SB 394 — PHARMACY AUDIT CHANGES & EXCEPTIONS

SENATE CORPORATIONS AND TRANSPORTATION COMMITTEE SUBSTITUTE FOR SENATE BILL 394 54TH LEGISLATURE - STATEOFNEWMEXICO- FIRST SESSION, 2019 Pursuant to House Rule 24-1, this document incorporates amendments that have been adopted prior to consideration of this measure by the House.

It is a tool to show the amendments in context and is not to be used for the purpose of amendments.

PROVIDING FOR CHANGES TO THE PHARMACY h AUDIT PROCESS;

EXCEPTING CERTAIN AUDIT FINDINGS FROM FORMING g o THE BASIS FOR RECOUPMENT;

ADDING A PHARMACY BENEFITS MANAGER OR t hr g e i k ITS SUBCONTRACTOR AS AN AUDITING ENTITY.

h7 r i s h , t, BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

e u g e b l e e h SECTION 1.

Section 61-11-18.2 NMSA 1978 (being Laws 2007, n d d i = = o h Chapter 15, Section 1) is amended to read:

l ] b ,d i a º e "61-11-18.2.

AUDIT OF PHARMACY RECORDS.-- rA. i = r t e w d m a n o [A.

As used in this section, "entity" means a d m :

b e d s º o t n = .213892.1 s k m e e a n e d r e l u [ A d SCORC/SB 394 managed care company, insurance company, third-party payor or the representative of the managed care company, insurance company or third-party payor.

B.] A.

(3) a clerical or [record-keeping ] recordkeeping error, regarding a required document or record, shall not necessarily constitute fraud, [but such a claim ] and that error:

h (a) [may be subject to recoupment ] shall g o not be the basis for SCORC/SB 394 recoupment unless the error results in t hr g e i k overpayment to the Page 1 pharmacy, and any amount to be charged back h r i s or recouped due to overpayment shall not exceed the amount the h , t, pharmacy was overpaid;

and e u g e b l e e h (b) shall not be subject to criminal n d d i = = o h penalties without proof of intent to commit fraud;

l ] b ,d i a º e (4) a pharmacy may use the records of a rhospital, iphysician =or rother tauthorized epractitioner wof dthe hospital,healing physicianarts for drugs or othermedicinal authorizedsupplies practitionerwritten or transmitted by any means of communication for purposes of validating the mpharmacy record with respect to orders or refills of a ndangerous odrug dor mcontrolled :substance;

b(5) e d s º o t n = .213892.1 s k m e - 2 - e a nfinding eof dan roverpayment e l u [ A d healing arts for drugs or medicinalunderpayment suppliesshall writtenbe orbased transmittedon by any means of communication for purposes of validating the pharmacyactual recordoverpayment with respect to orders or refillsunderpayment of a dangerousspecific drugindividual orclaim; controlled substance;

(5) a finding of an overpayment or underpayment shall [not be a projection based on the number of patients served having a similar diagnosis or on the number of similar orders or refills for similar drugs and recoupment of claims shall] be based on the actual overpayment or underpayment [unless the entity demonstrates a statistically justifiable method of projection or the projection for overpayment or underpayment is part of a settlement as agreed to by the pharmacy] of a specific individual claim;

(7) a pharmacy shall be allowed at least twenty-one business days, with reasonable extensions allowed, following receipt of the preliminary audit report in which to h produce documentation to address any discrepancy found during g o an audit;

t hr g e i k (8) the period covered by an audit shall not h r i s exceed two years [unless otherwise provided by contractual h , t, agreement] from the date the claim was submitted to or e u g e b l adjudicated by an entity, [or ] unless it conflicts with state eor eSCORC/SB h394 nPage d2 d i = = o h or federal law;

l ] b ,d i a º e (9) an audit shall not be initiated or r i = r t e w d scheduled during the first five calendar days of a monthmonth; [due m a n o d m :

b(10) ethe dpreliminary saudit ºreport oshall tbe ndelivered =to .213892.1the spharmacy kwithin mone ehundred -twenty 3days, -with ereasonable aextensions nallowed, eafter dconclusion rof ethe laudit, uand [the Afinal dreport SCORC/SBshall 394be delivered to the highpharmacy volumewithin six months after receipt of prescriptionsthe filledpreliminary duringaudit thatreport timeor unlessfinal otherwiseappeal, consentedas toprovided byfor thein pharmacy];Subsection B of this section, whichever is later;

