S.B. 975 Summary

• Establishes mandatory procedures for pharmacy audits conducted by health care providers, insurance companies, pharmacy benefit managers, third-party payors, and related entities in Hawaii

• Requires audits involving clinical or professional judgment be conducted by or in consultation with a licensed pharmacist or the board of pharmacy

• Prohibits use of extrapolation in calculating recoupments or penalties and limits findings to actual overpayments or underpayments rather than projections based on patient diagnoses or similar orders

• Provides pharmacies at least 30 days to correct clerical errors or produce documentation after receiving preliminary audit findings, and establishes a written appeals process with at least 30 days to appeal findings

• Prohibits audit entities from receiving payment based on a percentage of recovered amounts and prevents chargebacks or penalties until the appeals process is exhausted; effective July 1, 2050