Appeals. (1) As used in this section: (a) "Audit" means a review of the records of a pharmacy by or on behalf of an entity that finances or reimburses the cost of health care services or pharmaceutical products. (b) "Audit completion date" means: (i) for an audit that does not require an on-site visit at the pharmacy, the date on which the pharmacy, in response to the initial audit request, submits records or other documents to the entity conducting the audit, as determined by: (A) postmark or other evidence of the date of mailing; or (B) the date of transmission if the records or other documents are transmitted electronically; and (ii) for an audit that requires an on-site visit at a pharmacy, the date on which the auditing entity completes the on-site visit, including any follow-up visits or analysis which shall be completed within 60 days after the day on which the on-site visit begins. (c) "Entity" includes: (i) a pharmacy benefits manager or coordinator; (ii) a health benefit plan; (iii) a third party administrator as defined in Section 31A-1-301; (iv) a state agency; or (v) a company, group, or agent that represents, or is engaged by, one of the entities described in Subsections (1)(c)(i) through (iv). (d) "Extrapolation" means a method of using a mathematical formula that uses the audit results from a small sample of insurance claims and projects the results over a larger group of insurance claims. (e) "Fraud" means an intentional act of deception, misrepresentation, or concealment in order to gain something of value. (f) "Health benefit plan" means: (i) a health benefit plan as defined in Section 31A-1-301; or (ii) a health, dental, medical, Medicare supplement, or conversion program offered under Title 49, Chapter 20, Public Employees' Benefit and Insurance Program Act. (2) (a) Except as provided in Subsection (2)(b), this section applies to: (i) a contract for the audit of a pharmacy entered into, amended, or renewed on or after July 1, 2012; and (ii) an entity that conducts an audit of the pharmacy records of a pharmacy licensed under this chapter. (b) This section does not apply to an audit of pharmacy records: (i) for a federally funded prescription drug program, including: (A) the state Medicaid program; (B) the Medicare Part D program; (C) a Department of Defense prescription drug program; and (D) a Veterans Affairs prescription drug program; or (ii) when fraud or other intentional and willful misrepresentation is alleged and the pharmacy audit entity has evidence that the pharmacy's actions reasonably indicate fraud or intentional and willful misrepresentation. (3) (a) An audit that involves clinical or professional judgment shall be conducted by or in consultation with a pharmacist who is employed by or working with the auditing entity and who is licensed in the state or another state. (b) If an audit is conducted on site at a pharmacy, the entity conducting the audit: (i) shall give the pharmacy 10 days advanced written notice of: (A) the audit; and (B) the range of prescription numbers and a date range for the prescription numbers included in the audit; and (ii) may not audit a pharmacy during the first five business days of the month, unless the pharmacy agrees to the timing of the audit. (c) An entity may not audit claims: (i) submitted more than 18 months prior to the audit, unless: (A) required by federal law; or (B) the originating prescription is dated in the preceding six months; or (ii) that exceed 200 selected prescription claims annually. (d) Subsection (3)(c)(ii) does not apply to any investigative audit that involves fraud, waste, abuse, or willful misrepresentation. (4) (a) An entity may not: (i) include dispensing fees in the calculations of overpayments unless the prescription is considered a misfill; (ii) recoup funds for prescription clerical or recordkeeping errors, including typographical errors, scrivener's errors, and computer errors on a required document or record unless the audit entity is alleging fraud or other intentional or willful misrepresentation and the audit entity has evidence that the pharmacy's actions reasonably indicate fraud or intentional and willful misrepresentation; (iii) recoup funds for refills dispensed in accordance with Section 58-17b-608.1, unless the health benefit plan does not cover the prescription drug dispensed by the pharmacy; (iv) collect any funds, charge-backs, or penalties until the audit and all appeals are final, unless the audit entity is alleging fraud or other intentional or willful misrepresentation and the audit entity has evidence that the pharmacy's actions reasonably indicate fraud or intentional and willful misrepresentation; or (v) recoup funds or collect any funds, charge-backs, or penalties from a pharmacy in response to a request for audit unless the pharmacy confirms to the entity the date on