As Reported by the House Rules and Reference Committee

130th General Assembly Regular Session 2013-2014

Am. Sub. S. B. No. 258

Senator Balderson 

Cosponsors: Senators Beagle, Brown, Coley, Gentile, Hite, LaRose, Lehner, Oelslager, Patton, Peterson, Schaffer, Uecker 

Representatives Brown, Bishoff, Wachtmann 

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A BILL

To amend sections 4725.01 and 4725.091 and to enact

1

sections 3901.81, 3901.811, 3901.812, 3901.813,

2

3901.814, and 3901.815 of the Revised Code to

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establish standards for the performance of

4

pharmacy audits in Ohio and to authorize the

5

continued use of certain analgesic controlled

6

substances in the practice of optometry.

7

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

Section 1.  That sections 4725.01 and 4725.091 be amended and	8
sections 3901.81, 3901.811, 3901.812, 3901.813, 3901.814, and	9
3901.815 of the Revised Code be enacted to read as follows:	10

Sec. 3901.81.  As used in this section and sections 3901.811	11
to 3901.815 of the Revised Code:	12

(A) "Auditing entity" means any person or government entity	13
that performs a pharmacy audit, including a payer, a pharmacy	14
benefit manager, or a third-party administrator licensed under	15
Chapter 3959. of the Revised Code.	16

(B) "Business day" means any day of the week excluding	17
Saturday, Sunday, and a legal holiday, as defined in section 1.14	18
of the Revised Code.	19

(C) "Concurrent review" means a claims review within five	20
business days of submission of claims for payment for the	21
provision of dangerous drugs for which the payer or the auditing	22
entity does not impose a penalty or demand to recoup money from	23
the pharmacy in any amount.	24

(D) "Dangerous drug," "pharmacy," "practice of pharmacy," and	25
"prescription" have the same meanings as in section 4729.01 of the	26
Revised Code.	27

(E) "Payer" means any of the following that pays for or	28
processes a claim for payment for the provision of dangerous drugs	29
or pharmacy services:	30

(1) A health insuring corporation, as defined in section	31
1751.01 of the Revised Code;	32

(2) A person authorized to engage in the business of sickness	33
and accident insurance under Title XXXIX of the Revised Code;	34

(3) A person or government entity providing coverage of	35
dangerous drugs or pharmacy services to individuals on a	36
self-insurance basis;	37

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

38

(5) A service benefit plan, as referenced in 42 U.S.C.	39
1396a(a)(25);	40

(6) A medicaid managed care organization that has entered	41
into a contract with the department of medicaid pursuant to	42
section 5167.10 of the Revised Code;	43

(7) Any other person or government entity that is, by law,	44
contract, or agreement, responsible for paying for or processing a	45
claim for payment for the provision of dangerous drugs or pharmacy	46
services.	47

(F) "Pharmacy audit" means a review of one or more pharmacy	48
records conducted by an auditing entity, one purpose of which is	49
to identify discrepancies in claims for payment for the provision	50
of dangerous drugs or pharmacy services. "Pharmacy audit" does not	51
include concurrent review.	52

(G) "Pharmacy benefit manager" means a person that provides	53
administrative services related to the processing of claims for	54
payment for the provision of dangerous drugs or pharmacy services,	55
including performing pharmacy audit compliance, negotiating	56
pharmaceutical rebate agreements, developing and managing drug	57
formularies and preferred drug lists, and administering programs	58
for payers' prior authorization of claims for payment for the	59
provision of dangerous drugs or pharmacy services.	60

(H) "Pharmacy record" means any record stored electronically	61
or as a hard copy by a pharmacy that relates to the provision of	62
dangerous drugs or pharmacy services or any other component of	63
pharmacist care that is included in the practice of pharmacy.	64

Sec. 3901.811.  (A) Except as provided in division (B) of	65
this section, an auditing entity is subject to all of the	66
following conditions when performing a pharmacy audit in this	67
state:	68

(1) If it is necessary that the pharmacy audit be performed	69
on the premises of a pharmacy, the auditing entity shall give the	70
pharmacy that is the subject of the audit written notice of the	71
date or dates on which the audit will be performed and the range	72
of prescription numbers from which the auditing entity will select	73
pharmacy records to audit. Notice of the date or dates on which	74
the audit will be performed shall be given not less than ten	75
business days before the date the audit is to commence. Notice of	76
the range of prescription numbers from which the auditing entity	77
will select pharmacy records to audit shall be received by the	78
pharmacy not less than seven business days before the date of the	79
audit is to commence.	80

