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A BILL TO BE ENTITLED
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AN ACT
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relating to procedures for certain audits of pharmacists and |
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pharmacies. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 1369, Insurance Code, is amended by |
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adding Subchapter F to read as follows: |
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SUBCHAPTER F. AUDITS OF PHARMACISTS AND PHARMACIES |
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Sec. 1369.251. DEFINITIONS. In this subchapter: |
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(1) "Desk audit" means an audit conducted by a health |
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benefit plan issuer or pharmacy benefit manager at a location other |
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than the location of the pharmacist or pharmacy. The term includes |
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an audit performed at the offices of the plan issuer or pharmacy |
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benefit manager during which the pharmacist or pharmacy provides |
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requested documents for review by hard copy or by microfiche, disk, |
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or other electronic media. The term does not include a review |
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conducted not later than the third business day after the date a |
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claim is adjudicated provided recoupment is not demanded. |
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(2) "Extrapolation" means a mathematical process or |
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technique used by a health benefit plan issuer or pharmacy benefit |
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manager that administers pharmacy claims for a health benefit plan |
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issuer in the audit of a pharmacy or pharmacist to estimate audit |
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results or findings for a larger batch or group of claims not |
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reviewed by the plan issuer or pharmacy benefit manager. |
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(3) "Health benefit plan" means a plan that provides |
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benefits for medical, surgical, or other treatment expenses |
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incurred as a result of a health condition, a mental health |
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condition, an accident, sickness, or substance abuse, including: |
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(A) an individual, group, blanket, or franchise |
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insurance policy or insurance agreement, a group hospital service |
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contract, or an individual or group evidence of coverage or similar |
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coverage document that is issued by: |
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(i) an insurance company; |
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(ii) a group hospital service corporation |
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operating under Chapter 842; |
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(iii) a health maintenance organization |
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operating under Chapter 843; |
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(iv) an approved nonprofit health |
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corporation that holds a certificate of authority under Chapter |
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844; |
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(v) a multiple employer welfare arrangement |
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that holds a certificate of authority under Chapter 846; |
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(vi) a stipulated premium company operating |
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under Chapter 884; |
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(vii) a fraternal benefit society operating |
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under Chapter 885; |
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(viii) a Lloyd's plan operating under |
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Chapter 941; or |
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(ix) an exchange operating under Chapter |
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942; |
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(B) a small employer health benefit plan written |
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under Chapter 1501; or |
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(C) a health benefit plan issued under Chapter |
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1551, 1575, 1579, or 1601. |
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(4) "On-site audit" means an audit that is conducted |
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at: |
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(A) the location of the pharmacist or pharmacy; |
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or |
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(B) another location at which the records under |
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review are stored. |
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(5) "Pharmacy benefit manager" has the meaning |
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assigned by Section 4151.151. |
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Sec. 1369.252. EXCEPTIONS TO APPLICABILITY OF SUBCHAPTER. |
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This subchapter does not apply to an issuer or provider of health |
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benefits under or a pharmacy benefit manager administering pharmacy |
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benefits under: |
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(1) the state Medicaid program; |
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(2) the federal Medicare program; |
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(3) the state child health plan or health benefits |
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plan for children under Chapter 62 or 63, Health and Safety Code; |
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(4) the TRICARE military health system; |
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(5) a workers' compensation insurance policy or other |
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form of providing medical benefits under Title 5, Labor Code; or |
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(6) a self-funded health benefit plan as defined by |
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the Employee Retirement Income Security Act of 1974 (29 U.S.C. |
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Section 1001 et seq.). |
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Sec. 1369.253. CONFLICT WITH OTHER LAWS. If there is a |
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conflict between this subchapter and a provision of Chapter 843 or |
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1301 related to a pharmacy benefit manager, this subchapter |
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prevails. |
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Sec. 1369.254. AUDIT OF PHARMACIST OR PHARMACY; NOTICE; |
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GENERAL PROVISIONS. (a) Except as provided by Subsection (d), a |
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health benefit plan issuer or pharmacy benefit manager that |
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performs an on-site audit under this subchapter of a pharmacist or |
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pharmacy shall provide the pharmacist or pharmacy reasonable notice |
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of the audit and accommodate the pharmacist's or pharmacy's |
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schedule to the greatest extent possible. The notice required |
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under this subsection must be in writing and must be sent by a means |
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that allows tracking of delivery to the pharmacist or pharmacy not |
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later than the 14th day before the date on which the on-site audit |
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is scheduled to occur. |
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(b) Not later than the seventh day after the date a |
