IC 25-26-22-1 Definitions applicable to chapter
Sec. 1. The definitions contained in IC 25-26-13-2 apply
throughout 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 a
pharmacy:
(1) on behalf of a third party payer; and
(2) related to a particular claim made by the pharmacy to the
third 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 an
audit of a sample of claims submitted by a pharmacy to a third party
payer, the results of which are used to estimate audit results for a
larger group of unaudited claims submitted by the pharmacy to the
third 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 this
chapter. 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 the
following:
(1) The contract under which the audit is performed must
provide a description of audit procedures that will be followed.
(2) For an onsite audit conducted at a pharmacy's location, the
auditor that conducts the audit shall provide written notice to
the pharmacy at least two (2) weeks before the initial onsite
audit is performed for each audit cycle.
(3) The auditor shall not interfere with the delivery of
pharmacist services to a patient and shall use every effort to
minimize inconvenience and disruption to pharmacy operations
during the audit. This subdivision does not prohibit audits
during 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 otherwise
transmitted hospital, physician, or other health practitioner
records to validate a pharmacy record with respect to a
prescription for a legend drug.
(6) The auditor shall perform the audit according to the same
standards and parameters that the auditor uses to audit all other
similarly situated pharmacies on behalf of the third party payer.
(7) The period covered by the audit must not exceed
twenty-four (24) months after the date on which the claim that
is the subject of the audit was submitted to or adjudicated by the
third party payer, and the pharmacy must be permitted to
resubmit electronically any claims disputed by the audit. This
subdivision does not limit the period for audits under the
Medicaid program that are conducted due to a federal
requirement.
(8) The audit must not be initiated or scheduled during the first
five (5) calendar days of any month without the voluntary
consent of the pharmacy. The consent may not be mandated by
a contract or any other means.
(9) Payment to the on-site auditor for conducting the audit must
not be based on a percentage of any amount recovered as a
result 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 the
pharmacy written audit reports as follows:
(1) The auditor shall deliver a preliminary audit report to the
pharmacy not later than ninety (90) days after the audit is
concluded.
(2) The auditor shall provide with the preliminary audit report
a written appeal procedure for the pharmacy to follow if the
pharmacy desires to appeal a finding contained in the
preliminary audit report.
(3) The auditor shall deliver a final audit report to the pharmacy
not 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 is
made;
whichever is later.
(4) Each audit report must be signed by the auditor and a
pharmacist participating in the audit.
(5) The auditor shall provide a copy of the final audit report to
the 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 document
that is necessary to the conduct of an audit does not constitute fraud
without proof of intent to commit fraud.
(b) A clerical error that results in inappropriate payment of a
claim by the third party payer may result in recoupment of any
inappropriately 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 of
a claim:
(1) must be based on an actual overpayment or underpayment;
and
(2) may not be based on a projection that is based on the
number 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 that
are 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 before
recoupment of funds may be made based on an audit finding of
overpayment or underpayment.
(b) Except for audits conducted under the Medicaid program,
interest on funds described in subsection (a) does not accrue during
the audit period. As added by P.L.7-2009, SEC.1.
IC 25-26-22-10 Prohibition of extrapolation audits for calculating recoupments or
penalties
Sec. 10. The results of an extrapolation audit may not be used by
an auditor as a basis for calculating overpayment or underpayment
recoupments 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 audit
conducted for purposes of determining whether fraud, willful
misrepresentation, or alleged serious abuse has occurred. As added by P.L.7-2009, SEC.1.
IC 25-26-22-1 Definitions applicable to chapter
Sec. 1. The definitions contained in IC 25-26-13-2 apply
throughout 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 a
pharmacy:
(1) on behalf of a third party payer; and
(2) related to a particular claim made by the pharmacy to the
third 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 an
audit of a sample of claims submitted by a pharmacy to a third party
payer, the results of which are used to estimate audit results for a
larger group of unaudited claims submitted by the pharmacy to the
third 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 this
chapter. 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 the
following:
(1) The contract under which the audit is performed must
provide a description of audit procedures that will be followed.
(2) For an onsite audit conducted at a pharmacy's location, the
auditor that conducts the audit shall provide written notice to
the pharmacy at least two (2) weeks before the initial onsite
audit is performed for each audit cycle.
(3) The auditor shall not interfere with the delivery of
pharmacist services to a patient and shall use every effort to
minimize inconvenience and disruption to pharmacy operations
during the audit. This subdivision does not prohibit audits
during 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 otherwise
transmitted hospital, physician, or other health practitioner
records to validate a pharmacy record with respect to a
prescription for a legend drug.
(6) The auditor shall perform the audit according to the same
standards and parameters that the auditor uses to audit all other
similarly situated pharmacies on behalf of the third party payer.
(7) The period covered by the audit must not exceed
twenty-four (24) months after the date on which the claim that
is the subject of the audit was submitted to or adjudicated by the
third party payer, and the pharmacy must be permitted to
resubmit electronically any claims disputed by the audit. This
subdivision does not limit the period for audits under the
Medicaid program that are conducted due to a federal
requirement.
(8) The audit must not be initiated or scheduled during the first
five (5) calendar days of any month without the voluntary
consent of the pharmacy. The consent may not be mandated by
a contract or any other means.