(2) The auditing entity shall not include in the pharmacy	81
audit a review of a claim for payment for the provision of	82
dangerous drugs or pharmacy services if the date of the pharmacy's	83
initial submission of the claim for payment occurred more than	84
twenty-four months before the date the audit commences.	85

(3) Absent an indication that there was an error in the	86
dispensing of a drug, the auditing entity or payer shall not seek	87
to recoup from the pharmacy that is the subject of the audit any	88
amount that the pharmacy audit identifies as being the result of	89
clerical or recordkeeping errors in the absence of financial harm.	90
For purposes of this provision, an error in the dispensing of a	91
drug is any of the following: selecting an incorrect drug, issuing	92
incorrect directions, or dispensing a drug to the incorrect	93
patient.	94

(4) The auditing entity shall not use the accounting practice	95
of extrapolation when calculating a monetary penalty to be imposed	96
or amount to be recouped as the result of the pharmacy audit.	97

(B)(1) The condition in division (A)(1) of this section does	98
not apply if, prior to the audit, the auditing entity has	99
evidence, from its review of claims data, statements, or physical	100
evidence or its use of other investigative methods, indicating	101
that fraud or other intentional or willful misrepresentation	102
exists.	103

(2) The condition in division (A)(3) of this section does not	104
apply if the auditing entity has evidence, from its review of	105
claims data, statements, or physical evidence or its use of other	106
investigative methods, indicating that fraud or other intentional	107
or willful misrepresentation exists.	108

(3) Division (A)(4) of this section does not apply when the	109
accounting practice of extrapolation is required by state or	110
federal law.	111

Sec. 3901.812.  A pharmacy may do any of the following when a	112
pharmacy audit is performed:	113

(A) Validate a pharmacy record by using original or	114
photocopied records from hospitals, physicians, or other health	115
care providers;	116

(B) Validate one or more claims for payment for the provision	117
of dangerous drugs or pharmacy services by using either of the	118
following:	119

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

120

(2) An original prescription or photocopy of the prescription	121
in any form that constitutes a valid prescription in this state,	122
including a written prescription, a prescription made through an	123
electronic prescribing system, a prescription delivered by	124
facsimile, a prescription made by issuing an order for medication	125
administration, and the record a pharmacist maintains under	126
section 4729.37 of the Revised Code documenting a prescription	127
received by telephone.	128

(C) Resubmit a disputed or denied claim for payment using any	129
commercially reasonable method of resubmission, including	130
resubmission by facsimile, mail, or electronic means, as long as	131
the time period for resubmissions established by the relevant	132
payer has not expired.	133

Sec. 3901.813.  (A) Except as provided in division (B) of	134
this section, all of the following apply after a pharmacy audit is	135
completed:	136

(1) A pharmacy shall be given not less than thirty days from	137
the date of the on-site audit to provide the auditing entity any	138
additional information necessary to complete the preliminary audit	139
report.	140

(2) Not later than sixty business days after the audit is	141
completed, the auditing entity shall deliver a preliminary audit	142
report to the pharmacy that was the subject of the audit.	143

(3) A pharmacy that disputes any finding in the preliminary	144
audit report may submit documentation to the auditing entity to	145
appeal the finding. A pharmacy shall be given not less than thirty	146
business days to make the submission and may request an extension	147
of the time period given. The auditing entity shall grant a	148
request for an extension if it is reasonable.	149

A pharmacy's submission of documentation to appeal the	150
finding shall be made in accordance with the procedure the	151
auditing entity has established under section 3901.814 of the	152
Revised Code.	153

(4)(a) An auditing entity shall deliver a final audit report	154
to the pharmacy that was the subject of the audit. Except as	155
provided in division (A)(4)(b) of this section, the report shall	156
be delivered not later than one hundred twenty business days after	157
the pharmacy's receipt of a preliminary audit report.	158

(b) If an auditing entity has granted a pharmacy's request	159
for an extension of the time to submit documentation to appeal a	160
finding in the preliminary audit report under division (A)(3) of	161
this section, the time limit described in division (A)(4)(a) of	162
this section for the delivery of the final audit report is waived.	163
Instead, the auditing entity shall deliver the final audit report	164
not later than one hundred twenty days after the pharmacy's	165
submission of the documentation.	166

(B) The provisions of division (A) of this section do not	167
apply if the auditing entity has evidence, from its review of	168
claims data, statements, or physical evidence or its use of other	169
investigative methods, indicating that fraud or other intentional	170
or willful misrepresentation exists.	171