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pharmacist or pharmacy receives notice under Subsection (a), the |
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pharmacist or pharmacy may request that an on-site audit be |
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rescheduled to a mutually convenient date. The request must be |
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reasonably granted. |
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(c) Unless the pharmacist or pharmacy consents in writing, a |
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health benefit plan issuer or pharmacy benefit manager may not |
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schedule or have an on-site audit conducted: |
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(1) except as provided by Subsection (d), before the |
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14th day after the date the pharmacist or pharmacy receives notice |
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under Subsection (a), if applicable; |
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(2) more than twice annually in connection with a |
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particular payor; or |
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(3) during the first five calendar days of January and |
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December. |
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(d) A health benefit plan issuer or pharmacy benefit manager |
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is not required to provide notice before conducting an audit if, |
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after reviewing claims data, written or oral statements of pharmacy |
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staff, wholesalers, or others, or other investigative information, |
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including patient referrals, anonymous reports, or postings on |
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Internet websites, the plan issuer or pharmacy benefit manager |
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suspects the pharmacist or pharmacy subject to the audit committed |
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fraud or made an intentional misrepresentation related to the |
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pharmacy business. The pharmacist or pharmacy may not request that |
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the audit be rescheduled under Subsection (b). |
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(e) A pharmacist or pharmacy may be required to submit |
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documents in response to a desk audit not earlier than the 20th day |
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after the date the health benefit plan issuer or pharmacy benefit |
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manager requests the documents. |
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(f) A contract between a pharmacist or pharmacy and a health |
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benefit plan issuer or pharmacy benefit manager must state detailed |
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audit procedures. If a health benefit plan issuer or pharmacy |
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benefit manager proposes a change to the audit procedures for an |
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on-site audit or a desk audit, the plan issuer or pharmacy benefit |
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manager must notify the pharmacist or pharmacy in writing of a |
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change in an audit procedure not later than the 60th day before the |
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effective date of the change. |
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(g) The list of the claims subject to an on-site audit must |
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be provided in the notice under Subsection (a) to the pharmacist or |
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pharmacy and must identify the claims only by the prescription |
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numbers or a date range for prescriptions subject to the audit. The |
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last two digits of the prescription numbers provided may be |
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omitted. |
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(h) If the health benefit plan issuer or pharmacy benefit |
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manager in an on-site audit or a desk audit applies random sampling |
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procedures to select claims for audit, the sample size may not be |
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greater than 300 individual prescription claims. |
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Sec. 1369.255. COMPLETION OF AUDIT. An audit of a claim |
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under Section 1369.254 must be completed on or before the one-year |
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anniversary of the date the claim is received by the health benefit |
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plan issuer or pharmacy benefit manager. |
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Sec. 1369.256. AUDIT REQUIRING PROFESSIONAL JUDGMENT. A |
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health benefit plan issuer or pharmacy benefit manager that |
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conducts an on-site audit or a desk audit involving a pharmacist's |
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clinical or professional judgment must conduct the audit in |
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consultation with a licensed pharmacist. |
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Sec. 1369.257. ACCESS TO PHARMACY AREA. A health benefit |
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plan issuer or pharmacy benefit manager that conducts an on-site |
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audit may not enter the pharmacy area unless escorted by an |
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individual authorized by the pharmacist or pharmacy. |
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Sec. 1369.258. VALIDATION USING CERTAIN RECORDS |
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AUTHORIZED. A pharmacist or pharmacy that is being audited may: |
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(1) validate a prescription, refill of a prescription, |
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or change in a prescription with a prescription that complies with |
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applicable federal laws and regulations and state laws and rules |
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adopted under Section 554.051, Occupations Code; and |
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(2) validate the delivery of a prescription with a |
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written record of a hospital, physician, or other authorized |
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practitioner of the healing arts. |
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Sec. 1369.259. CALCULATION OF RECOUPMENT; USE OF |
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EXTRAPOLATION PROHIBITED. (a) A health benefit plan issuer or |
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pharmacy benefit manager may not calculate the amount of a |
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recoupment based on: |
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(1) an absence of documentation the pharmacist or |
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pharmacy is not required by applicable federal laws and regulations |
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and state laws and rules to maintain; or |
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(2) an error that does not result in actual financial |
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harm to the patient or enrollee, the health benefit plan issuer, or |
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the pharmacy benefit manager. |
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(b) A health benefit plan issuer or pharmacy benefit manager |
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may not require extrapolation audits as a condition of |
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participation in a contract, network, or program for a pharmacist |
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or pharmacy. |
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(c) A health benefit plan issuer or pharmacy benefit manager |
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may not use extrapolation to complete an on-site audit or a desk |
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audit of a pharmacist or pharmacy. Notwithstanding Subsection |
