Bill Text: TX HB1358 | 2013-2014 | 83rd Legislature | Enrolled
Bill Title: Relating to procedures for certain audits of pharmacists and pharmacies.
Spectrum: Slight Partisan Bill (Republican 5-3)
Status: (Passed) 2013-06-14 - Effective on 9/1/13 [HB1358 Detail]
Download: Texas-2013-HB1358-Enrolled.html
H.B. No. 1358 |
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relating to procedures for certain audits of pharmacists and | ||
pharmacies. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Chapter 1369, Insurance Code, is amended by | ||
adding Subchapter F to read as follows: | ||
SUBCHAPTER F. AUDITS OF PHARMACISTS AND PHARMACIES | ||
Sec. 1369.251. DEFINITIONS. In this subchapter: | ||
(1) "Desk audit" means an audit conducted by a health | ||
benefit plan issuer or pharmacy benefit manager at a location other | ||
than the location of the pharmacist or pharmacy. The term includes | ||
an audit performed at the offices of the plan issuer or pharmacy | ||
benefit manager during which the pharmacist or pharmacy provides | ||
requested documents for review by hard copy or by microfiche, disk, | ||
or other electronic media. The term does not include a review | ||
conducted not later than the third business day after the date a | ||
claim is adjudicated provided recoupment is not demanded. | ||
(2) "Extrapolation" means a mathematical process or | ||
technique used by a health benefit plan issuer or pharmacy benefit | ||
manager that administers pharmacy claims for a health benefit plan | ||
issuer in the audit of a pharmacy or pharmacist to estimate audit | ||
results or findings for a larger batch or group of claims not | ||
reviewed by the plan issuer or pharmacy benefit manager. | ||
(3) "Health benefit plan" means a plan that provides | ||
benefits for medical, surgical, or other treatment expenses | ||
incurred as a result of a health condition, a mental health | ||
condition, an accident, sickness, or substance abuse, including: | ||
(A) an individual, group, blanket, or franchise | ||
insurance policy or insurance agreement, a group hospital service | ||
contract, or an individual or group evidence of coverage or similar | ||
coverage document that is issued by: | ||
(i) an insurance company; | ||
(ii) a group hospital service corporation | ||
operating under Chapter 842; | ||
(iii) a health maintenance organization | ||
operating under Chapter 843; | ||
(iv) an approved nonprofit health | ||
corporation that holds a certificate of authority under Chapter | ||
844; | ||
(v) a multiple employer welfare arrangement | ||
that holds a certificate of authority under Chapter 846; | ||
(vi) a stipulated premium company operating | ||
under Chapter 884; | ||
(vii) a fraternal benefit society operating | ||
under Chapter 885; | ||
(viii) a Lloyd's plan operating under | ||
Chapter 941; or | ||
(ix) an exchange operating under Chapter | ||
942; | ||
(B) a small employer health benefit plan written | ||
under Chapter 1501; or | ||
(C) a health benefit plan issued under Chapter | ||
1551, 1575, 1579, or 1601. | ||
(4) "On-site audit" means an audit that is conducted | ||
at: | ||
(A) the location of the pharmacist or pharmacy; | ||
or | ||
(B) another location at which the records under | ||
review are stored. | ||
(5) "Pharmacy benefit manager" has the meaning | ||
assigned by Section 4151.151. | ||
Sec. 1369.252. EXCEPTIONS TO APPLICABILITY OF SUBCHAPTER. | ||
This subchapter does not apply to an issuer or provider of health | ||
benefits under or a pharmacy benefit manager administering pharmacy | ||
benefits under: | ||
(1) the state Medicaid program; | ||
(2) the federal Medicare program; | ||
(3) the state child health plan or health benefits | ||
plan for children under Chapter 62 or 63, Health and Safety Code; | ||
(4) the TRICARE military health system; | ||
(5) a workers' compensation insurance policy or other | ||
form of providing medical benefits under Title 5, Labor Code; or | ||
(6) a self-funded health benefit plan as defined by | ||
the Employee Retirement Income Security Act of 1974 (29 U.S.C. | ||
Section 1001 et seq.). | ||
