1 STATE OF OKLAHOMA
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2 2nd Session of the 59th Legislature (2024)
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3 SENATE BILL 1670 By: McCortney
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6 AS INTRODUCED
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7 An Act relating to pharmacy benefits management;
7 amending 59 O.S. 2021, Sections 356.2, 356.3, 357,
8 and 360, which relate to the Pharmacy Audit Integrity
8 Act and pharmacy reimbursement; modifying audit
9 notice requirements; requiring certain recouped funds
9 from audit to be paid to patients first; making
10 certain audits null and void; requiring certain
10 notice to include certain declaration; modifying
11 definition; modifying reimbursement appeal process;
11 requiring reimbursement at certain rate under certain
12 circumstances; updating statutory references; and
12 providing an effective date.
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15 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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16 SECTION 1. AMENDATORY 59 O.S. 2021, Section 356.2, is
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17 amended to read as follows:
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18 Section 356.2. A. The entity conducting an audit of a pharmacy
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19 shall:
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20 1. Identify and specifically describe the audit and appeal
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21 procedures in the pharmacy contract. Prescription claim
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22 documentation and record-keeping requirements shall not exceed the
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23 requirements set forth by the Oklahoma Pharmacy Act or other
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24 applicable state or federal laws or regulations;
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 1 2. Give the pharmacy written notice by certified letter to the
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2 pharmacy and the pharmacy’s contracting agent, including
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3 identification of specific prescription numbers and fill dates to be
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4 audited, at least two (2) weeks fifteen (15) calendar days prior to
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5 conducting the audit, including, but not limited to, an on-site
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6 audit, a desk audit, or a wholesale purchase audit, request for
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7 documentation related to the dispensing of a prescription drug or
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8 any reimbursed activity by a pharmacy provider; provided, however,
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9 that wholesale purchase audits shall require a minimum of thirty
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10 (30) calendar days’ written notice. For an on-site audit, the audit
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11 date shall be the date the on-site audit occurs. For all other
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12 audit types, the audit date shall be the date the pharmacy provides
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13 the documentation requested in the audit notice. The pharmacy shall
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14 have the opportunity to reschedule the audit no more than seven (7)
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15 calendar days from the date designated on the original audit
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16 notification;
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17 3. Not interfere with the delivery of pharmacist services to a
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18 patient and shall utilize every reasonable effort to minimize
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19 inconvenience and disruption to pharmacy operations during the audit
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20 process;
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21 4. Conduct any audit involving clinical or professional
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22 judgment by means of or in consultation with a licensed pharmacist;
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23 5. Not consider as fraud any clerical or record-keeping error,
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24 such as a typographical error, scrivener’s error or computer error,
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 1 including, but not limited to, a miscalculated day supply,
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2 incorrectly billed prescription written date or prescription origin
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3 code, and such errors shall not be subject to recoupment. The
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4 pharmacy shall have the right to submit amended claims
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5 electronically to correct clerical or record-keeping errors in lieu
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6 of recoupment. To the extent that an audit results in the
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7 identification of any clerical or record-keeping errors such as
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8 typographical errors, scrivener’s errors or computer errors in a
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9 required document or record, the pharmacy shall not be subject to
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10 recoupment of funds by the pharmacy benefits manager unless the
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11 pharmacy benefits manager can provide proof of intent to commit
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12 fraud. A person shall not be subject to criminal penalties for
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13 errors provided for in this paragraph without proof of intent to
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14 commit fraud;
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15 6. Permit a pharmacy to use the records of a hospital,
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16 physician, or other authorized practitioner of the healing arts for
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17 drugs or medicinal supplies written or transmitted by any means of
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18 communication for purposes of validating the pharmacy record with
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19 respect to orders or refills of a legend or narcotic drug;
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20 7. Not include the dispensing fee amount or the actual invoice
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21 cost of the prescription dispensed in a finding of an audit
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22 recoupment unless a prescription was not actually dispensed or a
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23 physician denied authorization of a dispensing order;
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 1 8. Audit each pharmacy under identical standards, regularity
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2 and parameters as other similarly situated pharmacies and all
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3 pharmacies owned or managed by the pharmacy benefits manager
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4 conducting or having conducted the audit;
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5 9. Not exceed one (1) year from the date the claim was
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6 submitted to or adjudicated by a managed care company, nonprofit
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7 hospital or medical service organization, insurance company, third-
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8 party payor, pharmacy benefits manager, a health program
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9 administered by a department of this state, or any entity that
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10 represents the companies, groups, or departments for the period
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11 covered by an audit;
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12 10. Not schedule or initiate an audit during the first seven
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13 (7) calendar days of any month unless otherwise consented to by the
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14 pharmacy;
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15 11. Disclose to any plan sponsor whose claims were included in
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16 the audit any money recouped in the audit; and
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17 12. Not require pharmacists to break open packaging labeled
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18 “for single-patient-use only”. Packaging labeled “for single-
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19 patient-use only” shall be deemed to be the smallest package size
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20 available; and
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21 13. Upon recoupment of funds from a pharmacy, refund first to
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22 the patient the portion of the recovered funds that were originally
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23 paid by the patient.