which the pharmacy received the request for audit. (b) Auditors shall only have access to previous audit reports on a particular pharmacy if the previous audit was conducted by the same entity except as required for compliance with state or federal law. (5) A pharmacy subject to an audit: (a) may use one or more of the following to validate a claim for a prescription, refill, or change in a prescription: (i) electronic or physical copies of records of a health care facility, or a health care provider with prescribing authority; (ii) any prescription that complies with state law; (iii) the pharmacy's own physical or electronic records; or (iv) the physical or electronic records, or valid copies of the physical or electronic records, of a practitioner or health care facility as defined in Section 26B-2-201; and (b) may not be required to provide the following records to validate a claim for a prescription, refill, or change in a prescription: (i) if the prescription was handwritten, the physical handwritten version of the prescription; or (ii) a note from the practitioner regarding the patient or the prescription that is not otherwise required for a prescription under state or federal law. (6) (a) (i) An entity that audits a pharmacy shall establish: (A) a maximum time for the pharmacy to submit records or other documents to the entity following receipt of an audit request for records or documents; and (B) a maximum time for the entity to provide the pharmacy with a preliminary audit report following submission of records under Subsection (6)(a)(i)(A). (ii) The time limits established under Subsections (6)(a)(i)(A) and (B): (A) shall be identical; and (B) may not be less than seven days or more than 60 days. (iii) An entity that audits a pharmacy may not, after the audit completion date, request additional records or other documents from the pharmacy to complete the preliminary audit report described in Subsection (6)(b). (b) An entity that audits a pharmacy shall provide the pharmacy with a preliminary audit report: (i) delivered to the pharmacy or its corporate office of record, within the time limit established under Subsection (6)(a)(i)(B); and (ii) that includes a notation and detailed explanation for each suspected error. (c) (i) Except as provided in Subsection (6)(c)(ii), a pharmacy has 30 days following receipt of the preliminary audit report to respond to questions, provide additional documentation, and comment on and clarify findings of the audit. (ii) An entity may grant a reasonable extension under Subsection (6)(c)(i) upon request by the pharmacy. (iii) Receipt of the report under Subsection (6)(c)(i) shall be determined by: (A) postmark or other evidence of the date of mailing; or (B) the date of transmission if the report is transmitted electronically. (iv) If a dispute exists between the records of the auditing entity and the pharmacy, the records maintained by the pharmacy shall be presumed valid for the purpose of the audit. (7) If an audit results in the dispute or denial of a claim, the entity conducting the audit shall allow any of the following: (a) the pharmacy to resubmit a claim using any commercially reasonable method, including fax, mail, or electronic claims submission within 30 days from the day on which the audit report is received by the pharmacy; or (b) the health benefit plan or other entity that finances or reimburses the cost of health care services or pharmaceutical products to rerun the claim if the health benefit plan or other entity chooses to rerun the claim at no cost to the pharmacy. (8) (a) Within 60 days after the completion of the appeals process under Subsection (9), a final audit report shall be delivered to the pharmacy or its corporate office of record. (b) The final audit report shall include: (i) a disclosure of any money recovered by the entity that conducted the audit; and (ii) legal or contractual information supporting any money recovered, recoupments, or penalties included in the report. (9) (a) An entity that audits a pharmacy shall establish a written appeals process for appealing a preliminary audit report and a final audit report, and shall provide the pharmacy with notice of the written appeals process. (b) If the pharmacy benefit manager's contract or provider manual contains the information required by this Subsection (9), the requirement for notice is met. (10) An auditing entity conducting a pharmacy audit may not: (a) use extrapolation when conducting an audit, including calculating recoupments or penalties for audits, unless otherwise required by federal law or a self-funded insurance plan; or (b) compensate an employee or contractor participating in the audit in a manner that is based on the amount claimed or the actual amount recouped from the pharmacy being audited.
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