As Introduced

130th General Assembly
Regular Session
2013-2014
S. B. No. 258


Senator Balderson 



A BILL
To enact sections 3901.41, 3901.411, 3901.412, 1
3901.413, and 3901.414 of the Revised Code to 2
establish standards for the performance of 3
pharmacy audits.4


BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

       Section 1.  That sections 3901.41, 3901.411, 3901.412, 5
3901.413, and 3901.414 of the Revised Code be enacted to read as 6
follows:7

       Sec. 3901.41.  As used in this section and sections 3901.411 8
to 3901.414 of the Revised Code:9

       (A) "Auditing entity" means any person or government entity 10
that performs a pharmacy audit, including a payer, a pharmacy 11
benefit manager, or a third-party administrator licensed under 12
Chapter 3959. of the Revised Code.13

       (B) "Business day" means any day of the week excluding 14
Saturday, Sunday, and a legal holiday, as defined in section 1.14 15
of the Revised Code.16

       (C) "Concurrent review" means a temporary electronic review 17
of claims for payment for the provision of dangerous drugs or 18
pharmacy services conducted at the point of sale.19

        (D) "Dangerous drug," "pharmacy," "practice of pharmacy," and 20
"prescription" have the same meanings as in section 4729.01 of the 21
Revised Code.22

       (E) "Payer" means any of the following that pays for or 23
processes a claim for payment for the provision of dangerous drugs 24
or pharmacy services:25

       (1) A health insuring corporation, as defined in section 26
1751.01 of the Revised Code;27

       (2) A person authorized to engage in the business of sickness 28
and accident insurance under Title XXXIX of the Revised Code;29

       (3) A person or government entity providing coverage of 30
dangerous drugs or pharmacy services to individuals on a 31
self-insurance basis;32

       (4) A group health plan, as defined in 29 U.S.C. 1167;33

       (5) A service benefit plan, as referenced in 42 U.S.C. 34
1396a(a)(25);35

       (6) The medicaid program, including a medicaid managed care 36
organization that has entered into a contract with the department 37
of medicaid pursuant to section 5167.10 of the Revised Code;38

       (7) Any other person or government entity that is, by law, 39
contract, or agreement, responsible for paying for or processing a 40
claim for payment for the provision of dangerous drugs or pharmacy 41
services.42

       (F) "Pharmacy audit" means a review of one or more pharmacy 43
records conducted by an auditing entity, one purpose of which is 44
to identify discrepancies in claims for payment for the provision 45
of dangerous drugs or pharmacy services. "Pharmacy audit" does not 46
include a concurrent review for which the auditing entity does not 47
demand to recoup from the pharmacy any amount.48

       (G) "Pharmacy benefit manager" means a person that provides 49
administrative services related to the processing of claims for 50
payment for the provision of dangerous drugs or pharmacy services, 51
including performing pharmacy audit compliance, negotiating 52
pharmaceutical rebate agreements, developing and managing drug 53
formularies and preferred drug lists, and administering programs 54
for payers' prior authorization of claims for payment for the 55
provision of dangerous drugs or pharmacy services.56

       (H) "Pharmacy record" means any record stored electronically 57
or as a hard copy by a pharmacy that relates to the provision of 58
dangerous drugs or pharmacy services or any other component of 59
pharmacist care that is included in the practice of pharmacy.60

       Sec. 3901.411.  (A) Except as provided in division (B) of 61
this section, an auditing entity is subject to all of the 62
following conditions when performing a pharmacy audit in this 63
state on or after April 1, 2014:64

       (1) If it is necessary that the pharmacy audit be performed 65
on the premises of a pharmacy, the auditing entity shall give the 66
pharmacy that is the subject of the audit written notice of the 67
date or dates on which the audit will be performed and the range 68
of prescription numbers from which the auditing entity will select 69
pharmacy records to audit. Notice shall be given not less than ten 70
business days before the date the audit is to commence.71

       (2) The pharmacy audit shall not be performed during the 72
first five business days of a calendar month unless the pharmacy 73
that is the subject of the audit consents to the audit being 74
performed during those days.75

       (3) The auditing entity shall not include in the pharmacy 76
audit a review of a claim for payment for the provision of 77
dangerous drugs or pharmacy services if the date of the pharmacy's 78
initial submission of the claim for payment occurred more than 79
twenty-four months before the date the audit commences.80

