SENATE, No. 840

STATE OF NEW JERSEY

219th LEGISLATURE

 

PRE-FILED FOR INTRODUCTION IN THE 2020 SESSION

 


 

Sponsored by:

Senator  NELLIE POU

District 35 (Bergen and Passaic)

Senator  VIN GOPAL

District 11 (Monmouth)

 

 

 

 

SYNOPSIS

     Regulates audits of pharmacies.

 

CURRENT VERSION OF TEXT

     Introduced Pending Technical Review by Legislative Counsel.

  


An Act concerning pharmacy audits and supplementing Title 17B of the New Jersey Statutes.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    As used in this act:

     "Drug" means a drug or device as defined in R.S.24:1-1.

     “Entity” means a carrier, a pharmacy benefits manager, a third-party payer, or an entity representing a responsible party.

     “Pharmacy” means any place in the State where drugs are dispensed or pharmaceutical care is provided by a licensed pharmacist, but shall not include a medical office under the control of a licensed physician.

     "Pharmacy benefits manager" means the same as defined in section 1 of P.L.2015, c.179 (C.17B:27F-1)

     "Prescription" means the same as defined in section 5 of P.L.1977, c.240 (C.24:6E-4).

 

     2.    Notwithstanding any provision of law to the contrary, if an entity conducts an audit of the records of a pharmacy the entity shall comply with the following:

     a.     If the audit is to be conducted on-site at a pharmacy, the entity conducting the audit shall:

     (1)   give the pharmacy at least 14 days’ advance written notice of the audit and the specific prescriptions to be included in the audit; and

     (2) not audit a pharmacy on Mondays or on weeks containing a federal holiday, unless agreed to by the pharmacy being audited;

     b.    An entity shall not audit claims that:

     (1)   were submitted to the pharmacy benefit manager more than 18 months prior to the date of the audit, unless:

     (a)   required by federal law; or

     (b)   the originating prescription was dated within the 18-month period preceding the date of the audit; or

     (2)   exceed 100 selected prescription claims;

     c.     The entity conducting the audit shall accept valid and lawful purchases from licensed wholesalers, permissible under applicable federal and state laws, to determine if a pharmacy has sufficient inventory to support prescriptions dispensed;

     d.    Auditors shall be permitted to enter the prescription department only when accompanied by or authorized by a member of the pharmacy staff authorized to be in the prescription department, and auditors shall not disrupt the provision of services to the pharmacy’s customers;

     e.     Clerical or recordkeeping errors, including typographical errors, scrivener’s errors, and computer errors, on a required document or record shall not be deemed fraudulent in the absence of any financial harm or other evidence; provided that this subsection shall not be construed to prohibit recoupment of actual fraudulent payments;

     f.     The pharmacy may dispense and receive reimbursement for the full quantity of the smallest commonly available commercially packaged product, including eye drops, insulin, and topical products, that contains the total amount required to be dispensed to meet the days’ supply ordered by the prescriber, even if the full quantity of the commercially prepared package exceeds the maximum days’ supply allowed;

     g.    The pharmacy shall be permitted to determine the days’ supply using the highest daily total dose that may be utilized by the patient pursuant to the prescriber’s directions, and for prescriptions with a titrated dose schedule, to use the schedule to determine the days’ supply;

     h.    A pharmacy shall be subject to recoupment only following the correction of a claim and recoupment shall be limited to amounts paid in excess of amounts payable under the corrected claim;

     i.     If a written prescription order cannot be located at the time of the audit, a pharmacy shall be provided sufficient time to reach out to the medical provider that issued the prescription for a replacement copy; and

     j.     A demand for recoupment, repayment, or offset against future reimbursement for overpayment of a claim for dispensing of an original or refill prescription shall not include the dispensing fee, unless the prescription that is the subject of the claim was not actually dispensed, was not valid, was fraudulent, or was outside the provisions of the contract; provided that this subsection shall not apply if a pharmacy is required to correct an error in a claim submitted in good faith.

 

     3.    This act shall take effect on the 90th day next following enactment.

 

STATEMENT

 

     This bill establishes certain protections for pharmacies being audited by health insurance carriers, pharmacy benefits managers, or other similar entities – a “Pharmacy Audit Bill of Rights.”  The bill provides that whenever an entity conducts an audit of the records of a pharmacy, the pharmacy shall have certain rights, as follows:

·        If an audit is to be conducted on-site at a pharmacy, the entity conducting the audit shall: 

(1)  give the pharmacy at least 14 days’ advance written notice of the audit and the specific prescriptions to be included in the audit; and

(2) not audit a pharmacy on Mondays or on weeks containing a federal holiday, unless agreed to by the pharmacy being audited;

·        An entity shall not audit claims that:

(1)   were submitted to the pharmacy benefits manager more than 18 months prior to the date of the audit, unless:

(a)   required by federal law; or

(b)   the originating prescription was dated within the 18-month period preceding the date of the audit; or

(2)   exceed 100 selected prescription claims;

·        The entity conducting the audit shall accept valid and lawful purchases from licensed wholesalers, permissible under applicable federal and states law, to determine if a pharmacy has sufficient inventory to support claims dispensed.

·        Auditors shall be permitted to enter the prescription department only when accompanied by or authorized by a member of the pharmacy staff authorized to be in the prescription department, and auditors shall not disrupt the provision of services to the pharmacy’s customers.

·        Clerical or recordkeeping errors, including typographical errors, scrivener’s errors, and computer errors, on a required document or record shall not be deemed fraudulent in the absence of any financial harm or other evidence. This provision shall not be construed to prohibit recoupment of actual fraudulent payments.

·        The pharmacy shall be permitted to dispense and receive reimbursement for the full quantity of the smallest commonly available commercially packaged product, including eye drops, insulin, and topical products, that contains the total amount required to be dispensed to meet the days’ supply ordered by the prescriber, even if the full quantity of the commercially prepared package exceeds the maximum days’ supply allowed.

·        The pharmacy may determine the days’ supply using the highest daily total dose that may be utilized by the patient pursuant to the prescriber’s directions, and for prescriptions with a titrated dose schedule, to use the schedule to determine the days’ supply.

·        A pharmacy shall be subject to recoupment only following the correction of a claim and recoupment shall be limited to amounts paid in excess of amounts payable under the corrected claim.

·        If a written prescription order cannot be located at the time of the audit, pharmacies shall be provided sufficient time to reach out to the medical provider that issued the prescription for a replacement copy.

·        A demand for recoupment, repayment, or offset against future reimbursement for overpayment of a claim for dispensing of an original or refill prescription shall not include the dispensing fee, unless the prescription that is the subject of the claim was not actually dispensed, was not valid, was fraudulent, or was outside the provisions of the contract.  This provision not apply if a pharmacy is required to correct an error in a claim submitted in good faith.