Criteria for audit--appeals process to be established--report to beprovided--applicability exceptions.
338.600. 1. Notwithstanding any other provision of law to thecontrary, when an audit of the records of a pharmacy licensed in this stateis conducted by a managed care company, insurance company, third-partypayor, or any entity that represents such companies or groups, such auditshall be conducted in accordance with the following:
(1) The entity conducting the initial on-site audit shall provide thepharmacy with notice at least one week prior to conducting the initialon-site audit for each audit cycle;
(2) Any audit which involves clinical judgment shall be conducted byor in consultation with a licensed pharmacist;
(3) Any clerical error, record-keeping error, typographical error, orscrivener's error regarding a required document or record shall notconstitute fraud or grounds for recoupment, so long as the prescription wasotherwise legally dispensed and the claim was otherwise materially correct;except that, such claims may be otherwise subject to recoupment ofoverpayments or payment of any discovered underpayment. No claim arisingunder this subdivision shall be subject to criminal penalties without proofof intent to commit fraud;
(4) A pharmacy may use the records of a hospital, physician, or otherauthorized practitioner of the healing arts involving drugs or medicinalsupplies written or transmitted by any means of communication for purposesof validating the pharmacy record with respect to orders or refills of alegend or narcotic drug. Electronically stored images of prescriptions,electronically created annotations and other related supportingdocumentation shall be considered valid prescription records. Hard copyand electronic signature logs that indicate the delivery of pharmacyservices shall be considered valid proof of receipt of such services by aprogram enrollee;
(5) A finding of an overpayment or underpayment may be a projectionbased on the number of patients served and having a similar diagnosis or onthe number of similar orders or refills for similar drugs; except that,recoupment of claims shall be based on the actual overpayment orunderpayment unless the projection for overpayment or underpayment is partof a settlement as agreed to by the pharmacy;
(6) Each pharmacy shall be audited under the same standards andparameters as other pharmacies audited by the entity;
(7) A pharmacy shall be allowed at least thirty days followingreceipt of the preliminary audit report in which to produce documentationto address any discrepancy found during an audit;
(8) The period covered by the audit shall not exceed a two-yearperiod beginning two years prior to the initial date of the on-site portionof the audit unless otherwise provided by contractual agreement or if therehas been a previous finding of fraud or as otherwise provided by state orfederal law;
(9) An audit shall not be initiated or scheduled during the firstthree business days of any month due to the high volume of prescriptionsfilled during such time unless otherwise consented to by the pharmacy;
(10) The preliminary audit report shall be delivered to the pharmacywithin one hundred twenty days after conclusion of the audit, withreasonable extensions permitted. A final audit report shall be deliveredto the pharmacy within six months of receipt by the pharmacy of thepreliminary audit report or final appeal, as provided for in subsection 3of this section, whichever is later;
(11) Notwithstanding any other provision in this subsection, theentity conducting the audit shall not use the accounting practice ofextrapolation in calculating recoupments or penalties for audits, except asotherwise authorized under subdivision (5) of this subsection.
2. Recoupments of any disputed moneys shall only occur after finalinternal disposition of the audit, including the appeals process set forthin subsection 3 of this section. Should the identified discrepancy for anindividual audit exceed twenty-five thousand dollars, future payments tothe pharmacy in excess of twenty-five thousand dollars may be withheldpending finalization of the audit.
3. Each entity conducting an audit shall establish an appealsprocess, lasting no longer than six months, under which a licensed pharmacymay appeal an unfavorable preliminary audit report to the entity. If,following such appeal, the entity finds that an unfavorable audit report orany portion thereof is unsubstantiated, the entity shall dismiss the auditreport or such portion without the necessity of any further proceedings.
4. Each entity conducting an audit shall provide a copy of the finalaudit report, after completion of any appeal process, to the plan sponsor.
5. This section shall not apply to any investigative audit thatinvolves probable fraud, willful misrepresentation, or abuse.
6. This section shall not apply to any audit conducted as part of anyinspection or investigation conducted by any governmental entity or lawenforcement agency.
