§ 3802 — Pharmacy rights during an audit

Notwithstanding any provision of law to the contrary, whenever a health insurer, a third-party payer, or an entity representing a responsible party conducts an audit of the records of a pharmacy, the pharmacy shall have a right to all of the following:
(1) To have an audit involving clinical or professional judgment be conducted by a pharmacist licensed to practice pharmacy in one or more states, who has at least a familiarity with Vermont pharmacy statutes and rules and who is employed by or working with an auditing entity.
(2) If an audit is to be conducted on-site at a pharmacy, the entity conducting the audit:
(A) shall give the pharmacy at least 14 days’ advance written notice of the audit and the specific prescriptions to be included in the audit;
(B) shall not audit a pharmacy on Mondays or on weeks containing a federal holiday, unless the pharmacy agrees to alternative timing for the audit; and
(C) shall not audit claims that:
(i) were submitted to the pharmacy benefit manager more than 18 months prior to the date of the audit, unless:
(I) required by federal law; or
(II) the originating prescription was dated within the 24- month period preceding the date of the audit; or
(ii) exceed 200 selected prescription claims.
(3) If any audit is to be conducted remotely, the entity conducting the audit:
(A) shall give the pharmacy at least seven business days following the pharmacy’s confirmation of receipt of the notice of the audit to respond to the audit; and
(B) shall not audit claims that:
(i) were submitted to the pharmacy benefit manager more than three months prior to the date of the audit or on a date earlier than that for which the pharmacy could electronically retransmit a corrected claim; or
(ii) exceed five selected prescription claims.
(4) To have auditors enter the prescription department only when accompanied by or authorized by a member of the pharmacy staff, and not to have auditors disrupt the provision of services to the pharmacy’s customers.
(5) Not to have clerical or recordkeeping errors, including typographical errors, scrivener’s errors, and computer errors, on a required document or record deemed fraudulent in the absence of any financial harm or other evidence; provided that this subdivision shall not be construed to prohibit recoupment of actual fraudulent payments.
(6) If required under the terms of the contract, to have the auditing entity provide to the pharmacy, upon request, all records related to the audit in an electronic or digital media format.
(7) In order to validate a pharmacy record with respect to a prescription or refill, to have the properly documented records of a hospital or of any person authorized by law to prescribe medication transmitted by any means of communication.
(8) To use any prescription that meets the requirements to be a legal prescription under Vermont law, including prescriber notations such as “as directed” and “as needed,” which require the professional judgment of the pharmacist to determine that the dose dispensed is within normal guidelines, to validate claims submitted for reimbursement for dispensing of original and refill prescriptions, or changes made to prescriptions.
(9) To dispense and receive reimbursement for the full quantity of the smallest commonly available commercially packaged product, including eye drops, insulin, and topical products, that contains the total amount required to be dispensed to meet the days’ supply ordered by the prescriber, even if the full quantity of the commercially prepared package exceeds the maximum days’ supply allowed.
(10) To determine the days’ supply using the highest daily total dose that may be utilized by the patient pursuant to the prescriber’s directions, and for prescriptions with a titrated dose schedule, to use the schedule to determine the days’ supply.
(11) To be subject to recoupment only following the correction of a claim and to have recoupment limited to amounts paid in excess of amounts payable under the corrected claim.
(12) Not to have a demand for recoupment, repayment, or offset against future reimbursement for overpayment of a claim for dispensing of an original or refill prescription include the dispensing fee, unless the prescription that is the subject of the claim was not actually dispensed, was not valid, was fraudulent, or was outside the provisions of the contract; provided that this subdivision shall not apply if a pharmacy is required to correct an error in a claim submitted in good faith.
(13) Unless otherwise agreed to by contract, not to have an audit finding or demand for recoupment, repayment, or offset against future reimbursement made for any claim for dispensing of an original or refill prescription due to information missing from a prescription or to information not placed in a particular location when the information or location is not required or specified by State or federal law. The pharmacy shall be allowed 30 days to document and correct the missing information.
(14) In the event the actual quantity dispensed on a valid prescription for a covered beneficiary exceeded the allowable maximum days’ supply of the product as defined in the contract, to have the amount to be recouped, repaid, or offset against future reimbursement limited to an amount calculated based on the quantity of the product dispensed found to be in excess of the allowed days’ supply quantity and using the cost of the product as reflected on the original claim.
(15) Not to have the accounting practice of extrapolation used in calculating any recoupment or penalty, unless otherwise required by federal law or by federal health plans.
(16) Except for cases of federal Food and Drug Administration regulation or drug manufacturer safety programs, to be free of recoupments based on either:
(A) documentation requirements in addition to or in excess of State Board of Pharmacy documentation creation or maintenance requirements; or
(B) a requirement that a pharmacy or pharmacist perform a professional duty in addition to or in excess of State Board of Pharmacy professional duty requirements.
(17) Except for Medicare claims, to be subject to reversals of approval for drug, prescriber, or patient eligibility upon adjudication of a claim only in cases in which the pharmacy obtained the adjudication by fraud or misrepresentation of claim elements.
(18) To be audited under the same standards and parameters as other similarly situated pharmacies audited by the same entity.
(19) To have the preliminary audit report delivered to the pharmacy within 30 days following the pharmacy’s preliminary response.
(20) To have at least 30 days following receipt of the preliminary audit report to produce documentation to address any discrepancy found during the audit.
(21) To have a final audit report delivered to the pharmacy within 30 days after the end of the appeals period, as required by section 3803 of this title.
(22) Except for audits initiated to address an identified problem, to be subject to no more than one audit per calendar year, unless fraud or misrepresentation is reasonably suspected.
(23) Not to have audit information from an audit conducted by one auditing entity shared with or utilized by another auditing entity, except as required by State or federal law.
(24) To have all payment data related to audited claims, including:
(A) payment amount;
(B) any direct and indirect remuneration (DIR) or generic effective rate (GER) fees assessed or other financial offsets;
(C) date of electronic payment or check date and number;
(D) the specific contracted reimbursement basis for each claim, including its basis, such as maximum allowable cost (MAC), wholesale acquisition cost (WAC), average wholesale price (AWP), or average manufacturer price (AMP); and
(E) the respective values used to calculate each claim payment. (Added 2011, No. 150 (Adj. Sess.), § 4; amended 2021, No. 131 (Adj. Sess.), § 3, eff. January 1, 2023.)