Bill Text: NY S02763 | 2017-2018 | General Assembly | Amended
Bill Title: Enacts provisions governing the conduct of audits of pharmacies by pharmacy benefit managers; provides timeframes for reports, specifies documentation to be used; exempts certain investigations.
Sponsorship: Bipartisan Bill
Status: (Engrossed - Dead) 2018-01-03 - REFERRED TO HEALTH [S02763 Detail]
Download: New_York-2017-S02763-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 2763--A 2017-2018 Regular Sessions IN SENATE January 17, 2017 ___________ Introduced by Sen. GOLDEN -- read twice and ordered printed, and when printed to be committed to the Committee on Health -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the public health law, in relation to audits of pharma- cies The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The public health law is amended by adding a new section 2 280-c to read as follows: 3 § 280-c. Pharmacy audits by pharmacy benefit managers. 1. Defi- 4 nitions. As used in this section, the following terms shall have the 5 following meanings: 6 (a) "Pharmacy benefit manager" shall have the same meaning as in 7 section two hundred eighty-a of this article. 8 (b) "Pharmacy" shall mean a pharmacy that has contracted with a phar- 9 macy benefit manager for the provision of pharmacy services. 10 2. When conducting an audit of a pharmacy's records, a pharmacy bene- 11 fit manager shall: 12 (a) not conduct an on-site audit of a pharmacy at any time during the 13 first three calendar days of a month; 14 (b) notify the pharmacy or its contracting agent no later than fifteen 15 days before the date of initial on-site audit. Such notification to the 16 pharmacy or its contracting agent shall be in writing delivered either 17 (i) by mail or common carrier, return receipt requested, or (ii) elec- 18 tronically with electronic receipt confirmation, addressed to the super- 19 vising pharmacist of record and pharmacy corporate office where applica- 20 ble, at least fifteen days before the date of an initial on-site audit; 21 (c) limit the audit period to twenty-four months after the date a 22 claim is submitted to or adjudicated by the pharmacy benefit manager; EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD06021-03-7S. 2763--A 2 1 (d) include in the written advance notice of an on-site audit the list 2 of specific prescription numbers to be included in the audit that may or 3 may not include the final two digits of the prescription numbers; 4 (e) use the written and verifiable records of a hospital, physician or 5 other authorized practitioner, which are transmitted by any means of 6 communication, to validate the pharmacy records in accordance with state 7 and federal law; 8 (f) limit the number of prescriptions audited to no more than one 9 hundred randomly selected in a twelve-month period, except in cases of 10 fraud; 11 (g) provide the pharmacy or its contracting agent with a copy of the 12 preliminary audit report within forty-five days after the conclusion of 13 the audit; 14 (h) be allowed to conduct a follow-up audit on-site if a remote or 15 desk audit reveals the necessity for a review of additional claims; 16 (i) in the case of invoice audits, accept as validation invoices from 17 any wholesaler registered with the department of education from which 18 the pharmacy has purchased prescription drugs or, in the case of durable 19 medical equipment or sickroom supplies, invoices from an authorized 20 distributor other than a wholesaler; 21 (j) provide the pharmacy or its contracting agent with the ability to 22 provide documentation to address a discrepancy or audit finding, 23 provided that such documentation must be received by the pharmacy bene- 24 fit manager no later than the forty-fifth day after the preliminary 25 audit report was provided to the pharmacy or its contracting agent. The 26 pharmacy benefit manager shall consider a reasonable request from the 27 pharmacy for an extension of time to submit documentation to address or 28 correct any findings in the report; and 29 (k) provide the pharmacy or its contracting agent with the final audit 30 report no later than sixty days after the initial audit report was 31 provided to the pharmacy or its contracting agent. 32 3. Any claim that was retroactively denied for a clerical error, typo- 33 graphical error, scrivener's error or computer error shall be paid if 34 the prescription was properly and correctly dispensed, unless a pattern 35 of such errors exists, fraudulent billing is alleged or the error 36 results in actual financial loss to the entity. A clerical error is an 37 error that does not result in actual financial harm to the covered enti- 38 ty or consumer and does not include the dispensing of an incorrect dose, 39 amount or type of medication or dispensing a prescription drug to the 40 wrong person. 41 4. This section shall not apply to: 42 (a) audits in which suspected fraudulent activity or other intentional 43 or willful misrepresentation is evidenced by a physical review, review 44 of claims data or statements, or other investigative methods; or 45 (b) audits of claims paid for by federally funded programs; or 46 (c) concurrent reviews or desk audits that occur within three business 47 days of transmission of a claim and where no chargeback or recoupment is 48 demanded. 49 § 2. This act shall take effect on the sixtieth day after it shall 50 have become a law.