Criteria for audit--appeals process to be established--report to beprovided--applicability exceptions.
338.600. 1. Notwithstanding any other provision of law to thecontrary, when an audit of the records of a pharmacy licensed in this stateis conducted by a managed care company, insurance company, third-partypayor, or any entity that represents such companies or groups, such auditshall be conducted in accordance with the following:
(1) The entity conducting the initial on-site audit shall provide thepharmacy with notice at least one week prior to conducting the initialon-site audit for each audit cycle;
(2) Any audit which involves clinical judgment shall be conducted byor in consultation with a licensed pharmacist;
(3) Any clerical error, record-keeping error, typographical error, orscrivener's error regarding a required document or record shall notconstitute fraud or grounds for recoupment, so long as the prescription wasotherwise legally dispensed and the claim was otherwise materially correct;except that, such claims may be otherwise subject to recoupment ofoverpayments or payment of any discovered underpayment. No claim arisingunder this subdivision shall be subject to criminal penalties without proofof intent to commit fraud;
(4) A pharmacy may use the records of a hospital, physician, or otherauthorized practitioner of the healing arts involving drugs or medicinalsupplies written or transmitted by any means of communication for purposesof validating the pharmacy record with respect to orders or refills of alegend or narcotic drug. Electronically stored images of prescriptions,electronically created annotations and other related supportingdocumentation shall be considered valid prescription records. Hard copyand electronic signature logs that indicate the delivery of pharmacyservices shall be considered valid proof of receipt of such services by aprogram enrollee;
(5) A finding of an overpayment or underpayment may be a projectionbased on the number of patients served and having a similar diagnosis or onthe number of similar orders or refills for similar drugs; except that,recoupment of claims shall be based on the actual overpayment orunderpayment unless the projection for overpayment or underpayment is partof a settlement as agreed to by the pharmacy;
(6) Each pharmacy shall be audited under the same standards andparameters as other pharmacies audited by the entity;
(7) A pharmacy shall be allowed at least thirty days followingreceipt of the preliminary audit report in which to produce documentationto address any discrepancy found during an audit;
(8) The period covered by the audit shall not exceed a two-yearperiod beginning two years prior to the initial date of the on-site portionof the audit unless otherwise provided by contractual agreement or if therehas been a previous finding of fraud or as otherwise provided by state orfederal law;
(9) An audit shall not be initiated or scheduled during the firstthree business days of any month due to the high volume of prescriptionsfilled during such time unless otherwise consented to by the pharmacy;
(10) The preliminary audit report shall be delivered to the pharmacywithin one hundred twenty days after conclusion of the audit, withreasonable extensions permitted. A final audit report shall be deliveredto the pharmacy within six months of receipt by the pharmacy of thepreliminary audit report or final appeal, as provided for in subsection 3of this section, whichever is later;
(11) Notwithstanding any other provision in this subsection, theentity conducting the audit shall not use the accounting practice ofextrapolation in calculating recoupments or penalties for audits, except asotherwise authorized under subdivision (5) of this subsection.
2. Recoupments of any disputed moneys shall only occur after finalinternal disposition of the audit, including the appeals process set forthin subsection 3 of this section. Should the identified discrepancy for anindividual audit exceed twenty-five thousand dollars, future payments tothe pharmacy in excess of twenty-five thousand dollars may be withheldpending finalization of the audit.
3. Each entity conducting an audit shall establish an appealsprocess, lasting no longer than six months, under which a licensed pharmacymay appeal an unfavorable preliminary audit report to the entity. If,following such appeal, the entity finds that an unfavorable audit report orany portion thereof is unsubstantiated, the entity shall dismiss the auditreport or such portion without the necessity of any further proceedings.
4. Each entity conducting an audit shall provide a copy of the finalaudit report, after completion of any appeal process, to the plan sponsor.
5. This section shall not apply to any investigative audit thatinvolves probable fraud, willful misrepresentation, or abuse.
6. This section shall not apply to any audit conducted as part of anyinspection or investigation conducted by any governmental entity or lawenforcement agency.