Sec. 1369.253. CONFLICT WITH OTHER LAWS. If there is a | ||
conflict between this subchapter and a provision of Chapter 843 or | ||
1301 related to a pharmacy benefit manager, this subchapter | ||
prevails. | ||
Sec. 1369.254. AUDIT OF PHARMACIST OR PHARMACY; NOTICE; | ||
GENERAL PROVISIONS. (a) Except as provided by Subsection (d), a | ||
health benefit plan issuer or pharmacy benefit manager that | ||
performs an on-site audit under this subchapter of a pharmacist or | ||
pharmacy shall provide the pharmacist or pharmacy reasonable notice | ||
of the audit and accommodate the pharmacist's or pharmacy's | ||
schedule to the greatest extent possible. The notice required | ||
under this subsection must be in writing and must be sent by a means | ||
that allows tracking of delivery to the pharmacist or pharmacy not | ||
later than the 14th day before the date on which the on-site audit | ||
is scheduled to occur. | ||
(b) Not later than the seventh day after the date a | ||
pharmacist or pharmacy receives notice under Subsection (a), the | ||
pharmacist or pharmacy may request that an on-site audit be | ||
rescheduled to a mutually convenient date. The request must be | ||
reasonably granted. | ||
(c) Unless the pharmacist or pharmacy consents in writing, a | ||
health benefit plan issuer or pharmacy benefit manager may not | ||
schedule or have an on-site audit conducted: | ||
(1) except as provided by Subsection (d), before the | ||
14th day after the date the pharmacist or pharmacy receives notice | ||
under Subsection (a), if applicable; | ||
(2) more than twice annually in connection with a | ||
particular payor; or | ||
(3) during the first five calendar days of January and | ||
December. | ||
(d) A health benefit plan issuer or pharmacy benefit manager | ||
is not required to provide notice before conducting an audit if, | ||
after reviewing claims data, written or oral statements of pharmacy | ||
staff, wholesalers, or others, or other investigative information, | ||
including patient referrals, anonymous reports, or postings on | ||
Internet websites, the plan issuer or pharmacy benefit manager | ||
suspects the pharmacist or pharmacy subject to the audit committed | ||
fraud or made an intentional misrepresentation related to the | ||
pharmacy business. The pharmacist or pharmacy may not request that | ||
the audit be rescheduled under Subsection (b). | ||
(e) A pharmacist or pharmacy may be required to submit | ||
documents in response to a desk audit not earlier than the 20th day | ||
after the date the health benefit plan issuer or pharmacy benefit | ||
manager requests the documents. | ||
(f) A contract between a pharmacist or pharmacy and a health | ||
benefit plan issuer or pharmacy benefit manager must state detailed | ||
audit procedures. If a health benefit plan issuer or pharmacy | ||
benefit manager proposes a change to the audit procedures for an | ||
on-site audit or a desk audit, the plan issuer or pharmacy benefit | ||
manager must notify the pharmacist or pharmacy in writing of a | ||
change in an audit procedure not later than the 60th day before the | ||
effective date of the change. | ||
(g) The list of the claims subject to an on-site audit must | ||
be provided in the notice under Subsection (a) to the pharmacist or | ||
pharmacy and must identify the claims only by the prescription | ||
numbers or a date range for prescriptions subject to the audit. The | ||
last two digits of the prescription numbers provided may be | ||
omitted. | ||
(h) If the health benefit plan issuer or pharmacy benefit | ||
manager in an on-site audit or a desk audit applies random sampling | ||
procedures to select claims for audit, the sample size may not be | ||
greater than 300 individual prescription claims. | ||
Sec. 1369.255. COMPLETION OF AUDIT. An audit of a claim | ||
under Section 1369.254 must be completed on or before the one-year | ||
anniversary of the date the claim is received by the health benefit | ||
plan issuer or pharmacy benefit manager. | ||
Sec. 1369.256. AUDIT REQUIRING PROFESSIONAL JUDGMENT. A | ||