(9) Payment to the on-site auditor for conducting the audit must
not be based on a percentage of any amount recovered as a
result 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 the
pharmacy written audit reports as follows:
(1) The auditor shall deliver a preliminary audit report to the
pharmacy not later than ninety (90) days after the audit is
concluded.
(2) The auditor shall provide with the preliminary audit report
a written appeal procedure for the pharmacy to follow if the
pharmacy desires to appeal a finding contained in the
preliminary audit report.
(3) The auditor shall deliver a final audit report to the pharmacy
not 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 is
made;
whichever is later.
(4) Each audit report must be signed by the auditor and a
pharmacist participating in the audit.
(5) The auditor shall provide a copy of the final audit report to
the 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 document
that is necessary to the conduct of an audit does not constitute fraud
without proof of intent to commit fraud.
(b) A clerical error that results in inappropriate payment of a
claim by the third party payer may result in recoupment of any
inappropriately 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 of
a claim:
(1) must be based on an actual overpayment or underpayment;
and
(2) may not be based on a projection that is based on the
number 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 that
are 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 before
recoupment of funds may be made based on an audit finding of
overpayment or underpayment.
(b) Except for audits conducted under the Medicaid program,
interest on funds described in subsection (a) does not accrue during
the audit period. As added by P.L.7-2009, SEC.1.
IC 25-26-22-10 Prohibition of extrapolation audits for calculating recoupments or
penalties
Sec. 10. The results of an extrapolation audit may not be used by
an auditor as a basis for calculating overpayment or underpayment
recoupments 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 audit
conducted for purposes of determining whether fraud, willful
misrepresentation, or alleged serious abuse has occurred. As added by P.L.7-2009, SEC.1.
IC 25-26-22-1 Definitions applicable to chapter
Sec. 1. The definitions contained in IC 25-26-13-2 apply
throughout 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 a
pharmacy:
(1) on behalf of a third party payer; and
(2) related to a particular claim made by the pharmacy to the
third 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 an
audit of a sample of claims submitted by a pharmacy to a third party
payer, the results of which are used to estimate audit results for a
larger group of unaudited claims submitted by the pharmacy to the
third 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 this
chapter. 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 the
following:
(1) The contract under which the audit is performed must
provide a description of audit procedures that will be followed.
(2) For an onsite audit conducted at a pharmacy's location, the
auditor that conducts the audit shall provide written notice to
the pharmacy at least two (2) weeks before the initial onsite
audit is performed for each audit cycle.
(3) The auditor shall not interfere with the delivery of
pharmacist services to a patient and shall use every effort to
minimize inconvenience and disruption to pharmacy operations
during the audit. This subdivision does not prohibit audits
during 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 otherwise
transmitted hospital, physician, or other health practitioner
records to validate a pharmacy record with respect to a
prescription for a legend drug.
(6) The auditor shall perform the audit according to the same
standards and parameters that the auditor uses to audit all other
similarly situated pharmacies on behalf of the third party payer.
(7) The period covered by the audit must not exceed
twenty-four (24) months after the date on which the claim that
is the subject of the audit was submitted to or adjudicated by the
third party payer, and the pharmacy must be permitted to
resubmit electronically any claims disputed by the audit. This
subdivision does not limit the period for audits under the
Medicaid program that are conducted due to a federal
requirement.
(8) The audit must not be initiated or scheduled during the first
five (5) calendar days of any month without the voluntary
consent of the pharmacy. The consent may not be mandated by
a contract or any other means.
(9) Payment to the on-site auditor for conducting the audit must
not be based on a percentage of any amount recovered as a
result 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 the
pharmacy written audit reports as follows:
(1) The auditor shall deliver a preliminary audit report to the
pharmacy not later than ninety (90) days after the audit is
concluded.
(2) The auditor shall provide with the preliminary audit report
a written appeal procedure for the pharmacy to follow if the
pharmacy desires to appeal a finding contained in the
preliminary audit report.
(3) The auditor shall deliver a final audit report to the pharmacy
not 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 is
made;
whichever is later.
(4) Each audit report must be signed by the auditor and a
pharmacist participating in the audit.
(5) The auditor shall provide a copy of the final audit report to
the 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 document
that is necessary to the conduct of an audit does not constitute fraud
without proof of intent to commit fraud.
(b) A clerical error that results in inappropriate payment of a
claim by the third party payer may result in recoupment of any
inappropriately 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 of
a claim:
(1) must be based on an actual overpayment or underpayment;
and
(2) may not be based on a projection that is based on the
number 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 that
are 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 before
recoupment of funds may be made based on an audit finding of
overpayment or underpayment.
(b) Except for audits conducted under the Medicaid program,
interest on funds described in subsection (a) does not accrue during
the audit period. As added by P.L.7-2009, SEC.1.
IC 25-26-22-10 Prohibition of extrapolation audits for calculating recoupments or
penalties
Sec. 10. The results of an extrapolation audit may not be used by
an auditor as a basis for calculating overpayment or underpayment
recoupments 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 audit
conducted for purposes of determining whether fraud, willful
misrepresentation, or alleged serious abuse has occurred. As added by P.L.7-2009, SEC.1.