Sec. 3901.814.  Each auditing entity in this state shall	172
establish in writing separate procedures for a pharmacy to appeal	173
one or more findings in a preliminary audit report issued under	174
section 3901.813 of the Revised Code.	175

Sec. 3901.815.  Sections 3901.811 to 3901.814 of the Revised	176
Code shall not apply to an auditing entity that is a medicaid	177
managed care organization if application of those sections to the	178
entity would be in violation of federal law.	179

Sec. 4725.01.  As used in this chapter:

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(A)(1) The "practice of optometry" means the application of	181
optical principles, through technical methods and devices, in the	182
examination of human eyes for the purpose of ascertaining	183
departures from the normal, measuring their functional powers,	184
adapting optical accessories for the aid thereof, and detecting	185
ocular abnormalities that may be evidence of disease, pathology,	186
or injury.	187

(2) In the case of a licensed optometrist who holds a topical	188
ocular pharmaceutical agents certificate, the "practice of	189
optometry" has the same meaning as in division (A)(1) of this	190
section, except that it also includes administering topical ocular	191
pharmaceutical agents.	192

(3) In the case of a licensed optometrist who holds a	193
therapeutic pharmaceutical agents certificate, the "practice of	194
optometry" has the same meaning as in division (A)(1) of this	195
section, except that it also includes all of the following:	196

(a) Employing, applying, administering, and prescribing	197
instruments, devices, and procedures, other than invasive	198
procedures, for purpose of examination, investigation, diagnosis,	199
treatment, or prevention of any disease, injury, or other abnormal	200
condition of the visual system;	201

(b) Employing, applying, administering, and prescribing	202
topical ocular pharmaceutical agents;	203

(c) Employing, applying, administering, and prescribing	204
therapeutic pharmaceutical agents;	205

(d) Assisting an individual in determining the individual's	206
blood glucose level by using a commercially available	207
glucose-monitoring device. Nothing in this section precludes a	208
licensed optometrist who holds a therapeutic pharmaceutical agents	209
certificate from using any particular type of commercially	210
available glucose-monitoring device.	211

(B) "Topical ocular pharmaceutical agent" means a drug or	212
dangerous drug that is a topical drug and used in the practice of	213
optometry as follows:	214

(1) In the case of a licensed optometrist who holds a topical	215
ocular pharmaceutical agents certificate, for evaluative purposes	216
in the practice of optometry as set forth in division (A)(1) of	217
this section;	218

(2) In the case of a licensed optometrist who holds a	219
therapeutic pharmaceutical agents certificate, for purposes of	220
examination, investigation, diagnosis, treatment, or prevention of	221
any disease, injury, or other abnormal condition of the visual	222
system.	223

(C) "Therapeutic pharmaceutical agent" means a drug or	224
dangerous drug that is used for examination, investigation,	225
diagnosis, treatment, or prevention of any disease, injury, or	226
other abnormal condition of the visual system in the practice of	227
optometry by a licensed optometrist who holds a therapeutic	228
pharmaceutical agents certificate, and is any of the following:	229

(1) An oral drug or dangerous drug in one of the following	230
classifications:	231

(a) Anti-infectives, including antibiotics, antivirals,	232
antimicrobials, and antifungals;	233

(b) Anti-allergy agents;

234

(c) Antiglaucoma agents;

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(d) Analgesics, including only analgesic drugs that are	236
available without a prescription, analgesic drugs or dangerous	237
drugs that require a prescription but are not controlled	238
substances, and schedule IIIcontrolled substances, to the extent	239
authorized by the state board of optometry in rules adopted under	240
section 4725.091 of the Revised Code, analgesic controlled	241
substances;	242

(e) Anti-inflammatories, excluding all drugs or dangerous	243
drugs classified as oral steroids other than methylpredisolone, ,	244
except that methylpredisolone may be used under a therapeutic	245
pharmaceutical agents certificate only if it is prescribed under	246
all of the following conditions:	247

(i) For use in allergy cases;

248

(ii) For use by an individual who is eighteen years of age or	249
older;	250

(iii) On the basis of an individual's particular episode of	251
illness;	252

(iv) In an amount that does not exceed the amount packaged	253
for a single course of therapy.	254

(2) Epinephrine administered by injection to individuals in	255
emergency situations to counteract anaphylaxis or anaphylactic	256
shock. Notwithstanding any provision of this section to the	257
contrary, administration of epinephrine in this manner does not	258
constitute performance of an invasive procedure.	259

