Iowa Admin. Code r. 191-59.4 - Audits of pharmacies by pharmacy benefits managers
(1) An audit of pharmacy records by a
pharmacy benefits manager shall be conducted in accordance with the following:
a. The pharmacy benefits manager conducting
the initial on-site audit must provide the pharmacy written notice at least one
week prior to conducting any audit;
b. Any audit which involves clinical or
professional judgment must be conducted by or in consultation with a pharmacist
as defined in Iowa Code section
155A3.;
c. When a pharmacy benefits manager alleges
an error in reimbursement has been made to a pharmacy, the pharmacy benefits
manager shall provide the pharmacy sufficient documentation to determine the
specific claims included in the alleged error;
d. A pharmacy may use the records of a
hospital, physician or other authorized practitioner of the healing arts for
prescription drugs or medicinal supplies, written or transmitted by any means
of communication, for purposes of validating the pharmacy record with respect
to orders or refills of a drug dispensed pursuant to a prescription;
e. Each pharmacy shall be audited under the
same standards and parameters as other similarly situated pharmacies audited by
the pharmacy benefits manager;
f.
The period covered by an audit may not exceed two years from the date on which
the claim was submitted to or adjudicated by a managed care company, insurance
company, third-party payor, or any pharmacy benefits manager that represents
such entities;
g. Unless otherwise
consented to by the pharmacy, an audit may not be initiated or scheduled during
the first seven calendar days of any month due to the high volume of
prescriptions filled during that time;
h. The preliminary audit report must be
delivered to the pharmacy within 120 days after conclusion of the audit. A
final written audit report shall be received by the pharmacy within six months
of the preliminary audit report or final appeal, whichever is later;
i. A pharmacy shall be allowed at least 30
days following receipt of the preliminary audit report in which to produce
documentation to address any discrepancy found during an audit; and
j. If it is determined by the pharmacy
benefits manager that an error in reimbursement to a pharmacy occurred, the
following criteria apply:
(1) For each
contract between the pharmacy benefits manager and the pharmacy existing on or
after January 1,2015, a pharmacy's usual and customary price for compounded
medications is considered the reimbursable cost, unless the contract between
the pharmacy benefits manager and the pharmacy specifically provides details
for a pricing methodology for compounded medications.
(2) A finding of error in reimbursement must
be based on the actual error in reimbursement and not be based on a projection
of the number of patients served having a similar diagnosis or on a projection
of the number of similar orders or refills for similar prescription
drugs.
(3) Calculations of errors
in reimbursement must not include dispensing fees unless: prescriptions were
not actually dispensed, the prescriber denied authorizations, the prescriptions
dispensed were medication errors by the pharmacy, or the amounts of the
dispensing fees were incorrect.
(4)
Any clerical or record-keeping error of the pharmacy, including but not limited
to a typographical error, scrivener's error, or computer error, regarding a
required document or record shall not be considered fraud by the pharmacy under
paragraph 59.6(3)"a" or under a pharmacy's contract with the
pharmacy benefits manager.
(5) In
the case of an error that has no actual financial harm to the patient or
covered entity, the pharmacy benefits manager shall not assess a charge against
the pharmacy.
(6) If a pharmacy has
entered into a corrective action plan with a pharmacy benefits manager, and if
the pharmacy fails to comply with the corrective action plan in a manner that
results in overpayments being made by the pharmacy benefits manager to the
pharmacy, the pharmacy benefits manager may recover the overpaid amounts. For
purposes of this paragraph, "corrective action plan" means an agreement entered
into by a pharmacy benefits manager and a pharmacy which is intended to promote
accurate submission and payment of pharmacy claims.
(7) During the audit period, interest on any
outstanding balance shall not accrue for the pharmacy benefits manager or the
pharmacy. For purposes of this rule, the audit period begins with the notice of
the audit and ends with a final determination of the audit report.
(2) Notwithstanding any
other provision in this rule, the entity conducting the audit shall not use the
accounting practice of extrapolation in calculating the recoupment or
contractual penalties for audits unless required by state or federal laws or
regulations. The entity may not use the accounting practice of extrapolation in
a manner more stringent than that required by state or federal laws or
regulations.
(3) Recoupment of any
disputed funds shall occur only after final disposition of the audit, including
the appeals process as set forth in subrules 59.4(4) and 59.4(5).
(4) Each pharmacy benefits manager conducting
an audit shall establish an appeals process under which a pharmacy may appeal
an unfavorable preliminary audit report to the pharmacy benefits manager. The
pharmacy benefits manager shall conduct a review of the unfavorable preliminary
audit report. The cost of the audit review shall be paid by the pharmacy
benefits manager. If, following the review, the pharmacy benefits manager finds
that an unfavorable audit report or any portion thereof is unsubstantiated, the
pharmacy benefits manager shall dismiss the unsubstantiated audit report or
unsubstantiated portion of the audit report without the necessity of any
further proceedings.
(5) A pharmacy
benefits manager shall establish a process for an independent third-party
review of final audit findings. If, following the appeal of an audit report and
upon conducting an audit review, the pharmacy benefits manager finds that an
unfavorable audit report or any portion thereof is found to be substantiated,
the pharmacy benefits manager shall notify the pharmacy in writing of its right
to request an independent third-party review of the final audit findings and
the process used to request such a review. If a pharmacy requests an
independent third-party review of the final audit findings and the audit report
is found to be substantiated, the cost of the third-party review shall be paid
by the pharmacy. If a pharmacy requests an independent third-party review of
the final audit findings and the audit report is found to be unsubstantiated,
the cost of the third-party review shall be paid by the pharmacy benefits
manager. If the reviewer finds partially in favor of both parties, the reviewer
shall apportion the costs accordingly and each party will bear a portion of the
costs of the review.
(6) Rescinded
IAB 4/27/16, effective 6/1/16.
(7)
Each pharmacy benefits manager conducting an audit shall, after completion of
any review process, provide a copy of the final audit report to the covered
entity.
(8) This rule shall not
apply to any investigative audit which involves fraud, willful
misrepresentation, abuse, or any other statutory provision which authorizes
investigations relating to but not limited to insurance
fraud.
Notes
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.