Audits of pharmacy benefits.

Existing law, the Pharmacy Law, provides for the licensure and regulation of pharmacies by the California State Board of Pharmacy. Existing law provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and for the regulation of health insurers by the Department of Insurance. Existing law requires health care service plan contracts and health insurance policies to provide coverage for specified benefits and requires contracts between plans or insurers and providers to contain provisions requiring a fast, fair, and cost-effective dispute resolution mechanism. This bill would impose specified requirements on an audit of pharmacy services provided to beneficiaries of a health benefit plan. Among other things, the bill would prohibit the entity conducting the audit from receiving payment on any basis tied to the amount claimed or recovered from the pharmacy. The bill would require the entity conducting a pharmacy audit to deliver a preliminary audit report to the pharmacy and to give the pharmacy an opportunity to respond to the report. The bill would require the entity to deliver a final audit report to the pharmacy and to establish, in its contract with the pharmacy, a process for appealing the findings of that report, as specified. The bill would allow either party who, following the appeal, is not satisfied with the appeal, to seek relief under the terms of the contract. The bill would provide that if an identified discrepancy for a single audit exceeds $30,000, future payments to the pharmacy in excess of $30,000 may be withheld pending adjudication of an appeal. The bill would prohibit interest accruing for either party during pendency of the audit, as specified. The bill would require that when the entity is using extrapolation, as defined, in calculating penalties or amounts to be recouped from a pharmacy, that the pharmacy be given an opportunity to provide evidence validating certain orders. The bill also would prohibit a pharmacy from being subject to recoupment of funds for a clerical or recordkeeping error, as defined. The bill would enact other related provisions.