Full Text of SB1710 101st General Assembly
SB1710sam001 101ST GENERAL ASSEMBLY | Sen. Laura Ellman Filed: 3/15/2019
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| 1 | | AMENDMENT TO SENATE BILL 1710
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 1710 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Illinois Insurance Code is amended by | 5 | | adding Sections 512-12 and 512-13 as follows: | 6 | | (215 ILCS 5/512-12 new) | 7 | | Sec. 512-12. Audit of pharmacy records. | 8 | | (a) Notwithstanding any other law, when an entity is | 9 | | conducting a
retrospective audit of the records of a pharmacy | 10 | | for its reimbursements claims
(on-site or remotely) or performs | 11 | | concurrent daily reviews,
the auditing entity must comply with | 12 | | the following: | 13 | | (1) The entity conducting the initial on-site audit
| 14 | | shall give the pharmacy and the pharmacy's corporate office
| 15 | | written notice at least 30 days before conducting the
| 16 | | initial on-site audit for each audit cycle and shall
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| 1 | | disclose the specific prescriptions to be included in the
| 2 | | audit. | 3 | | (2) Unless otherwise consented to by the pharmacy, an
| 4 | | audit shall not be initiated or scheduled during the first
| 5 | | 7 calendar days of any month or the day before or after a
| 6 | | federal or State holiday due to the high volume of | 7 | | prescriptions
filled during that time. | 8 | | (3) When an entity is conducting an on-site audit, it | 9 | | shall not
interfere with the delivery of pharmacist | 10 | | services to a
patient and shall utilize every effort to | 11 | | minimize
inconvenience and disruption to pharmacy | 12 | | operations during
the audit process. The on-site audit | 13 | | shall not exceed 4
hours in duration and shall review no | 14 | | more than 100 unique
prescription numbers during an initial | 15 | | audit. | 16 | | (4) No entity shall conduct an on-site audit at a
| 17 | | particular pharmacy more than one time annually. However,
| 18 | | this paragraph (4) shall not apply when an entity must
| 19 | | return to a pharmacy to complete an audit already in
| 20 | | progress. | 21 | | (5) The period covered by an audit shall not exceed 2
| 22 | | years from the date the initial prescription claim was
| 23 | | submitted to or adjudicated by an entity. | 24 | | (6) Each pharmacy shall be audited under the same
| 25 | | auditing standards and parameters used for conducting | 26 | | audits of other contracted network pharmacies under each |
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| 1 | | pharmacy network contract that a pharmacy benefits manager | 2 | | or health plan utilizes in this State. Any documentation | 3 | | and
records required by an auditor during an audit shall be | 4 | | of
the same type as the documentation and records required | 5 | | for
other contracted network pharmacies under each | 6 | | pharmacy provider network contract that a pharmacy | 7 | | benefits manager or health plan utilizes in this State. | 8 | | (7) Any audit that involves clinical or professional
| 9 | | judgment shall be conducted by or in consultation with a
| 10 | | pharmacist licensed under the Pharmacy Practice Act. | 11 | | (8) Each audit shall be conducted by a field agent who
| 12 | | possesses the requisite expertise in pharmacy practice in | 13 | | this State. | 14 | | (9) Any unintentional clerical or record-keeping | 15 | | error, such as a typographical error, scrivener's error, or | 16 | | computer error, regarding a required document or record | 17 | | shall not necessarily constitute fraud. These claims may be | 18 | | subject to recoupment, but shall not subject a pharmacy to | 19 | | criminal penalties without proof of intent to commit fraud.