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(a)(2), the amount of a recoupment must be based on the actual |
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overpayment or underpayment and may not be based on an |
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extrapolation. |
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(d) A health benefit plan issuer or pharmacy benefit manager |
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may not include a dispensing fee amount in the calculation of an |
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overpayment unless: |
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(1) the fee was a duplicate charge; |
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(2) the prescription for which the fee was charged: |
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(A) was not dispensed; or |
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(B) was dispensed: |
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(i) without the prescriber's authorization; |
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(ii) to the wrong patient; or |
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(iii) with the wrong instructions; or |
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(3) the wrong drug was dispensed. |
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Sec. 1369.260. CLERICAL OR RECORDKEEPING ERROR; FRAUD |
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ALLEGATION. (a) An unintentional clerical or recordkeeping error, |
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such as a typographical error, scrivener's error, or computer |
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error, found during an on-site audit or a desk audit: |
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(1) is not prima facie evidence of fraud or |
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intentional misrepresentation; and |
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(2) may not be the basis of a recoupment unless the |
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error results in actual financial harm to a patient or enrollee, |
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health benefit plan issuer, or pharmacy benefit manager. |
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(b) If the health benefit plan issuer or pharmacy benefit |
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manager alleges that the pharmacist or pharmacy committed fraud or |
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intentional misrepresentation described by Subsection (a), the |
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health benefit plan issuer or pharmacy benefit manager must state |
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the allegation in the final audit report required by Section |
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1369.264. |
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(c) After an audit is initiated, a pharmacist or pharmacy |
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may resubmit a claim described by Subsection (a) if the deadline for |
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submission of a claim under Section 843.337 or 1301.102 has not |
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expired. |
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Sec. 1369.261. ACCESS TO PREVIOUS AUDIT REPORTS; UNIFORM |
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AUDIT STANDARDS. (a) Except as provided by Subsection (b), a |
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health benefit plan issuer or pharmacy benefit manager may have |
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access to an audit report of a pharmacist or pharmacy only if the |
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report was prepared in connection with an audit conducted by the |
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health benefit plan issuer or pharmacy benefit manager. |
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(b) A health benefit plan issuer or pharmacy benefit manager |
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may have access to audit reports other than the reports described by |
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Subsection (a) if, after reviewing claims data, written or oral |
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statements of pharmacy staff, wholesalers, or others, or other |
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investigative information, including patient referrals, anonymous |
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reports, or postings on Internet websites, the plan issuer or the |
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pharmacy benefit manager suspects the audited pharmacist or |
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pharmacy committed fraud or made an intentional misrepresentation |
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related to the pharmacy business. |
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(c) An auditor must conduct an on-site audit or a desk audit |
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of similarly situated pharmacists or pharmacies under the same |
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audit standards. |
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Sec. 1369.262. COMPENSATION OF AUDITOR. An individual |
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performing an on-site audit or a desk audit may not directly or |
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indirectly receive compensation based on a percentage of the amount |
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recovered as a result of the audit. |
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Sec. 1369.263. CONCLUSION OF AUDIT; SUMMARY; PRELIMINARY |
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AUDIT REPORT. (a) At the conclusion of an on-site audit or a desk |
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audit, the health benefit plan issuer or pharmacy benefit manager |
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shall: |
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(1) provide to the pharmacist or pharmacy a summary of |
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the audit findings; and |
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(2) allow the pharmacist or pharmacy to respond to |
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questions and alleged discrepancies, if any, and comment on and |
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clarify the findings. |
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(b) Not later than the 60th day after the date the audit is |
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concluded, the health benefit plan issuer or pharmacy benefit |
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manager shall send by a means that allows tracking of delivery to |
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the pharmacist or pharmacy a preliminary audit report stating the |
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results of the audit and a list identifying documentation, if any, |
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required to resolve discrepancies, if any, found as a result of the |
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audit. |
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(c) The pharmacist or pharmacy may, by providing |
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documentation or otherwise, challenge a result or remedy a |
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discrepancy stated in the preliminary audit report not later than |
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the 30th day after the date the pharmacist or pharmacy receives the |
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report. |
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(d) The pharmacist or pharmacy may request an extension to |
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provide documentation supporting a challenge. The request shall be |
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reasonably granted. A health benefit plan issuer or pharmacy |
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benefit manager that grants an extension is not subject to the |
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deadline to send the final audit report under Section 1369.264. |
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Sec. 1369.264. FINAL AUDIT REPORT. Not later than the 120th |
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day after the date the pharmacist or pharmacy receives a |
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preliminary audit report under Section 1369.263, the health benefit |
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plan issuer or pharmacy benefit manager shall send by a means that |
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allows tracking of delivery to the pharmacist or pharmacy a final |
