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S7201Senate2015-2016 SessionSame asA9424

Relates to enacting provisions governing audits of pharmacies by certain entities

Sponsor Kemp HannonSD-6+14 co-sponsorsAffects Health
Status
In Senate Committee
Health
Impact
Pending
Passage
Pending

Bill progress

Step 2 of 7

In committee · Health

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History

  1. Referred to health

Companion bill

The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.

A9424Assembly

Relates to enacting provisions governing audits of pharmacies by certain entities

In Assembly Committee · Health · Sponsor Charles Lavine

Full text

The text isn't available here yet. Check nysenate.gov.

Sponsor's memo

Title of bill

An act to amend the public health law, in relation to audits of pharmacies

Purpose

Establishes standards for an audit of the records of pharmacy conducted by a pharmacy benefit manager, health plan, insurer, third party administrator, company or their representative or a state agency other than the Office of the Medicaid Inspector General.

Summary of provisions

Section 1 adds a new section, Section 280-B, to the Public Health Law to establish reasonable standards and consistency in the conduct of audits of the records of pharmacies by entities that pay for pharmacy benefits or agents acting on their behalf.

Section 2 provides the effective date.

Justification

Over ninety percent of prescriptions that pharmacies dispense are covered through an insurance plan that includes a pharmacy benefit. For this reason, it is appropriate that agents of insurers, health plans and other payers routinely conduct audits of the claims that pharmacies submit for payment. This legislation is intended to establish reasonable standards by which such audits are conducted consistent with their core purpose which is to seek out fraud, waste and abuse.

The need for legislation arises from audit practices that are invasive and overly time consuming, diverting the pharmacist's time and attention away from patient care. Pharmacies report that they are given insufficient notice and unworkable timeframes in which to comply with an auditor's demands for the pharmacy's records. Recoupments can be excessively punitive, based on clerical errors in cases where there was no financial harm to the payer or to the patient, no prescription or dispensing error, and no harm to the patient. Even more egregious is the practice of assessing fees and other charge-backs on the basis of claims that have been accepted for payment and fully adjudicated. Pharmacy benefit managers that own and operate pharmacies that compete directly with the pharmacy under audit have demanded business records that go well beyond the claims under review. Prescriptions chosen for review should be randomly selected and not targeted by a competitor that has full access to relevant cost and patient data.

This legislation establishes reasonable timeframes, adequate notice and standard audit procedures including an appeals process for audit findings in dispute and recoupment policies that are consistent with fair business practices. More than thirty states have laws establishing reasonable protections for pharmacies undergoing audits. The current laws have informed the components in this legislation. Given the important patient protection responsibilities given to licensed pharmacists and the vital role that pharmacies have in delivering patient care, it is clearly in the public interest that standardized and fair pharmacy audits are part of public health law in New York State.

Legislative history

New Bill

Fiscal implications

None to the State

Effective date

This act shall take effect on the ninetieth day after it shall have become law

Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.