SB 1602: Financial Audits of Pharmacies

• Expands audit requirements to cover Medicaid-related, third-party payor, and third-party administrator records of pharmacies, with audits conducted by licensed pharmacists and with at least 1 week's prior notice.

• Shields pharmacies from financial recoupment for clerical errors (typographical, scrivener's, computer, or recordkeeping errors) unless intent to commit fraud is proven, and prohibits extrapolation methods for calculating penalties or recoupment.

• Requires preliminary audit reports within 90 days of audit conclusion and final reports within 6 months, with establishment of ad hoc peer review panels by the relevant agency or third-party payor to allow appeals without requiring legal counsel.

• Applies audit criteria to Medicaid claims submitted after July 11, 2003, and third-party claims submitted after July 1, 2011, with audits limited to 1 calendar year periods and prohibited during the first 5 days of any month.

• Prohibits third-party payors and state agencies from requiring mail delivery of pharmacy services and prescription drugs by contract or administrative rule, though incentive programs for mail delivery are permitted.