§1856.1. Pharmacy record audits; recoupment; appeals
A. As used in this Section, "entity" means a managed care company, insurance
company, third-party payor, or the representative of the managed care company including a
pharmacy benefit manager, insurance company, or third-party payor.
B. Notwithstanding any other provision of law to the contrary, when an audit of the
records of a pharmacy is conducted by an entity, the audit shall be conducted in accordance
with the following criteria:
(1)The audit may not take place during the first five days of the month.
(2)(a) No entity shall conduct an audit at a particular pharmacy more than one time
annually. However, the provisions of this Paragraph shall not apply when an entity must
return to a pharmacy to complete an audit already in progress,
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§1856.1. Pharmacy record audits; recoupment; appeals
A. As used in this Section, "entity" means a managed care company, insurance
company, third-party payor, or the representative of the managed care company including a
pharmacy benefit manager, insurance company, or third-party payor.
B. Notwithstanding any other provision of law to the contrary, when an audit of the
records of a pharmacy is conducted by an entity, the audit shall be conducted in accordance
with the following criteria:
(1) The audit may not take place during the first five days of the month.
(2)(a) No entity shall conduct an audit at a particular pharmacy more than one time
annually. However, the provisions of this Paragraph shall not apply when an entity must
return to a pharmacy to complete an audit already in progress, or there is an identified history
of errors, an identified activity which a reasonable man would believe to be inappropriate,
or illegal activity that the entity has brought to the attention of the pharmacy owner or
corporate headquarters of the pharmacy.
(b) Nothing in this Paragraph prohibits review of a claim filed by a pharmacy to
determine if the claim is payable or paid correctly. The review may require the submission
of prescription copies and other documentation related to the specific claims under review
but shall not require the pharmacy to provide any additional information not related to those
specific claims.
(3)(a) The entity or any vendor or subcontractor of the entity which conducts the
initial audit shall give the pharmacy notice at least two weeks before conducting the initial
audit for each audit cycle.
(b) If the audit, review, or investigation is initiated based on or involves alleged fraud
or willful misrepresentation, notice before the initial audit is not mandatory where it could
impede the audit, review, or investigation.
(4)(a)(i) Any clerical or record-keeping error, such as a typographical error,
scrivener's error, or computer error, regarding a required document or record shall not
necessarily constitute fraud.
(ii) A claim arising pursuant to the provisions of this Section may be subject to
recoupment.
(b) No claim arising pursuant to the provisions of this Section shall be subject to
criminal penalties without proof of intent to commit fraud.
(5) A pharmacy may provide the records of a hospital, physician, or other authorized
practitioner of the healing arts for drugs or medicinal supplies written or transmitted by any
means of communication for purposes of supporting the pharmacy record with respect to
orders or refills of a legend or narcotic drug.
(6) Each pharmacy shall be audited under the same standards and parameters as other
similarly situated pharmacies audited by the entity.
(7)(a) The preliminary audit report shall be delivered to the pharmacy within ninety
days after conclusion of the audit.
(b) A pharmacy shall be allowed at least thirty days following receipt of the
preliminary audit report in which to initiate an appeal to address any discrepancy found
during an audit, as provided in Subsection E of this Section.
(c) A final audit report shall be delivered to the pharmacy within one hundred twenty
days after receipt of the preliminary audit report or notice of appeal, whichever is later.
(d) Each entity conducting an audit shall make available a copy of the final audit
report to the plan sponsor upon request or as otherwise required by contractual agreement.
(8) Any audit which involves clinical judgment shall be conducted by or in
consultation with a pharmacist licensed in Louisiana.
(9) Interest on recoupment debts shall not accrue during the audit or appeal period.
(10) If the audit is conducted by a vendor or subcontractor of an entity, the vendor
or subcontractor shall identify to the pharmacy the entity on whose behalf the audit is being
conducted without necessity of this information being requested by the pharmacy.
(11) The audit shall be based only on information obtained by the entity conducting
the audit and not based on any audit report or other information gained from an audit
conducted by a different auditing entity. Nothing in this Paragraph shall prohibit an auditing
entity from using an earlier audit report prepared by that auditing entity for the same
pharmacy. Except as required by state or federal law, an entity conducting an audit may have
access to a pharmacy's previous audit report only if the previous report was prepared by that
entity.