| 20 | | In the case of errors which have no financial harm to the
| 21 | | patient or plan, the entity must not assess any
| 22 | | chargebacks. | 23 | | (10) All audits shall be conducted in accordance with
| 24 | | generally accepted accounting principles, standards, and
| 25 | | procedures; and auditing principles, standards, and
| 26 | | procedures; and using standards and parameters established
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| 1 | | by rule that are identical for all audits conducted. | 2 | | (11) An entity conducting daily concurrent reviews, | 3 | | either directly or on behalf of a pharmacy benefits | 4 | | manager, must complete the concurrent reviews and allow | 5 | | final processing for final claim adjudication within 3 | 6 | | business days or 5 calendar days, whichever is sooner, | 7 | | after the initial adjudication effort for the claim. | 8 | | (12) Prescriptions are considered valid prescriptions
| 9 | | if they are compliant with the Pharmacy Practice Act and
| 10 | | Illinois Controlled Substances Act and have been
| 11 | | positively adjudicated upon claim submission by the
| 12 | | entity. Plan restrictions should be addressed during the
| 13 | | claims adjudication process either through the rejection
| 14 | | of the claim or a rejection of the claim with direction to
| 15 | | obtain a prior authorization and may not be the basis for a
| 16 | | retrospective recoupment of a paid claim. | 17 | | (13) A finding of an overpayment or underpayment must
| 18 | | be based on the actual overpayment or underpayment and may
| 19 | | not be a projection based on the number of patients served
| 20 | | having a similar diagnosis or on the number of similar
| 21 | | orders or refills for similar drugs. | 22 | | (14) With the exception of overpayments, if a pharmacy | 23 | | benefits manager
approves a claim through adjudication, | 24 | | the pharmacy benefits manager may not
retroactively deny or | 25 | | modify reimbursement based on
information accompanying the | 26 | | original claim or information
available to the pharmacy |
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| 1 | | benefits manager at the time of adjudication, unless
the | 2 | | claim was fraudulent, the pharmacy or pharmacist had
been | 3 | | reimbursed for the claim previously, or the services
| 4 | | reimbursed were not rendered by the pharmacy or pharmacist. | 5 | | (15) A pharmacy benefits manager may not require more | 6 | | information to be
written on a prescription than is | 7 | | required by State or
federal law. Nor may a pharmacy | 8 | | benefits manager require more stringent records
to | 9 | | validate a prescription order than is required by State
or | 10 | | federal law. | 11 | | (16) Electronic records, including electronic
| 12 | | beneficiary signature logs, electronic tracking of
| 13 | | prescriptions, electronic prescriber prescription
| 14 | | transmissions and imagery of hard copy prescriptions,
| 15 | | electronically scanned store, patient records maintained
| 16 | | at or accessible to the offices of an audited pharmacy's
| 17 | | central operations, and any other reasonably clear and
| 18 | | accurate electronic documentation shall be acceptable for
| 19 | | auditing under the same terms and conditions and for the
| 20 | | same purposes as their paper analogs. | 21 | | If paper logs are used, auditors must look at least 14
| 22 | | days past the dispense date to check for patient pickup. | 23 | | Point of sale electronic register data shall qualify as
| 24 | | proof of delivery to the patient. | 25 | | (17) A pharmacy may use the records of a hospital, | 26 | | physician, or other authorized practitioner of the healing
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| 1 | | arts for drugs or medicinal supplies written or transmitted
| 2 | | by any means of communication for purposes of validating
| 3 | | the pharmacy record with respect to orders or refills of a
| 4 | | legend drug or other controlled substance. | 5 | | (18) Validation of appropriate day's supply and drug
| 6 | | dosing must be based on manufacturer guidelines and
| 7 | | definitions or, in the case of topical products or titrated
| 8 | | products, the professional judgment of the pharmacist
| 9 | | based upon communication with the patient or prescriber. | 10 | | (19) A pharmacy's usual and customary price for
| 11 | | compounded medications is considered the reimbursable cost
| 12 | | unless an alternate price is published in the provider
| 13 | | contract and signed by both parties. | 14 | | (20) A pharmacy benefits manager may not require a | 15 | | pharmacy to agree to
recoupments deducted against future | 16 | | remittances and shall
invoice the pharmacy for payment if | 17 | | the pharmacy elects.
Recoupment may be deducted against | 18 | | future remittances
without mutual consent when the | 19 | | pharmacy is considered
delinquent in payment of the invoice | 20 | | per the contractual
arrangement. | 21 | | (21) Interest shall not accrue during the audit period. | 22 | | (22) Notwithstanding any other provision in this
| 23 | | subsection (a), the entity conducting the audit shall be | 24 | | prohibited from using the accounting practice of | 25 | | extrapolation in calculating recoupments or penalties for | 26 | | audits. A finding
of overpayment or underpayment must be |
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| 1 | | based on the actual
overpayment or underpayment and not on | 2 | | a projection based on the number of patients served having | 3 | | a similar diagnosis
or on the number of similar orders or | 4 | | refills for similar
drugs. | 5 | | (23) A finding of an overpayment shall not include the
| 6 | | dispensing fee amount. | 7 | | (24) The preliminary audit report shall be delivered by | 8 | | the entity to
the pharmacy and pharmacy corporate office | 9 | | within 30 days,