Criteria for audit--appeals process to be established--report to beprovided--applicability exceptions.
338.600. 1. Notwithstanding any other provision of law to thecontrary, when an audit of the records of a pharmacy licensed in this stateis conducted by a managed care company, insurance company, third-partypayor, or any entity that represents such companies or groups, such auditshall be conducted in accordance with the following:
(1) The entity conducting the initial on-site audit shall provide thepharmacy with notice at least one week prior to conducting the initialon-site audit for each audit cycle;
(2) Any audit which involves clinical judgment shall be conducted byor in consultation with a licensed pharmacist;
(3) Any clerical error, record-keeping error, typographical error, orscrivener's error regarding a required document or record shall notconstitute fraud or grounds for recoupment, so long as the prescription wasotherwise legally dispensed and the claim was otherwise materially correct;except that, such claims may be otherwise subject to recoupment ofoverpayments or payment of any discovered underpayment. No claim arisingunder this subdivision shall be subject to criminal penalties without proofof intent to commit fraud;
(4) A pharmacy may use the records of a hospital, physician, or otherauthorized practitioner of the healing arts involving drugs or medicinalsupplies written or transmitted by any means of communication for purposesof validating the pharmacy record with respect to orders or refills of alegend or narcotic drug. Electronically stored images of prescriptions,electronically created annotations and other related supportingdocumentation shall be considered valid prescription records. Hard copyand electronic signature logs that indicate the delivery of pharmacyservices shall be considered valid proof of receipt of such services by aprogram enrollee;
(5) A finding of an overpayment or underpayment may be a projectionbased on the number of patients served and having a similar diagnosis or onthe number of similar orders or refills for similar drugs; except that,recoupment of claims shall be based on the actual overpayment orunderpayment unless the projection for overpayment or underpayment is partof a settlement as agreed to by the pharmacy;
(6) Each pharmacy shall be audited under the same standards andparameters as other pharmacies audited by the entity;
(7) A pharmacy shall be allowed at least thirty days followingreceipt of the preliminary audit report in which to produce documentationto address any discrepancy found during an audit;
(8) The period covered by the audit shall not exceed a two-yearperiod beginning two years prior to the initial date of the on-site portionof the audit unless otherwise provided by contractual agreement or if therehas been a previous finding of fraud or as otherwise provided by state orfederal law;
(9) An audit shall not be initiated or scheduled during the firstthree business days of any month due to the high volume of prescriptionsfilled during such time unless otherwise consented to by the pharmacy;
(10) The preliminary audit report shall be delivered to the pharmacywithin one hundred twenty days after conclusion of the audit, withreasonable extensions permitted. A final audit report shall be deliveredto the pharmacy within six months of receipt by the pharmacy of thepreliminary audit report or final appeal, as provided for in subsection 3of this section, whichever is later;
(11) Notwithstanding any other provision in this subsection, theentity conducting the audit shall not use the accounting practice ofextrapolation in calculating recoupments or penalties for audits, except asotherwise authorized under subdivision (5) of this subsection.
2. Recoupments of any disputed moneys shall only occur after finalinternal disposition of the audit, including the appeals process set forthin subsection 3 of this section. Should the identified discrepancy for anindividual audit exceed twenty-five thousand dollars, future payments tothe pharmacy in excess of twenty-five thousand dollars may be withheldpending finalization of the audit.
3. Each entity conducting an audit shall establish an appealsprocess, lasting no longer than six months, under which a licensed pharmacymay appeal an unfavorable preliminary audit report to the entity. If,following such appeal, the entity finds that an unfavorable audit report orany portion thereof is unsubstantiated, the entity shall dismiss the auditreport or such portion without the necessity of any further proceedings.
4. Each entity conducting an audit shall provide a copy of the finalaudit report, after completion of any appeal process, to the plan sponsor.
5. This section shall not apply to any investigative audit thatinvolves probable fraud, willful misrepresentation, or abuse.
6. This section shall not apply to any audit conducted as part of anyinspection or investigation conducted by any governmental entity or lawenforcement agency.