(3) An oral drug or dangerous drug that is not included under	260
division (C)(1) of this section, if the drug or dangerous drug is	261
approved, exempt from approval, certified, or exempt from	262
certification by the federal food and drug administration for	263
ophthalmic purposes and the drug or dangerous drug is specified in	264
rules adopted by the state board of optometry under section	265
4725.09 of the Revised Code.	266

(D) "Controlled substance" has the same meaning as in section	267
3719.01 of the Revised Code.	268

(E) "Drug" and "dangerous drug" have the same meanings as in	269
section 4729.01 of the Revised Code.	270

(F) "Invasive procedure" means any procedure that involves	271
cutting or otherwise infiltrating human tissue by mechanical means	272
including surgery, laser surgery, ionizing radiation, therapeutic	273
ultrasound, administering medication by injection, or the removal	274
of intraocular foreign bodies.	275

(G) "Visual system" means the human eye and its accessory or	276
subordinate anatomical parts.	277

(H) "Certificate of licensure" means a certificate issued by	278
the state board of optometry under section 4725.13 of the Revised	279
Code authorizing the holder to practice optometry as provided in	280
division (A)(1) of this section.	281

(I) "Topical ocular pharmaceutical agents certificate" means	282
a certificate issued by the state board of optometry under section	283
4725.13 of the Revised Code authorizing the holder to practice	284
optometry as provided in division (A)(2) of this section.	285

(J) "Therapeutic pharmaceutical agents certificate" means a	286
certificate issued by the state board of optometry under division	287
(A)(3) or (4) of section 4725.13 of the Revised Code authorizing	288
the holder to practice optometry as provided in division (A)(3) of	289
this section.	290

Sec. 4725.091. (A) The state board of optometry shall adopt	291
rules governing the authority of licensed optometrists practicing	292
under therapeutic pharmaceutical agents certificates to employ,	293
apply, administer, and prescribe schedule IIIanalgesic	294
controlled substances under a therapeutic pharmaceutical agents	295
certificate. The rules shall be adopted in accordance with Chapter	296
119. of the Revised Code and in consultation with the state board	297
of pharmacy.	298

(B) All of the following apply to the state board of	299
optometry in the adoption of rules under this section:	300

(1) The board shall not permit an optometrist to employ,	301
apply, administer, or prescribe a schedule IIIan analgesic	302
controlled substance other than a drug included in section 3719.41	303
of the Revised Code within the schedule III narcotics-narcotic	304
preparations category product that is used for the treatment of	305
pain and meets one of the following conditions:	306

(a) The product is a preparation that contains an amount of	307
codeine per dosage unit, as specified by the board, and also	308
contains other active, nonnarcotic ingredients, such as	309
acetaminophen or aspirin, in a therapeutic amount.	310

(b) The product is a preparation that contains an amount of	311
hydrocodone per dosage unit, as specified by the board, and also	312
contains other active, nonnarcotic ingredients, such as	313
acetaminophen, aspirin, or ibuprofen, in a therapeutic amount.	314

(c) The product contains or consists of a drug or dangerous	315
drug that was an analgesic included in the practice of optometry	316
under a therapeutic pharmaceutical agents certificate immediately	317
prior to the effective date of this amendment, was not a	318
controlled substance at that time, and subsequently becomes a	319
schedule II, III, IV, or V controlled substance.	320

(2) The board shall limit the schedule IIIanalgesic	321
controlled substances that optometrists may employ, apply,	322
administer, or prescribe to the drugs that the board determines	323
are appropriate for use in the practice of optometry under a	324
therapeutic pharmaceutical agents certificate.	325

(3) With regard to the prescribing of schedule IIIanalgesic	326
controlled substances, the board shall establish prescribing	327
standards to be followed by optometrists who hold therapeutic	328
pharmaceutical agents certificates. The board shall take into	329
account the prescribing standards that exist within the health	330
care marketplace.	331

(4) The board shall establish standards and procedures for	332
employing, applying, administering, and prescribing schedule III	333
analgesic controlled substances under a therapeutic	334
pharmaceutical agents certificate by taking into consideration and	335
examining issues that include the appropriate length of drug	336
therapy, appropriate standards for drug treatment, necessary	337
monitoring systems, and any other factors the board considers	338
relevant.	339

Section 2.  That existing sections 4725.01 and 4725.091 of	340
the Revised Code are hereby repealed.	341