health benefit plan issuer or pharmacy benefit manager that | ||
conducts an on-site audit or a desk audit involving a pharmacist's | ||
clinical or professional judgment must conduct the audit in | ||
consultation with a licensed pharmacist. | ||
Sec. 1369.257. ACCESS TO PHARMACY AREA. A health benefit | ||
plan issuer or pharmacy benefit manager that conducts an on-site | ||
audit may not enter the pharmacy area unless escorted by an | ||
individual authorized by the pharmacist or pharmacy. | ||
Sec. 1369.258. VALIDATION USING CERTAIN RECORDS | ||
AUTHORIZED. A pharmacist or pharmacy that is being audited may: | ||
(1) validate a prescription, refill of a prescription, | ||
or change in a prescription with a prescription that complies with | ||
applicable federal laws and regulations and state laws and rules | ||
adopted under Section 554.051, Occupations Code; and | ||
(2) validate the delivery of a prescription with a | ||
written record of a hospital, physician, or other authorized | ||
practitioner of the healing arts. | ||
Sec. 1369.259. CALCULATION OF RECOUPMENT; USE OF | ||
EXTRAPOLATION PROHIBITED. (a) A health benefit plan issuer or | ||
pharmacy benefit manager may not calculate the amount of a | ||
recoupment based on: | ||
(1) an absence of documentation the pharmacist or | ||
pharmacy is not required by applicable federal laws and regulations | ||
and state laws and rules to maintain; or | ||
(2) an error that does not result in actual financial | ||
harm to the patient or enrollee, the health benefit plan issuer, or | ||
the pharmacy benefit manager. | ||
(b) A health benefit plan issuer or pharmacy benefit manager | ||
may not require extrapolation audits as a condition of | ||
participation in a contract, network, or program for a pharmacist | ||
or pharmacy. | ||
(c) A health benefit plan issuer or pharmacy benefit manager | ||
may not use extrapolation to complete an on-site audit or a desk | ||
audit of a pharmacist or pharmacy. Notwithstanding Subsection | ||
(a)(2), the amount of a recoupment must be based on the actual | ||
overpayment or underpayment and may not be based on an | ||
extrapolation. | ||
(d) A health benefit plan issuer or pharmacy benefit manager | ||
may not include a dispensing fee amount in the calculation of an | ||
overpayment unless: | ||
(1) the fee was a duplicate charge; | ||
(2) the prescription for which the fee was charged: | ||
(A) was not dispensed; or | ||
(B) was dispensed: | ||
(i) without the prescriber's authorization; | ||
(ii) to the wrong patient; or | ||
(iii) with the wrong instructions; or | ||
(3) the wrong drug was dispensed. | ||
Sec. 1369.260. CLERICAL OR RECORDKEEPING ERROR; FRAUD | ||
ALLEGATION. (a) An unintentional clerical or recordkeeping error, | ||
such as a typographical error, scrivener's error, or computer | ||
error, found during an on-site audit or a desk audit: | ||
(1) is not prima facie evidence of fraud or | ||
intentional misrepresentation; and | ||
(2) may not be the basis of a recoupment unless the | ||
error results in actual financial harm to a patient or enrollee, | ||
health benefit plan issuer, or pharmacy benefit manager. | ||
(b) If the health benefit plan issuer or pharmacy benefit | ||
manager alleges that the pharmacist or pharmacy committed fraud or | ||
intentional misrepresentation described by Subsection (a), the | ||
health benefit plan issuer or pharmacy benefit manager must state | ||
the allegation in the final audit report required by Section | ||
1369.264. | ||
(c) After an audit is initiated, a pharmacist or pharmacy | ||
may resubmit a claim described by Subsection (a) if the deadline for | ||
submission of a claim under Section 843.337 or 1301.102 has not | ||
expired. | ||
Sec. 1369.261. ACCESS TO PREVIOUS AUDIT REPORTS; UNIFORM | ||
AUDIT STANDARDS. (a) Except as provided by Subsection (b), a | ||
health benefit plan issuer or pharmacy benefit manager may have | ||
access to an audit report of a pharmacist or pharmacy only if the | ||
report was prepared in connection with an audit conducted by the | ||
health benefit plan issuer or pharmacy benefit manager. | ||
