S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7150

                            I N  S E N A T E

                             March 31, 2016
                               ___________

Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Health

AN ACT to amend the public health law, in relation to audits of  pharma-
  cies

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The public health law is amended by adding  a  new  section
280-b to read as follows:
  S  280-B.  PHARMACY  AUDITS  BY  PHARMACY BENEFIT MANAGERS. 1.   DEFI-
NITIONS. AS USED IN THIS SECTION, THE FOLLOWING  TERMS  SHALL  HAVE  THE
FOLLOWING MEANINGS:
  (A)  "PHARMACY  BENEFIT  MANAGER"  SHALL  HAVE  THE SAME MEANING AS IN
SECTION TWO HUNDRED EIGHTY-A OF THIS ARTICLE.
  (B) "PHARMACY" SHALL MEAN A PHARMACY THAT HAS CONTRACTED WITH A  PHAR-
MACY BENEFIT MANAGER FOR THE PROVISION OF PHARMACY SERVICES.
  2.  WHEN CONDUCTING AN AUDIT OF A PHARMACY'S RECORDS, A PHARMACY BENE-
FIT MANAGER SHALL:
  (A) NOT CONDUCT AN ON-SITE AUDIT OF A PHARMACY AT ANY TIME DURING  THE
FIRST THREE CALENDAR DAYS OF A MONTH;
  (B)  NOTIFY  THE PHARMACY OR ITS CONTRACTING AGENT NO LATER THAN SEVEN
DAYS BEFORE THE DATE OF INITIAL ON-SITE AUDIT;
  (C) LIMIT THE AUDIT PERIOD TO TWENTY-FOUR  MONTHS  AFTER  THE  DATE  A
CLAIM IS SUBMITTED TO OR ADJUDICATED BY THE PHARMACY BENEFIT MANAGER;
  (D) USE THE WRITTEN AND VERIFIABLE RECORDS OF A HOSPITAL, PHYSICIAN OR
OTHER  AUTHORIZED  PRACTITIONER,  WHICH  ARE TRANSMITTED BY ANY MEANS OF
COMMUNICATION, TO VALIDATE THE PHARMACY RECORDS IN ACCORDANCE WITH STATE
AND FEDERAL LAW;
  (E) PROVIDE THE PHARMACY OR ITS CONTRACTING AGENT WITH A COPY  OF  THE
PRELIMINARY  AUDIT  REPORT  WITHIN  ONE  HUNDRED  TWENTY  DAYS AFTER THE
CONCLUSION OF THE AUDIT;
  (F) PROVIDE THE PHARMACY OR ITS CONTRACTING AGENT WITH THE ABILITY  TO
PROVIDE  DOCUMENTATION  TO  ADDRESS  A  DISCREPANCY  OR  AUDIT  FINDING,
PROVIDED THAT SUCH DOCUMENTATION MUST BE RECEIVED BY THE PHARMACY  BENE-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14826-01-6
              

S. 7150                             2

FIT  MANAGER NO LATER THAN THE FIFTEENTH DAY AFTER THE PRELIMINARY AUDIT
REPORT WAS PROVIDED TO THE PHARMACY OR ITS CONTRACTING AGENT; AND
  (G) PROVIDE THE PHARMACY OR ITS CONTRACTING AGENT WITH THE FINAL AUDIT
REPORT  NO  LATER  THAN  SIX  MONTHS  AFTER THE INITIAL AUDIT REPORT WAS
PROVIDED TO THE PHARMACY OR ITS CONTRACTING AGENT.
  3. ANY CLAIM THAT WAS RETROACTIVELY DENIED FOR A CLERICAL ERROR, TYPO-
GRAPHICAL ERROR, SCRIVENER'S ERROR OR COMPUTER ERROR SHALL  BE  PAID  IF
THE  PRESCRIPTION WAS PROPERLY AND CORRECTLY DISPENSED, UNLESS A PATTERN
OF SUCH ERRORS EXISTS,  FRAUDULENT  BILLING  IS  ALLEGED  OR  THE  ERROR
RESULTS IN ACTUAL FINANCIAL LOSS TO THE ENTITY.
  4. THIS SECTION SHALL NOT APPLY TO:
  (A) AUDITS IN WHICH SUSPECTED FRAUDULENT ACTIVITY OR OTHER INTENTIONAL
OR  WILLFUL  MISREPRESENTATION IS EVIDENCED BY A PHYSICAL REVIEW, REVIEW
OF CLAIMS DATA OR STATEMENTS, OR OTHER INVESTIGATIVE METHODS; OR
  (B) AUDITS OF CLAIMS PAID FOR BY FEDERALLY FUNDED PROGRAMS; OR
  (C) CONCURRENT REVIEWS OR DESK AUDITS THAT OCCUR WITHIN THREE BUSINESS
DAYS OF TRANSMISSION OF A CLAIM AND WHERE NO CHARGEBACK OR RECOUPMENT IS
DEMANDED.
  S 2. This act shall take effect on the sixtieth  day  after  it  shall
have become a law.