Full Text of HB2017 97th General Assembly
HB2017ham002 97TH GENERAL ASSEMBLY | Rep. Franco Coladipietro Filed: 4/13/2011
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| 1 | | AMENDMENT TO HOUSE BILL 2017
| 2 | | AMENDMENT NO. ______. Amend House Bill 2017 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Illinois Insurance Code is amended by | 5 | | changing Sections 512-3 and 512-7 as follows:
| 6 | | (215 ILCS 5/512-3) (from Ch. 73, par. 1065.59-3)
| 7 | | Sec. 512-3. Definitions. For the purposes of this Article, | 8 | | unless the
context otherwise requires, the terms defined in | 9 | | this Article have the meanings
ascribed
to them herein:
| 10 | | (a) "Third party prescription program" or "program" means | 11 | | any system of
providing for the reimbursement of pharmaceutical | 12 | | services and prescription
drug products offered or operated in | 13 | | this State under a contractual arrangement
or agreement between | 14 | | a provider of such services and another party who is
not the | 15 | | consumer of those services and products. Such programs may | 16 | | include, but need not be limited to, employee benefit
plans |
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| 1 | | whereby a consumer receives prescription drugs or other | 2 | | pharmaceutical
services and those services are paid for by
an | 3 | | agent of the employer or others.
| 4 | | (b) "Third party program administrator" or "administrator" | 5 | | or "entity" means any pharmacy benefits manager or person, | 6 | | business, or other entity that performs pharmacy benefits | 7 | | management. The terms include a person or auditing entity | 8 | | acting for a pharmacy benefits manager in a contractual or | 9 | | employment relationship in the performance of pharmacy | 10 | | benefits management for a managed care company or nonprofit | 11 | | hospital or the services of a pharmacy benefits administrator, | 12 | | medical service organization, insurance company, third-party | 13 | | payor, person,
partnership or corporation who issues or causes | 14 | | to be issued any payment
or reimbursement to a provider for | 15 | | services rendered pursuant to a third
party prescription | 16 | | program, but does not include the Director of Healthcare and | 17 | | Family Services or any agent authorized by
the Director to | 18 | | reimburse a provider of services rendered pursuant to a
program | 19 | | of which the Department of Healthcare and Family Services is | 20 | | the third party. | 21 | | (c) "Fraud" means an intentional act of deception or | 22 | | misrepresentation to obtain an authorized benefit.
| 23 | | (Source: P.A. 95-331, eff. 8-21-07.)
| 24 | | (215 ILCS 5/512-7) (from Ch. 73, par. 1065.59-7)
| 25 | | Sec. 512-7. Contractual provisions.
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| 1 | | (a) Any agreement or contract entered into in this State | 2 | | between the
administrator of a program and a pharmacy shall | 3 | | include a statement of the
method and amount of reimbursement | 4 | | to the pharmacy for services rendered to
persons enrolled in | 5 | | the program, the frequency of payment by the program
| 6 | | administrator to the pharmacy for those services, and a method | 7 | | for the
adjudication of complaints and the settlement of | 8 | | disputes between the
contracting parties.
| 9 | | (b)(1) A program shall provide an annual period of at least | 10 | | 30 days
during which any pharmacy licensed under the | 11 | | Pharmacy Practice Act
may elect to participate in the | 12 | | program under the program terms for at
least one year.
| 13 | | (2) If compliance with the requirements of this | 14 | | subsection (b) would
impair any provision of a contract | 15 | | between a program and any other person,
and if the contract | 16 | | provision was in existence before January 1, 1990,
then | 17 | | immediately after the expiration of those contract | 18 | | provisions the
program shall comply with the requirements | 19 | | of this subsection (b).
| 20 | | (3) This subsection (b) does not apply if:
| 21 | | (A) the program administrator is a licensed health | 22 | | maintenance
organization that owns or controls a | 23 | | pharmacy and that enters into an
agreement or contract | 24 | | with that pharmacy in accordance with subsection (a); | 25 | | or
| 26 | | (B) the program administrator is a licensed health |
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| 1 | | maintenance
organization that is owned or controlled | 2 | | by another entity that also owns
or controls a | 3 | | pharmacy, and the administrator enters into an | 4 | | agreement or
contract with that pharmacy in accordance | 5 | | with subsection (a).
| 6 | | (4) This subsection (b) shall be inoperative after | 7 | | October 31,
1992.
