CHAPTER 22. PHARMACY AUDITS
IC 25-26-22
Chapter 22. Pharmacy Audits
IC 25-26-22-1
Definitions applicable to chapter
Sec. 1. The definitions contained in IC 25-26-13-2 applythroughout this chapter.
As added by P.L.7-2009, SEC.1.
IC 25-26-22-2
"Audit"
Sec. 2. As used in this chapter, "audit" means an audit of apharmacy:
(1) on behalf of a third party payer; and
(2) related to a particular claim made by the pharmacy to thethird party payer.
As added by P.L.7-2009, SEC.1.
IC 25-26-22-3
"Extrapolation audit"
Sec. 3. As used in this chapter, "extrapolation audit" means anaudit of a sample of claims submitted by a pharmacy to a third partypayer, the results of which are used to estimate audit results for alarger group of unaudited claims submitted by the pharmacy to thethird party payer.
As added by P.L.7-2009, SEC.1.
IC 25-26-22-4
Audit compliance
Sec. 4. An audit must be conducted in compliance with thischapter.
As added by P.L.7-2009, SEC.1.
IC 25-26-22-5
Audit requirements
Sec. 5. An auditor conducting an audit shall comply with all of thefollowing:
(1) The contract under which the audit is performed mustprovide a description of audit procedures that will be followed.
(2) For an onsite audit conducted at a pharmacy's location, theauditor that conducts the audit shall provide written notice tothe pharmacy at least two (2) weeks before the initial onsiteaudit is performed for each audit cycle.
(3) The auditor shall not interfere with the delivery ofpharmacist services to a patient and shall use every effort tominimize inconvenience and disruption to pharmacy operationsduring the audit. This subdivision does not prohibit auditsduring normal business hours of the pharmacy.
(4) If the audit requires use of clinical or professional judgment,the audit must be conducted by or in consultation with a
licensed pharmacist.
(5) The auditor shall allow the use of written or otherwisetransmitted hospital, physician, or other health practitionerrecords to validate a pharmacy record with respect to aprescription for a legend drug.
(6) The auditor shall perform the audit according to the samestandards and parameters that the auditor uses to audit all othersimilarly situated pharmacies on behalf of the third party payer.
(7) The period covered by the audit must not exceedtwenty-four (24) months after the date on which the claim thatis the subject of the audit was submitted to or adjudicated by thethird party payer, and the pharmacy must be permitted toresubmit electronically any claims disputed by the audit. Thissubdivision does not limit the period for audits under theMedicaid program that are conducted due to a federalrequirement.
(8) The audit must not be initiated or scheduled during the firstfive (5) calendar days of any month without the voluntaryconsent of the pharmacy. The consent may not be mandated bya contract or any other means.
(9) Payment to the on-site auditor for conducting the audit mustnot be based on a percentage of any amount recovered as aresult of the audit.
As added by P.L.7-2009, SEC.1.
IC 25-26-22-6
Written audit reports
Sec. 6. Following an audit, the auditor shall provide to thepharmacy written audit reports as follows:
(1) The auditor shall deliver a preliminary audit report to thepharmacy not later than ninety (90) days after the audit isconcluded.
(2) The auditor shall provide with the preliminary audit reporta written appeal procedure for the pharmacy to follow if thepharmacy desires to appeal a finding contained in thepreliminary audit report.
(3) The auditor shall deliver a final audit report to the pharmacynot later than one hundred twenty (120) days after:
(A) the preliminary audit report is received by the pharmacy;or
(B) if an appeal is filed, a final appeal determination ismade;
whichever is later.
(4) Each audit report must be signed by the auditor and apharmacist participating in the audit.
(5) The auditor shall provide a copy of the final audit report tothe third party payer.
As added by P.L.7-2009, SEC.1.
IC 25-26-22-7 Clerical errors; fraud; recoupment of payment
Sec. 7. (a) A clerical error related to or contained in a documentthat is necessary to the conduct of an audit does not constitute fraudwithout proof of intent to commit fraud.
(b) A clerical error that results in inappropriate payment of aclaim by the third party payer may result in recoupment of anyinappropriately made payment.
As added by P.L.7-2009, SEC.1.
IC 25-26-22-8
Overpayment and underpayment audit findings
Sec. 8. An audit finding of an overpayment or underpayment ofa claim:
(1) must be based on an actual overpayment or underpayment;and
(2) may not be based on a projection that is based on thenumber of:
(A) patients who:
(i) have similar diagnoses; and
(ii) are served by the pharmacy; or
(B) prescriptions for or refills of similar legend drugs thatare dispensed by the pharmacy.
As added by P.L.7-2009, SEC.1.
IC 25-26-22-9
Audit report; distribution; interest accrual
Sec. 9. (a) A final audit report must first be distributed beforerecoupment of funds may be made based on an audit finding ofoverpayment or underpayment.
(b) Except for audits conducted under the Medicaid program,interest on funds described in subsection (a) does not accrue duringthe audit period.
As added by P.L.7-2009, SEC.1.
IC 25-26-22-10
Prohibition of extrapolation audits for calculating recoupments orpenalties
Sec. 10. The results of an extrapolation audit may not be used byan auditor as a basis for calculating overpayment or underpaymentrecoupments or penalties.
As added by P.L.7-2009, SEC.1.
IC 25-26-22-11
Application of chapter for investigative audits
Sec. 11. This chapter does not apply to an investigative auditconducted for purposes of determining whether fraud, willfulmisrepresentation, or alleged serious abuse has occurred.
As added by P.L.7-2009, SEC.1.