§ 5-19.1-35. Audits.
(a) When an on-site audit of the records of a pharmacy is conducted by a carrier or its
intermediary, the audit must be conducted in accordance with the following criteria:
(1) A finding of overpayment or underpayment must be based on the actual overpayment or
underpayment, and not a projection based on the number of patients served having a
similar diagnosis, or on the number of similar orders or refills for similar drugs,
unless the projected overpayment or denial is a part of a settlement agreed to by
the pharmacy or pharmacist;
(2) The auditor may not use extrapolation in calculating recoupments or penalties unless
required by state or federal laws or regulations;
(3) Any audit that involves clinical judgment must be conducted by, or in consultation
with, a pharmacist; and
(4) Each entity conducting an audit shall establish an appeal process under which a pharmacy
may appeal an unfavorable preliminary audit report to the entity.
(b) This section does not apply to any audit, review, or investigation that is initiated
based on or involving suspected or alleged fraud, willful misrepresentation, or abuse.
(c) Prior to an audit, the entity conducting an audit shall give the pharmacy fourteen
(14) days advance written notice of the audit and the range of prescription numbers
involved in the audit. The carrier or its intermediary may mask the last two digits
of the numbers. Additionally, the number of prescriptions shall not exceed one hundred
fifty (150) prescription claims and their applicable refills. The time allotted must
be adequate to collect all samples. The examination of signature logs shall not exceed
twenty-five (25) signature logs in number.
(d) A pharmacy has the right to execute the dispute resolution contained in their contract.
(e)(1) A preliminary audit report must be delivered to the pharmacy or its corporate office
within sixty (60) days after the conclusion of the audit. A pharmacy must be allowed
at least thirty (30) days following receipt of the preliminary audit to provide documentation
to address any discrepancy found in the audit. A final audit report must be delivered
to the pharmacy or its corporate office within ninety (90) days after receipt of the
preliminary audit report or final appeal, whichever is later. A charge-back recoupment
or other penalty may not be assessed until the appeal process provided by the pharmacy
benefits manager has been exhausted and the final report issued. If the identified
discrepancy for a single audit exceeds twenty-five thousand dollars ($25,000), future
payments in excess of that amount may be withheld pending the adjudication of an appeal.
Auditors shall only have access to previous audit reports on a particular pharmacy
conducted for the same entity.
(2) Auditors may initiate a desk audit prior to an on-site audit unless otherwise specified
in the law.
(3) Contracted auditors cannot be paid based on the findings within an audit.
(4) Scanned images of all prescriptions including all scheduled controlled substances
are allowed to be used by the pharmacist for an audit. Verbally received prescriptions
must be accepted upon validation by the auditing entity and applicable for the initial
desk or on-site audit.
(5) The period covered by an audit may not exceed two (2) years.
(6) Within five (5) business days of receiving the audit notification, pharmacies are
allowed, at a minimum, one opportunity to reschedule with the auditor if the scheduled
audit presents a scheduling conflict for the pharmacist.
(f) Any clerical error, typographical error, scrivener's error, or computer error regarding
a document or record does not constitute a willful violation and is not subject to
criminal penalties without proof of intent to commit fraud.
(g) Limitations.
(1) Exceptions. The provisions of this chapter do not apply to an investigative audit of pharmacy
records when:
(i) Fraud, waste, abuse, or other intentional misconduct is indicated by physical review
or review of claims data or statements; or
(ii) Other investigative methods indicate a pharmacy is or has been engaged in criminal
wrongdoing, fraud, or other intentional or willful misrepresentation.
(2) Frequency of audits. A pharmacy shall not be subject to more than one on-site audit in connection with
a carrier every twelve (12) months, unless there is an identified problem or fraud
or misrepresentation is suspected.
(3) Federal law. This chapter does not supersede any audit requirements established by federal law.
(h) Enforcement. The Rhode Island attorney general shall have the authority to enforce and ensure
compliance with this section.