| 8 | | (c) The program administrator shall cause to be issued an | 9 | | identification
card to each person enrolled in the program. The | 10 | | identification card
shall include:
| 11 | | (1) the name of the individual enrolled in the program; | 12 | | and
| 13 | | (2) an expiration date if required under the | 14 | | contractual arrangement or
agreement between a provider of | 15 | | pharmaceutical services and prescription
drug products and | 16 | | the third party prescription program administrator.
| 17 | | (d) Notwithstanding any other law, either State or federal, | 18 | | when an on-site audit of the records of a pharmacy is conducted | 19 | | by any entity, the audit shall be conducted in accordance with | 20 | | the following criteria: | 21 | | (1) the entity conducting the on-site audit must give | 22 | | the pharmacy written notice prior to conducting the initial | 23 | | on-site audit and must specify the records and documents to | 24 | | be examined; | 25 | | (2) any audit that involves clinical or professional | 26 | | judgment must be conducted by or in consultation with a |
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| 1 | | pharmacist that that is duly licensed; | 2 | | (3) any clerical or record-keeping error, such as a | 3 | | typographical error, scrivener's error, or computer error, | 4 | | regarding a required document or record does not constitute | 5 | | fraud; however, such claims may be subject to recoupment; | 6 | | (4) a finding of an overpayment or underpayment must be | 7 | | based on the actual overpayment or underpayment and may not | 8 | | be a projection based on the number of patients served | 9 | | having a similar diagnosis or on the number of similar | 10 | | orders or refills for similar drugs unless mutually agreed | 11 | | to in writing by both parties; | 12 | | (5) each pharmacy shall be audited under the same | 13 | | standards and parameters as other similarly situated | 14 | | pharmacies audited by the entity; and | 15 | | (6) the period covered by an audit may not exceed 2 | 16 | | years from the date the claim was submitted to or | 17 | | adjudicated by an entity. | 18 | | (e) The auditing entity, administrator, or its | 19 | | representative described in subsection (d) of this Section must | 20 | | provide the pharmacy with a written report of the audit and | 21 | | comply with the following requirements: | 22 | | (1) the preliminary audit report must be delivered to | 23 | | the pharmacy within 90 days after conclusion of the audit | 24 | | along with a written copy of the appeals process to the | 25 | | pharmacy that is being audited; | 26 | | (2) a pharmacy shall be allowed at least 30 business |
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| 1 | | days following receipt of the preliminary audit report in | 2 | | which to produce documentation to address any discrepancy | 3 | | found during the audit; | 4 | | (3) a final audit report shall be delivered to the | 5 | | pharmacy within 180 days after receipt of the preliminary | 6 | | audit report or final appeal, as provided for in Section 6 | 7 | | of this Code, whichever is later; | 8 | | (4) an acknowledgement of the audit, as conducted, must | 9 | | be signed and shall include the signature of any pharmacist | 10 | | participating in the audit; | 11 | | (5) recoupments of any disputed funds, or repayment of | 12 | | funds to the entity by the pharmacy if permitted pursuant | 13 | | to contractual agreement, shall occur, to the extent | 14 | | demonstrated and/or documented pursuant to the pharmacy | 15 | | audit findings, after final internal disposition of the | 16 | | audit; should the identified discrepancy for an individual | 17 | | audit exceed $25,000, then future payments to the pharmacy | 18 | | may be withheld pending finalization of the audit; | 19 | | (6) interest shall not accrue during the audit period; | 20 | | and | 21 | | (7) each entity conducting an audit shall provide a | 22 | | copy of the final audit report, after completion of any | 23 | | review process, to the audited pharmacy. | 24 | | (f) Notwithstanding any other provision in this Code, the | 25 | | administrator conducting the audit pursuant to subsections (d) | 26 | | and (e) of this Section shall not use the accounting practice |
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| 1 | | of extrapolation in calculating recoupments or penalties for | 2 | | audits. | 3 | | As used in this Section, "accounting practice of | 4 | | extrapolation" means an audit of a sample of prescription drug | 5 | | benefit claims submitted by a pharmacy to the administrator | 6 | | conducting the audit that is then used to estimate audit | 7 | | results for a larger batch or group of claims not reviewed by | 8 | | the auditor. | 9 | | (g) The audit criteria set forth in this Section shall | 10 | | apply only to audits of claims for services provided and claims | 11 | | submitted for payment after the effective date of this | 12 | | amendatory Act of the 97th General Assembly. | 13 | | (h) This Section shall not apply to any investigative audit | 14 | | that involves potential fraud, willful misrepresentation, or | 15 | | abuse, including, without limitation, investigative audits or | 16 | | any other statutory provision that authorizes investigations | 17 | | relating to insurance fraud. | 18 | | (Source: P.A. 95-689, eff. 10-29-07.)".
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