§ 280-C — Pharmacy audits by pharmacy benefit managers

§ 280-c. Pharmacy audits by pharmacy benefit managers. 1. Definitions.\nAs used in this section, the following terms shall have the following\nmeanings:\n (a) "Pharmacy benefit manager" shall have the same meaning as in\nsection two hundred eighty-a of this article.\n (b) "Pharmacy" shall mean a pharmacy that has contracted with a\npharmacy benefit manager for the provision of pharmacy services.\n 2. When conducting an audit of a pharmacy's records, a pharmacy\nbenefit manager shall:\n (a) not conduct an on-site audit of a pharmacy at any time during the\nfirst three calendar days of a month;\n (b) notify the pharmacy or its contracting agent no later than fifteen\ndays before the date of initial on-site audit. Such notification to the\npharmacy or its contracting agent shall be in writing delivered either\n(i) by mail or common carrier, return receipt requested, or (ii)\nelectronically with electronic receipt confirmation, addressed to the\nsupervising pharmacist of record and pharmacy corporate office where\napplicable, at least fifteen days before the date of an initial on-site\naudit;\n (c) limit the audit period to twenty-four months after the date a\nclaim is submitted to or adjudicated by the pharmacy benefit manager;\n (d) include in the written advance notice of an on-site audit the list\nof specific prescription numbers to be included in the audit that may or\nmay not include the final two digits of the prescription numbers;\n (e) use the written and verifiable records of a hospital, physician or\nother authorized practitioner, which are transmitted by any means of\ncommunication, to validate the pharmacy records in accordance with state\nand federal law;\n (f) limit the number of prescriptions audited to no more than one\nhundred randomly selected in a twelve-month period, except in cases of\nfraud;\n (g) provide the pharmacy or its contracting agent with a copy of the\npreliminary audit report within forty-five days after the conclusion of\nthe audit;\n (h) be allowed to conduct a follow-up audit on-site if a remote or\ndesk audit reveals the necessity for a review of additional claims;\n (i) in the case of invoice audits, accept as validation invoices from\nany wholesaler registered with the department of education from which\nthe pharmacy has purchased prescription drugs or, in the case of durable\nmedical equipment or sickroom supplies, invoices from an authorized\ndistributor other than a wholesaler;\n (j) provide the pharmacy or its contracting agent with the ability to\nprovide documentation to address a discrepancy or audit finding,\nprovided that such documentation must be received by the pharmacy\nbenefit manager no later than the forty-fifth day after the preliminary\naudit report was provided to the pharmacy or its contracting agent. The\npharmacy benefit manager shall consider a reasonable request from the\npharmacy for an extension of time to submit documentation to address or\ncorrect any findings in the report; and\n (k) provide the pharmacy or its contracting agent with the final audit\nreport no later than sixty days after the initial audit report was\nprovided to the pharmacy or its contracting agent.\n 3. Any claim that was retroactively denied for a clerical error,\ntypographical error, scrivener's error or computer error shall be paid\nif the prescription was properly and correctly dispensed, unless a\npattern of such errors exists, fraudulent billing is alleged or the\nerror results in actual financial loss to the entity. A clerical error\nis an error that does not result in actual financial harm to the covered\nentity or consumer and does not include the dispensing of an incorrect\ndose, amount or type of medication or dispensing a prescription drug to\nthe wrong person.\n 4. This section shall not apply to:\n (a) audits in which suspected fraudulent activity or other intentional\nor willful misrepresentation is evidenced by a physical review, review\nof claims data or statements, or other investigative methods; or\n (b) audits of claims paid for by federally funded programs; or\n (c) concurrent reviews or desk audits that occur within three business\ndays of transmission of a claim and where no chargeback or recoupment is\ndemanded.\n