy shall be audited under the same standards and parameters as
other similarly situated pharmacies.
new text end

new text begin (4) If copies of records are requested by the auditing entity, they will pay the cost of
copying health records allowed under section 144.292, subdivision 6, to the pharmacy.
new text end

new text begin Subd. 2. new text end

new text begin Audit process. new text end

new text begin Unless otherwise prohibited by federal requirements or
regulations, for any entity conducting a pharmacy audit the following audit items apply.
new text end

new text begin (1) The period covered by the audit may not exceed 24 months from the date that the
claim was submitted to or adjudicated by the entity, unless a longer period is permitted
under federal law.
new text end

new text begin (2) If an entity uses sampling as a method for selecting a set of claims for
examination, the sample size must be appropriate for a statistically reliable sample but
may not exceed 60 prescriptions.
new text end

new text begin (3) The audit may not take place during the first seven business days of the month
due to the high volume of prescriptions filled during that time unless consented to by
the pharmacy.
new text end

new text begin (4) Auditors may not enter the pharmacy area where patient-specific information is
available and must be out of sight and hearing range of the pharmacy customers.
new text end

new text begin (5) Any recoupment will not be deducted against future remittances and shall be
invoiced to the pharmacy for payment.
new text end

new text begin (6) Recoupment may not be assessed for items on the face of a prescription not
required by the Board of Pharmacy.
new text end

new text begin (7) The auditing company or agent may not receive payment based on a percentage
of the amount recovered.
new text end

Sec. 5.

new text begin [151.64] REQUIREMENTS FOR RECOUPMENT OR CHARGEBACK.
new text end

new text begin For recoupment or chargeback, the following criteria apply.
new text end

new text begin (1) Audit parameters must consider consumer-oriented parameters based on
manufacturer listings.
new text end

new text begin (2) A pharmacy's usual and customary price for compounded medications is
considered the reimbursable cost unless an alternate price is published in the provider
contract and signed by both parties.
new text end

new text begin (3) A finding of overpayment or underpayment must be based on the actual
overpayment or underpayment and not a projection based on the number of patients served
having a similar diagnosis or on the number of similar orders or refills for similar drugs.
new text end

new text begin (4) The entity conducting the audit shall not use extrapolation in calculating the
recoupment or penalties for audits.
new text end

new text begin (5) Calculations of overpayments must not include dispensing fees unless a
prescription was not actually dispensed or the prescriber denied authorization.
new text end

new text begin (6) An entity may not consider any clerical or record keeping error, such as a
typographical error, scrivener's error, or computer error regarding a required document or
record as fraud, however such errors may be subject to recoupment.
new text end

new text begin (7) In the case of errors that have no financial harm to the patient or plan, the PBM
must not assess any chargebacks.
new text end

new text begin (8) Interest may not accrue during the audit period, beginning with the notice of the
audit and ending with the final audit report.
new text end

Sec. 6.

new text begin [151.65] DOCUMENTATION.
new text end

new text begin (a) The pharmacy may use the records including medication administration records
of a hospital, physician, or other authorized practitioner to validate the pharmacy record
and delivery.
new text end

new text begin (b) Any legal prescription that meets the requirements in this chapter may be used
to validate claims in connection with prescriptions, refills, or changes in prescriptions,
including medication administration records, faxes, e-prescriptions, or documented
telephone calls from the prescriber or the prescriber's agents.
new text end

Sec. 7.

new text begin [151.66] APPEALS PROCESS.
new text end

new text begin The entity conducting the audit must establish a written appeals process which must
include appeals of preliminary reports and final reports. If either party is not satisfied with
the appeal, that party may seek mediation.
new text end

Sec. 8.

new text begin [151.67] AUDIT INFORMATION AND REPORTS.
new text end

new text begin (a) A preliminary audit report must be delivered to the pharmacy within 30 days
after the conclusion of the audit.
new text end

new text begin (b) A pharmacy must be allowed at least 30 days following receipt of the preliminary
audit to provide documentation to address any discrepancy found in the audit.
new text end

new text begin (c) A final audit report must be delivered to the pharmacy within 90 days after
receipt of the preliminary audit report or final appeal, whichever is later.
new text end

new text begin (d) No chargeback, recoupment, or other penalties may be assessed until the appeals
process has been exhausted and the final report issued.
new text end

new text begin (e) An entity shall remit any money due to a pharmacy or pharmacist as a result of
an underpayment of a claim within 30 days after the appeals process has been exhausted
and the final audit report has been issued.
new text end

new text begin (f) Where not superseded by state or federal law, audit information may not be
shared. Auditors shall only have access to previous audit reports on a particular pharmacy
conducted by that same auditing entity.
new text end

Sec. 9.

new text begin [151.68] DISCLOSURES TO PLAN SPONSOR.
new text end

new text begin An auditing entity must provide a copy of the final report to the plan sponsor whose
claims were included in the audit, and any recouped money shall be returned to the plan
sponsor.
new text end

Sec. 10.

new text begin [151.69] APPLICABILITY OF OTHER LAWS AND REGULATIONS.
new text end

new text begin Sections 151.60 to 151.68 do not apply to any investigative audit that involves
fraud, willful misrepresentation, or abuse, or any audit completed by Minnesota health
care programs.
new text end