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Senate of Pennsylvania
Session of 2013 - 2014 Regular Session


Posted: March 12, 2013 04:17 PM
From: Senator Richard L. Alloway, II
To: All Senate members
Subject: Pharmacy Audit Integrity Legislation
In the near future, I plan to introduce legislation which would create a Pharmacy Audit Integrity Act to protect pharmacies from unfair auditing practices. Currently no oversight or procedural requirements are in place for the audits performed on pharmacies in Pennsylvania.

This bill would specify procedures for auditing pharmacy records by various health care entities including managed care companies, insurance companies, and pharmacy benefits managers. Among the procedures implements include: providing the pharmacy with adequate notice prior to conducting an on-site audit, that audits involving clinical judgment be done by or in consultation with a pharmacist licensed in Pennsylvania and applying Pennsylvania law and allowing for a specific appeal and review process. Additionally, extrapolation audits, which assess final audit results based only on a sample size, would be specifically prohibited.

The proposed legislation does not prohibit audits from occurring. In fact, it allows for full recovery of finances in any case where fraud or abuse has occurred. The legislation simply sets reasonable standards for fair and uniform audit procedures. These standards would protect pharmacies from being burdened with costly penalties in cases where no fraud or financial losses occurred and where a simple documentation error, often caused by the prescriber, was the only mistake made.

This legislation was introduced last session in the House, formerly House Bill 727. Twenty-two (22) states have passes some form of fair and uniform pharmacy legislation, including the bordering state of Maryland.

Introduced as SB831