       (4) Absent an indication that there was an error in the 81
dispensing of a drug, the auditing entity or payer shall not seek 82
to recoup from the pharmacy that is the subject of the audit any 83
amount that the pharmacy audit identifies as being the result of 84
clerical or recordkeeping errors. For purposes of this provision, 85
an error in the dispensing of a drug is any of the following: 86
selecting an incorrect drug, issuing incorrect directions, or 87
dispensing a drug to the incorrect patient.88

       (5) The auditing entity shall not use the accounting practice 89
of extrapolation when calculating a monetary penalty to be imposed 90
or amount to be recouped as the result of the pharmacy audit.91

       (B)(1) The conditions in divisions (A)(1) and (2) of this 92
section do not apply if, prior to the audit, the auditing entity 93
has evidence, from its review of claims data, statements, or 94
physical evidence or its use of other investigative methods, 95
indicating that fraud or other intentional or willful 96
misrepresentation exists.97

        (2) The condition in division (A)(4) of this section does not 98
apply if the auditing entity has evidence, from its review of 99
claims data, statements, or physical evidence or its use of other 100
investigative methods, indicating that fraud or other intentional 101
or willful misrepresentation exists.102

        (3) The condition in division (A)(5) of this section does not 103
apply unless it is required by state or federal law.104

       Sec. 3901.412.  A pharmacy may do any of the following when a 105
pharmacy audit is performed:106

       (A) Validate a pharmacy record by using original or 107
photocopied records from hospitals, physicians, or other health 108
care providers;109

       (B) Validate one or more claims for payment for the provision 110
of dangerous drugs or pharmacy services by using either of the 111
following:112

        (1) An original pharmacy record or photocopy of the record;113

       (2) An original prescription or photocopy of the prescription 114
in any form that constitutes a valid prescription in this state, 115
including a written prescription, a prescription made through an 116
electronic prescribing system, a prescription delivered by 117
facsimile, a prescription made by issuing an order for medication 118
administration, and the record a pharmacist maintains under 119
section 4729.37 of the Revised Code documenting a prescription 120
received by telephone.121

       (C) Resubmit a disputed or denied claim for payment using any 122
commercially reasonable method of resubmission, including 123
resubmission by facsimile, mail, or electronic means, as long as 124
the time period for resubmissions established by the relevant 125
payer has not expired.126

       Sec. 3901.413.  (A) Except as provided in division (B) of 127
this section, all of the following apply after a pharmacy audit is 128
completed:129

        (1) Not later than sixty business days after the audit is 130
completed, the auditing entity shall deliver a preliminary audit 131
report to the pharmacy that was the subject of the audit.132

       (2) A pharmacy that disputes any finding in the preliminary 133
audit report may submit documentation to the auditing entity to 134
appeal the finding. A pharmacy shall be given not less than thirty 135
business days to make the submission and may request an extension 136
of the time period given. The auditing entity shall grant a 137
request for an extension if it is reasonable.138

       A pharmacy's submission of documentation to appeal the 139
finding shall be made in accordance with the procedure the 140
auditing entity has established under section 3901.414 of the 141
Revised Code.142

       (3)(a) An auditing entity shall deliver a final audit report 143
to the pharmacy that was the subject of the audit. Except as 144
provided in division (A)(3)(b) of this section, the report shall 145
be delivered not later than one hundred twenty business days after 146
the later of a pharmacy's receipt of a preliminary audit report.147

       (b) If an auditing entity has granted a pharmacy's request 148
for an extension of the time to submit documentation to appeal a 149
finding in the preliminary audit report under division (A)(2) of 150
this section, the time limit described in division (A)(3)(a) of 151
this section for the delivery of the final audit report is waived. 152
Instead, the auditing entity shall deliver the final audit report 153
not later than one hundred twenty days after the pharmacy's 154
submission of the documentation.155

       (B) The provisions of division (A) of this section do not 156
apply if the auditing entity has evidence, from its review of 157
claims data, statements, or physical evidence or its use of other 158
investigative methods, indicating that fraud or other intentional 159
or willful misrepresentation exists.160

       Sec. 3901.414.  Each auditing entity in this state shall 161
establish in writing separate procedures for a pharmacy to appeal 162
one or more findings in a preliminary audit report issued under 163
section 3901.413 of the Revised Code.164