§ 226 — Discrimination based on specialty practiced; risk classification; definitions

Section 226. (a) For the purposes of this section, the term "pharmacy
benefit manager" shall mean any person or entity that administers the (i)
prescription drug, prescription device or pharmacist services or (ii) prescription
drug and device and pharmacist services portion of a health benefit plan on
behalf of plan sponsors, including, but not limited to, self-insured employers,
insurance companies and labor unions. A health benefit plan that does not
contract with a pharmacy benefit manager shall be considered a pharmacy
benefit manager for the purposes of this section, unless specifically exempted.(b) A pharmacy benefit manager shall conduct an audit of the records of a
pharmacy in accordance with paragraphs (1) to (13), inclusive.(1) The contract between a pharmacy and a pharmacy benefit manager shall
identify and describe the audit procedures in detail.(2) With the exception of an investigative fraud audit, the auditor shall give
the pharmacy written notice at least 2 weeks prior to conducting the initial onsite
audit for each audit cycle.(3) A pharmacy benefit manager shall not audit claims beyond 2 years prior
to the date of audit.(4) The auditor shall not interfere with the delivery of pharmacist services to
a patient and shall make a reasonable effort to minimize the inconvenience and
disruption to the pharmacy operations during the audit process.(5) Any audit that involves clinical or professional judgment shall be conducted
by, or in consultation with, a licensed pharmacist from any state.(6) A finding of an overpayment or underpayment shall be based on the
actual overpayment or underpayment. A statistically sound calculation for
overpayment or underpayment may be used to determine recoupment as part of
a settlement as agreed to by the pharmacy.(7) The auditor shall audit each pharmacy under the same standards and
parameters with which they audit other similarly situated pharmacies.(8) An audit shall not be initiated or scheduled during the first 5 calendar
days of any month for any pharmacy that averages more than 600 prescriptions
per week without the pharmacy’s consent.(9) A preliminary audit report shall be delivered to the pharmacy not later
than 30 days after the conclusion of the audit.(10) The preliminary audit report shall be signed and shall include the
signature of any pharmacist participating in the audit.(11) A pharmacy benefit manager shall not withhold payment to a pharmacy
for reimbursement claims as a means to recoup money until after the final
internal disposition of an audit, including the appeals process, as provided in
subsection (c), unless fraud or misrepresentation is reasonably suspected or the
discrepant amount exceeds $15,000.(12) The auditor shall provide a copy of the final audit report to the pharmacy
and plan sponsor within 30 days following the pharmacy’s receipt of the signed
preliminary audit report or the completion of the appeals process, as provided in
subsection (c), whichever is later.(13) No auditing company or agent shall receive payment based upon a
percentage of the amount recovered or other financial incentive tied to the
findings of the audit.(c)(1) Each auditor shall establish an appeals process under which a pharmacy
may appeal findings in a preliminary audit.(2) To appeal a finding, a pharmacy may use the records of a hospital,
physician, or other authorized prescriber to validate the record with respect to
orders or refills of prescription drugs or devices.(3) A pharmacy shall have 30 days to appeal any discrepancy found during
the preliminary audit.(4) The National Council for Prescription Drug Programs or any other
recognized national industry standard shall be used to evaluate claims submission
and product size disputes.(5) If an audit results in the identification of any clerical or record-keeping
errors in a required document or record, the pharmacy shall not be subject to
recoupment of funds by the pharmacy benefit manager; provided, that the
pharmacy may provide proof that the patient received the medication billed to
the plan via patient signature logs or other acceptable methods, unless there is
financial harm to the plan or errors that exceed the normal course of business.(d) This section shall not apply to any audit or investigation of a pharmacy
that involves potential fraud, willful misrepresentation or abuse, including, but
not limited to, investigative audits or any other statutory or regulatory provision
which authorizes investigations relating to insurance fraud.(e) This section shall not apply to a public health care payer, as defined in
section 1 of chapter 12C.[ Subsection (f) effective until April 8, 2025. For text effective April 8, 2025,
see below.](f) The commissioner may promulgate regulations to enforce this section.[ Subsection (f) as amended by 2024, 342, Sec. 32 effective April 8, 2025. For
text effective until April 8, 2025, see above.](f) The commissioner shall promulgate regulations to enforce this section.