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audit report that states: |
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(1) the audit results after review of the |
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documentation submitted by the pharmacist or pharmacy in response |
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to the preliminary audit report; and |
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(2) the audit results, including a description of all |
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alleged discrepancies and explanations for and the amount of |
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recoupments claimed after consideration of the pharmacist's or |
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pharmacy's response to the preliminary audit report. |
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Sec. 1369.265. CERTAIN AUDITS EXEMPT FROM DEADLINES. A |
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health benefit plan issuer or pharmacy benefit manager is not |
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subject to the deadlines for sending a report under Sections |
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1369.263 and 1369.264 if, after reviewing claims data, written or |
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oral statements of pharmacy staff, wholesalers, or others, or other |
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investigative information, including patient referrals, anonymous |
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reports, or postings on Internet websites, the plan issuer or |
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pharmacy benefit manager suspects the audited pharmacist or |
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pharmacy committed fraud or made an intentional misrepresentation |
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related to the pharmacy business. |
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Sec. 1369.266. RECOUPMENT AND INTEREST CHARGED AFTER AUDIT. |
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(a) If an audit under this subchapter is conducted, the health |
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benefit plan issuer or pharmacy benefit manager: |
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(1) may recoup from the pharmacist or pharmacy an |
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amount based only on a final audit report; and |
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(2) may not accrue or assess interest on an amount due |
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until the date the pharmacist or pharmacy receives the final audit |
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report under Section 1369.264. |
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(b) The limitations on recoupment and interest accrual or |
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assessment under Subsection (a) do not apply to a health benefit |
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plan issuer or pharmacy benefit manager that, after reviewing |
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claims data, written or oral statements of pharmacy staff, |
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wholesalers, or others, or other investigative information, |
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including patient referrals, anonymous reports, or postings on |
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Internet websites, suspects the audited pharmacist or pharmacy |
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committed fraud or made an intentional misrepresentation related to |
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the pharmacy business. |
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Sec. 1369.267. WAIVER PROHIBITED. The provisions of this |
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subchapter may not be waived, voided, or nullified by contract. |
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Sec. 1369.268. REMEDIES NOT EXCLUSIVE. This subchapter may |
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not be construed to waive a remedy at law available to a pharmacist |
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or pharmacy. |
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Sec. 1369.269. ENFORCEMENT; RULES. The commissioner may |
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enforce this subchapter and adopt and enforce reasonable rules |
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necessary to accomplish the purposes of this subchapter. |
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Sec. 1369.270. LEGISLATIVE DECLARATION. Except as provided |
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by Section 1369.252, it is the intent of the legislature that the |
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requirements contained in this subchapter regarding the audit of |
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claims to providers who are pharmacists or pharmacies apply to all |
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health benefit plan issuers and pharmacy benefit managers unless |
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otherwise prohibited by federal law. |
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SECTION 2. Section 1301.001, Insurance Code, as amended by |
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Chapters 288 (H.B. 1772) and 798 (H.B. 2292), Acts of the 82nd |
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Legislature, Regular Session, 2011, is amended by reenacting and |
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amending Subdivision (1) and reenacting Subdivision (1-a) to read |
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as follows: |
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(1) "Exclusive provider benefit plan" means a benefit |
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plan in which an insurer excludes benefits to an insured for some or |
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all services, other than emergency care services required under |
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Section 1301.155, provided by a physician or health care provider |
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who is not a preferred provider. ["Extrapolation" means a
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mathematical process or technique used by an insurer or pharmacy
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benefit manager that administers pharmacy claims for an insurer in
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the audit of a pharmacy or pharmacist to estimate audit results or
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findings for a larger batch or group of claims not reviewed by the
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insurer or pharmacy benefit manager.] |
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(1-a) "Health care provider" means a practitioner, |
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institutional provider, or other person or organization that |
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furnishes health care services and that is licensed or otherwise |
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authorized to practice in this state. The term includes a |
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pharmacist and a pharmacy. The term does not include a physician. |
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SECTION 3. The following provisions of the Insurance Code |
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are repealed: |
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(1) Section 843.002(9-a); |
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(2) Section 843.3401; and |
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(3) Section 1301.1041. |
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SECTION 4. The changes in law made by this Act apply only to |
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contracts between a pharmacist or pharmacy and a health benefit |
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plan issuer or pharmacy benefit manager executed or renewed, and |
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audits conducted under those contracts, on or after the effective |
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date of this Act. Contracts entered into or renewed, and audits |
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conducted under those contracts, before the effective date of this |
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Act are governed by the law in effect immediately before the |
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effective date of this Act, and that law is continued in effect for |
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that purpose. |
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SECTION 5. This Act takes effect September 1, 2013. |