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 ten business days prior to conducting any
audit;
b. Any audit which involves
clinical or professional judgment must be conducted by or in consultation with
a pharmacist;
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
third-party payor, 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 Iowa Code section
510B.7 and 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 penalty
for an audit 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 third-party
payor within ten business days of completing the report.
(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.