(b) A health benefit plan issuer or pharmacy benefit manager | ||
may have access to audit reports other than the reports described by | ||
Subsection (a) if, after reviewing claims data, written or oral | ||
statements of pharmacy staff, wholesalers, or others, or other | ||
investigative information, including patient referrals, anonymous | ||
reports, or postings on Internet websites, the plan issuer or the | ||
pharmacy benefit manager suspects the audited pharmacist or | ||
pharmacy committed fraud or made an intentional misrepresentation | ||
related to the pharmacy business. | ||
(c) An auditor must conduct an on-site audit or a desk audit | ||
of similarly situated pharmacists or pharmacies under the same | ||
audit standards. | ||
Sec. 1369.262. COMPENSATION OF AUDITOR. An individual | ||
performing an on-site audit or a desk audit may not directly or | ||
indirectly receive compensation based on a percentage of the amount | ||
recovered as a result of the audit. | ||
Sec. 1369.263. CONCLUSION OF AUDIT; SUMMARY; PRELIMINARY | ||
AUDIT REPORT. (a) At the conclusion of an on-site audit or a desk | ||
audit, the health benefit plan issuer or pharmacy benefit manager | ||
shall: | ||
(1) provide to the pharmacist or pharmacy a summary of | ||
the audit findings; and | ||
(2) allow the pharmacist or pharmacy to respond to | ||
questions and alleged discrepancies, if any, and comment on and | ||
clarify the findings. | ||
(b) Not later than the 60th day after the date the audit is | ||
concluded, the health benefit plan issuer or pharmacy benefit | ||
manager shall send by a means that allows tracking of delivery to | ||
the pharmacist or pharmacy a preliminary audit report stating the | ||
results of the audit and a list identifying documentation, if any, | ||
required to resolve discrepancies, if any, found as a result of the | ||
audit. | ||
(c) The pharmacist or pharmacy may, by providing | ||
documentation or otherwise, challenge a result or remedy a | ||
discrepancy stated in the preliminary audit report not later than | ||
the 30th day after the date the pharmacist or pharmacy receives the | ||
report. | ||
(d) The pharmacist or pharmacy may request an extension to | ||
provide documentation supporting a challenge. The request shall be | ||
reasonably granted. A health benefit plan issuer or pharmacy | ||
benefit manager that grants an extension is not subject to the | ||
deadline to send the final audit report under Section 1369.264. | ||
Sec. 1369.264. FINAL AUDIT REPORT. Not later than the 120th | ||
day after the date the pharmacist or pharmacy receives a | ||
preliminary audit report under Section 1369.263, the health benefit | ||
plan issuer or pharmacy benefit manager shall send by a means that | ||
allows tracking of delivery to the pharmacist or pharmacy a final | ||
audit report that states: | ||
(1) the audit results after review of the | ||
documentation submitted by the pharmacist or pharmacy in response | ||
to the preliminary audit report; and | ||
(2) the audit results, including a description of all | ||
alleged discrepancies and explanations for and the amount of | ||
recoupments claimed after consideration of the pharmacist's or | ||
pharmacy's response to the preliminary audit report. | ||
Sec. 1369.265. CERTAIN AUDITS EXEMPT FROM DEADLINES. A | ||
health benefit plan issuer or pharmacy benefit manager is not | ||
subject to the deadlines for sending a report under Sections | ||
1369.263 and 1369.264 if, after reviewing claims data, written or | ||
oral statements of pharmacy staff, wholesalers, or others, or other | ||
investigative information, including patient referrals, anonymous | ||
reports, or postings on Internet websites, the plan issuer or | ||
pharmacy benefit manager suspects the audited pharmacist or | ||
pharmacy committed fraud or made an intentional misrepresentation | ||
related to the pharmacy business. | ||
Sec. 1369.266. RECOUPMENT AND INTEREST CHARGED AFTER AUDIT. | ||
(a) If an audit under this subchapter is conducted, the health | ||
benefit plan issuer or pharmacy benefit manager: | ||