C.(1) Recoupment of any disputed funds, or repayment of funds to the entity by the
pharmacy if permitted pursuant to contractual agreement, shall occur after final disposition
of the audit, including the appeals process. Recoupment shall not be based on documentation
requirements in addition to or exceeding requirements for creating or maintaining
documentation prescribed by the Louisiana Board of Pharmacy; or on a requirement that a
pharmacy or pharmacist perform a professional duty in addition to or exceeding professional
duties prescribed by the Louisiana Board of Pharmacy.
(2) The provisions of this Section shall not apply in cases of United States Food and
Drug Administration regulation or manufacturer safety programs.
(3)(a) The full amount of any recoupment on an audit shall be refunded to the
responsible party.
(b) Except as provided in this Subsection, a charge or assessment for an audit shall
not be based, directly or indirectly, on amounts recouped.
(c) Nothing in this Subsection shall be construed to prevent the entity conducting the
audit from charging or assessing the responsible party, directly or indirectly, based on
amounts recouped if both of the following conditions are met:
(i) The responsible party and the entity have a contract that explicitly states the
percentage charge or assessment to the responsible party.
(ii) A commission or other payment to an agent or employee of the entity conducting
the audit is not based, directly or indirectly, on amounts recouped.
(4) Before recoupment of funds may be made based on an audit finding overpayment
or underpayment, a final audit report shall be distributed.
D.(1) No pharmacy shall be subject to recoupment of any portion of the
reimbursement for the dispensed product of a prescription unless one or more of the
following has occurred at the point of adjudication:
(a) The pharmacy has engaged in fraudulent activity or other intentional and willful
misrepresentation, as evidenced by a review of claims data or statements, physical review,
or any other investigative method.
(b) The pharmacy has engaged in dispensing in excess of the benefit design, as
established by the plan sponsor.
(c) The pharmacy has not filled prescriptions in accordance with the prescriber's
order.
(d) The pharmacy has received an actual overpayment.
(2) Recoupment of claims shall be based on the actual financial harm to the entity,
or on the actual overpayment or underpayment, at the point of adjudication. A finding of an
overpayment that is the result of dispensing in excess of the benefit design, as established by
the plan sponsor, shall be calculated as the difference between what was dispensed in
accordance with the prescriber's orders and the dispensing requirements as set forth by the
benefit design. Calculations of overpayments shall not include dispensing fees unless one
or more of the following conditions has been satisfied:
(a) A prescription was not actually dispensed.
(b) The prescriber denied authorization.
(c) The prescription dispensed was a medication error by the pharmacy.
(d) The identified overpayment is based solely on an extra dispensing fee.
(e) The pharmacy was noncompliant with program guidelines.
(f) There was insufficient documentation.
(3) If any entity determines that the processed or adjudicated claim of a pharmacy
qualifies for recoupment based upon the use of manufacturer coupon or copay card, such
recoupment shall come from the beneficiary of the reduction if the product is approved by
the United States Food and Drug Administration through the new drug application process
or abbreviated new drug application, or is an investigational drug which is a biological
product as defined in R.S. 40:1169.3.
E.(1) Each entity conducting an audit shall establish an appeal process under which
a pharmacy may appeal an unfavorable preliminary audit report to the entity.
(2) If, following an appeal, the entity finds that an unfavorable audit report or any
portion of an unfavorable audit report is unsubstantiated, the entity shall dismiss the audit
report or the unsubstantiated portion of the audit report without any further proceedings.
(3) No interest shall be charged to the entity during the appeal period.
(4) Following the final audit report, and if not otherwise provided for in the provider
contract, either party may seek mediation to address outstanding disagreements.
(5) Notwithstanding any other provision of law to the contrary, the agency
conducting the audit shall not use the accounting practice of extrapolation in calculating
recoupment or penalties for audits, unless otherwise agreed to by the pharmacy or mandated
by a government agency or in the case of fraud.
F. Unless otherwise provided for in the network agreement, pharmacies or payors
may seek mediation to resolve contractual disputes related to pricing or audits.
G. This Section does not apply to either of the following:
(1) Any quality assurance review, as defined by the time period prior to the
reimbursement by the entity to the pharmacy.
(2) Any investigation, conforming with rules adopted by the commissioner, based
on or that involves suspected or alleged fraud, willful misrepresentation, or abuse.
H. The commissioner shall formulate and promulgate rules in accordance with the
Administrative Procedure Act that set forth standards for policies and procedures governing
the performance of pharmacy record audits, claims reviews and quality assurance reviews,
and fraud or willful misrepresentation audits.
NOTE: See Acts 2012, No. 856, §3, relative to applicability.