(10)(11) thenotwithstanding preliminaryany auditother reportprovision shallin bethis deliveredsection, to the pharmacyentity withinconducting one hundred twenty days, with reasonable extensions allowed, after conclusion of the audit,audit and the final report shall benot delivereduse to the pharmacyaccounting withinpractice six months after receipt of theextrapolation preliminaryin auditcalculating reportrecoupments or finalpenalties appeal, as provided for inaudits; Subsection [C ] B of this section, whichever is later;

[(11)(12) the auditing entity conducting a pharmacy audit criteriashall setnot forthcompensate inan thisemployee subsectionor shallcontractor applywith onlywhich an auditing entity contracts to auditsconduct ofa claimspharmacy submittedaudit forbased paymenton afterthe Julyamount 1,claimed 2007;or the actual amount recouped from the pharmacy being audited;

and(13) (12)]an (11)entity notwithstandingshall anynot othercharge provisiona infee thisfor [subsectionconducting ]an section,on-site theor entitya conductingdesk the audit shallunless notthere useis thea accountingfinding practice of extrapolationactual infraud; calculating recoupments or penalties for audits;

h(14) (12)as the auditing entity conducting a pharmacyresult gof oan audit shallfinding, nota compensatepharmacist an employee or contractorpharmacy withmay whichresubmit ta hrclaim gwithin etwenty-one ibusiness kdays anto auditingcorrect entityclerical contractsor torecordkeeping conducterrors ain pharmacySCORC/SB audit394 basedPage h3 rlieu iof srecoupment onof thea amountclaim claimedwhere orno the actual amountfinancial recoupedharm fromto the hpatient ,has t,occurred; pharmacy being audited;

eprovided uthat gthe eprescription bwas ldispensed eaccording eto hprescription (13)documentation anrequirements entitypursuant shallto notthe chargePharmacy aAct; fee for n d d i = = o h conducting an on-site or a desk audit unless there is a finding l ] b ,d i a º e of actual fraud;

r i = r t e w d (14) as a result of an audit finding, a m a n o d m :

b e d s º o t n = .213892.1 s k m e - 4 - e a n e d r e l u [ A d pharmacist or pharmacy may resubmit a claim SJCºwithin twenty- one business days»SJC to correct clerical or recordkeeping errors SJCºin lieu of recoupment of a claim where no actual financial harm to the patient has occurred;

provided that the prescription was dispensed according to prescription documentation requirements pursuant to the Pharmacy Act»SJC;

h (18) if the only commercially available g o package size exceeds an entity's maximum days' supply, the t hr g e i k dispensing of such package size must be accepted by the entity h r i s and shall not be the basis for recoupment;

h , t, (19) if the only commercially available e u g e b l e e h package size exceeds an entity's maximum days' supply and the n d d i = = o h entity accepts the refill of such prescription, the entity l ] b ,d i a º e shall not recoup such claim as an early refill;

and rSCORC/SB i394 =Page r4 t(20) ethe wfailure dof ma pharmacy to collect a ncopayment oshall (20)not be the failurebasis offor arecoupment if the pharmacy toprovides collectdocumentation of billing of the claim and a dreasonable mattempt :to collect the copayment.

bB. e d s º o t n = .213892.1 s k m e - 5 - e a n e d r e l u [ A d SCORC/SB 394 copayment shall not be the basis for recoupment if the pharmacy provides documentation of billing of the claim and SJCºmakes»SJC a reasonable attempt to collect the copayment.

[C.]Recoupment B.of any disputed funds shall occur after final internal disposition of the audit, including the appeals process set forth in Subsection C of this section.

Recoupment of any disputed funds shall occur after final internal disposition of the audit, including the appeals process set forth in Subsection [D ] C of this section.

[D.C.

] C.

If, following the appeal, the entity finds that an unfavorable audit report or any portion of the audit is unsubstantiated, the entity shall dismiss the audit report or the h unsubstantiated portion of the report of the audit without the g o necessity of any further proceedings.