(1) may recoup from the pharmacist or pharmacy an | ||
amount based only on a final audit report; and | ||
(2) may not accrue or assess interest on an amount due | ||
until the date the pharmacist or pharmacy receives the final audit | ||
report under Section 1369.264. | ||
(b) The limitations on recoupment and interest accrual or | ||
assessment under Subsection (a) do not apply to a health benefit | ||
plan issuer or pharmacy benefit manager that, after reviewing | ||
claims data, written or oral statements of pharmacy staff, | ||
wholesalers, or others, or other investigative information, | ||
including patient referrals, anonymous reports, or postings on | ||
Internet websites, suspects the audited pharmacist or pharmacy | ||
committed fraud or made an intentional misrepresentation related to | ||
the pharmacy business. | ||
Sec. 1369.267. WAIVER PROHIBITED. The provisions of this | ||
subchapter may not be waived, voided, or nullified by contract. | ||
Sec. 1369.268. REMEDIES NOT EXCLUSIVE. This subchapter may | ||
not be construed to waive a remedy at law available to a pharmacist | ||
or pharmacy. | ||
Sec. 1369.269. ENFORCEMENT; RULES. The commissioner may | ||
enforce this subchapter and adopt and enforce reasonable rules | ||
necessary to accomplish the purposes of this subchapter. | ||
Sec. 1369.270. LEGISLATIVE DECLARATION. Except as provided | ||
by Section 1369.252, it is the intent of the legislature that the | ||
requirements contained in this subchapter regarding the audit of | ||
claims to providers who are pharmacists or pharmacies apply to all | ||
health benefit plan issuers and pharmacy benefit managers unless | ||
otherwise prohibited by federal law. | ||
SECTION 2. Section 1301.001, Insurance Code, as amended by | ||
Chapters 288 (H.B. 1772) and 798 (H.B. 2292), Acts of the 82nd | ||
Legislature, Regular Session, 2011, is amended by reenacting and | ||
amending Subdivision (1) and reenacting Subdivision (1-a) to read | ||
as follows: | ||
(1) "Exclusive provider benefit plan" means a benefit | ||
plan in which an insurer excludes benefits to an insured for some or | ||
all services, other than emergency care services required under | ||
Section 1301.155, provided by a physician or health care provider | ||
who is not a preferred provider. [ |
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(1-a) "Health care provider" means a practitioner, | ||
institutional provider, or other person or organization that | ||
furnishes health care services and that is licensed or otherwise | ||
authorized to practice in this state. The term includes a | ||
pharmacist and a pharmacy. The term does not include a physician. | ||
SECTION 3. The following provisions of the Insurance Code | ||
are repealed: | ||
(1) Section 843.002(9-a); | ||
(2) Section 843.3401; and | ||
(3) Section 1301.1041. | ||
SECTION 4. The changes in law made by this Act apply only to | ||
contracts between a pharmacist or pharmacy and a health benefit | ||
plan issuer or pharmacy benefit manager executed or renewed, and | ||
audits conducted under those contracts, on or after the effective | ||
date of this Act. Contracts entered into or renewed, and audits | ||
conducted under those contracts, before the effective date of this | ||
Act are governed by the law in effect immediately before the | ||
effective date of this Act, and that law is continued in effect for | ||
that purpose. | ||
SECTION 5. This Act takes effect September 1, 2013. | ||
______________________________ | ______________________________ | |
President of the Senate | Speaker of the House | |
I certify that H.B. No. 1358 was passed by the House on May 2, | ||
2013, by the following vote: Yeas 141, Nays 0, 2 present, not | ||
voting. | ||
______________________________ | ||
Chief Clerk of the House | ||
I certify that H.B. No. 1358 was passed by the Senate on May | ||
20, 2013, by the following vote: Yeas 31, Nays 0. | ||
______________________________ | ||
Secretary of the Senate | ||
APPROVED: _____________________ | ||
Date | ||
_____________________ | ||
Governor |