with reasonable extensions allowed, after | 10 | | conclusion of
the audit and shall contain individual claim | 11 | | level information for any
discrepancy found and total | 12 | | dollar amount of claims subject
to recovery, organized by | 13 | | plan sponsor, identified by organization name, for which | 14 | | each claim is associated. | 15 | | (25) A pharmacy shall be allowed at least 30 days
| 16 | | following receipt of the preliminary audit report in which
| 17 | | to produce documentation to address any discrepancy found
| 18 | | during an audit or to file an appeal. | 19 | | (26) A final audit report containing claim level
| 20 | | information for any discrepancy found and total dollar
| 21 | | amount of claims subject to recovery shall be delivered to
| 22 | | the pharmacy and pharmacy corporate office within 45 days
| 23 | | after the audited pharmacy's receipt of the preliminary
| 24 | | audit report if the audited pharmacy does not file an
| 25 | | appeal or offers no documentation to address a discrepancy
| 26 | | found during an audit, or within 60 days after the auditing
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| 1 | | entity receives the audited pharmacy's appeal or
| 2 | | documentation to address a discrepancy. The final audit
| 3 | | results shall be reflected in the remittance advice at the
| 4 | | claim level. | 5 | | (27) The entity shall establish an appeals process that
| 6 | | meets the following requirements: | 7 | | (A) The National Council for Prescription Drug
| 8 | | Programs or any other recognized national industry
| 9 | | standard shall be used to evaluate claims submission
| 10 | | and product size disputes. | 11 | | (B) Each entity conducting an audit shall
| 12 | | establish a written appeals process under which a
| 13 | | pharmacy may appeal an unfavorable preliminary audit
| 14 | | report to the entity. | 15 | | (C) If, following the appeal, the entity finds that
| 16 | | an unfavorable audit report or any portion thereof is
| 17 | | unsubstantiated, the entity shall dismiss the audit
| 18 | | report or said portion without the necessity of any
| 19 | | further action. | 20 | | (28) A pharmacy benefits manager may not recover | 21 | | payment of claims from the
pharmacy which is identified | 22 | | through the audit process to
be the responsibility of | 23 | | another payer. The pharmacy benefits manager must
| 24 | | reconcile directly with the other payer for any moneys owed
| 25 | | without requiring the pharmacy to reverse and rebill the | 26 | | original claim in the retail setting. |
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| 1 | | (29) Each entity conducting an audit shall provide a
| 2 | | copy of the final audit report, after completion of any
| 3 | | review process, to the plan sponsor and to the contracted | 4 | | network pharmacy within 3 business days after its | 5 | | completion by the entity. | 6 | | (30) The full amount of any recoupment on an audit
| 7 | | shall be refunded to the plan sponsor. Written | 8 | | documentation of the refund with the refund date and plan | 9 | | sponsor's name and address shall be provided to the | 10 | | contracted network pharmacy subjected to the audit | 11 | | recoupment. | 12 | | (31) Neither the agency conducting the audit nor its
| 13 | | agents shall receive payment based on a percentage of the
| 14 | | amount recovered. This Section does not prevent the entity
| 15 | | conducting the audit from charging or assessing the
| 16 | | responsible party, directly or indirectly, based on
| 17 | | amounts recouped if both of the following conditions are
| 18 | | met: | 19 | | (A) the plan sponsor and the entity conducting the
| 20 | | audit have a contract that explicitly states the
| 21 | | percentage charge or assessment to the plan sponsor;
| 22 | | and | 23 | | (B) a commission to an agent or employee of the
| 24 | | entity conducting the audit is not based, directly or
| 25 | | indirectly, on amounts recouped. | 26 | | (32) The entity conducting the audit shall not base
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| 1 | | compensation of any employees of the entity involved with
| 2 | | the audit process on a percentage of the amount recovered
| 3 | | or audit findings. | 4 | | (b) Except as otherwise provided in subsection (a), all | 5 | | recoupments from final audits of pharmacies are to be | 6 | | considered property of the plan sponsor. The entity shall be | 7 | | required to refund recoupments to each plan sponsor associated | 8 | | with the audited claims. | 9 | | (c) Recoupments of any disputed funds shall occur after
| 10 | | final internal disposition of the audit, including the appeals
| 11 | | process as set forth in subsection (d). | 12 | | (d) Notwithstanding any other law, each entity conducting
| 13 | | an audit shall establish an appeals process under which a
| 14 | | pharmacy may appeal a preliminary audit report to the entity. | 15 | | (e) This Section does not apply to any audit, review, or
| 16 | | investigation that involves allegations of fraud, willful | 17 | | misrepresentation, or abuse. | 18 | | (215 ILCS 5/512-13 new) | 19 | | Sec. 512-13. Enforcement. | 20 | | (a) Enforcement of this Article shall be the responsibility | 21 | | of the Department and the Director. | 22 | | (b) The Director shall have the authority to adopt any | 23 | | rules necessary for the implementation and administration of | 24 | | this Article. | 25 | | (c) The Director shall take action or impose penalties to |
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| 1 | | bring non-complying entities into full compliance with this | 2 | | Article. Any violation of this Article may subject a | 3 | | non-complying entity to financial penalties not less than | 4 | | $1,000 per violation.
| 5 | | Section 99. Effective date. This Act takes effect January | 6 | | 1, 2020.".
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