1. A. The entity conducting an audit shall:

   1. 1. Identify and describe the audit procedures in the pharmacy contract;
   2. 2. For an on-site audit, give the pharmacy written notice at least two (2) weeks prior to conducting the initial on-site audit for each audit cycle;
   3. 3. For an on-site audit, not interfere with the delivery of pharmacist services to a patient and shall utilize every reasonable effort to minimize inconvenience and disruption to pharmacy operations during the audit process;
   4. 4. Conduct any audit involving clinical or professional judgment by means of or in consultation with a licensed pharmacist;
   5. 5. Not consider as fraud any clerical or record-keeping error, such as a typographical error, scrivener’s error, or computer error regarding a required document or record; however, such errors may be subject to recoupment. A person shall not be subject to criminal penalties for errors provided for in this paragraph without proof of intent to commit fraud.
   6. 6. Permit a pharmacy to use the records of a hospital, physician, or other authorized practitioner of the healing arts for drugs or medicinal supplies written or transmitted by any means of communication for purposes of validating the pharmacy record with respect to orders or refills of a legend or narcotic drug;
   7. 7. Base a finding of an overpayment or underpayment on a projection based on the number of patients served having similar diagnoses or on the number of similar orders or refills for similar drugs; provided, recoupment of claims shall be based on the actual overpayment or underpayment of each identified claim. A projection for overpayment or underpayment may be used to determine recoupment as part of a settlement as agreed to by the pharmacy;
   8. 8. Not include the dispensing fee amount in a finding of an overpayment unless a prescription was not actually dispensed or a physician denied authorization or as otherwise agreed to by contract;
   9. 9. Audit each pharmacy under the same standards and parameters as other similarly situated pharmacies audited by the entity;
   10. 10. Not exceed two (2) years from the date the claim was submitted to or adjudicated by a managed care company, nonprofit hospital or medical service organization, insurance company, third-party payor, pharmacy benefits manager, a health program administered by a department of this state, or any entity that represents the companies, groups, or departments for the period covered by an audit;
   11. 11. Not schedule or initiate an audit during the first five (5) calendar days of any month due to the high volume of prescriptions filled in the pharmacy during that time unless otherwise consented to by the pharmacy; and
   12. 12. Disclose to any plan sponsor whose claims were included in the audit any money recouped in the audit.

2. B. The entity conducting the audit shall provide the pharmacy with a written report of the audit and shall:

   1. 1. Deliver a preliminary audit report to the pharmacy within one hundred twenty (120) days after conclusion of the audit;
   2. 2. Allow the pharmacy at least sixty (60) days following receipt of the preliminary audit report in which to produce documentation to address any discrepancy found during the audit; provided, however, a pharmacy may request an extension, not to exceed an additional sixty (60) days;
   3. 3. Deliver a final audit report to the pharmacy signed by the auditor within six (6) months after receipt of the preliminary audit report or final appeal, as provided for in Section 4 of this act, whichever is later;
   4. 4. Recoup any disputed funds after final internal disposition of the audit, including the appeals process as provided for in Section 4 of this act. Should the identified discrepancy for an individual audit exceed Twenty-five Thousand Dollars ($25,000.00), future payments to the pharmacy in excess of Twenty-five Thousand Dollars ($25,000.00) may be withheld pending finalization of the audit; and
   5. 5. Not accrue interest during the audit period.
3. C. Each entity conducting an audit shall provide a copy of the final audit results, and a final audit report upon request, after completion of any review process to the plan sponsor.

Laws 2008, HB 2490, c. 137, § 3, eff. November 1, 2008.