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 1 B. 1. Any entity that conducts wholesale purchase review
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2 during an audit of a pharmacist or pharmacy shall not require the
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3 pharmacist or pharmacy to provide a full dispensing report.
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4 Wholesaler invoice reviews shall be limited to verification of
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5 purchase inventory specific to the pharmacy claims paid by the
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6 health benefits plan or pharmacy benefits manager conducting the
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7 audit.
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8 2. Any entity conducting an audit shall not identify or label a
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9 prescription claim as an audit discrepancy when:
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10 a. the National Drug Code for the dispensed drug is in a
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11 quantity that is a subunit or multiple of the drug
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12 purchased by the pharmacist or pharmacy as supported
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13 by a wholesale invoice,
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14 b. the pharmacist or pharmacy dispensed the correct
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15 quantity of the drug according to the prescription,
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16 and
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17 c. the drug dispensed by the pharmacist or pharmacy
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18 shares all but the last two digits of the National
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19 Drug Code of the drug reflected on the supplier
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20 invoice.
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21 3. An entity conducting an audit shall accept as evidence,
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22 subject to validation, to support the validity of a pharmacy claim
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23 related to a dispensed drug:
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 1 a. redacted copies of supplier invoices in the
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2 pharmacist’s or pharmacy’s possession, or
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3 b. invoices and any supporting documents from any
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4 supplier as authorized by federal or state law to
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5 transfer ownership of the drug acquired by the
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6 pharmacist or pharmacy.
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7 4. An entity conducting an audit shall provide, no later than
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8 five (5) business days after the date of a request by the pharmacist
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9 or pharmacy, all supporting documents the pharmacist’s or pharmacy’s
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10 purchase suppliers provided to the health benefits plan issuer or
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11 pharmacy benefits manager.
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12 C. A pharmacy shall be allowed to provide the pharmacy’s
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13 computerized patterned medical records or the records of a hospital,
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14 physician, or other authorized practitioner of the healing arts for
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15 drugs or medicinal supplies written or transmitted by any means of
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16 communication for purposes of supporting the pharmacy record with
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17 respect to orders or refills of a legend or narcotic drug.
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18 D. The entity conducting the audit shall not audit more than
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19 fifty prescriptions, with specific date of service, per calendar
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20 year. The annual limit to the number of prescription claims audited
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21 shall be inclusive of all audits, including any prescription-related
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22 documentation requests from the health insurer, pharmacy benefits
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23 manager or any third-party company conducting audits on behalf of
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 1 any health insurer or pharmacy benefits manager during a calendar
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2 year.
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3 E. If paper copies of records are requested by the entity
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4 conducting the audit, the entity shall pay twenty-five cents ($0.25)
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5 per page to cover the costs incurred by the pharmacy. The entity
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6 conducting the audit shall provide the pharmacy with accurate
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7 instructions, including any required form for obtaining
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8 reimbursement for the copied records.
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9 F. The entity conducting the audit shall:
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10 1. Deliver a preliminary audit findings report to the pharmacy
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11 and the pharmacy’s contracting agent within forty-five (45) calendar
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12 days of conducting the audit;
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13 2. Allow the pharmacy at least ninety (90) calendar days
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14 following receipt of the preliminary audit findings report in which
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15 to produce documentation to address any discrepancy found during the
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16 audit; provided, however, a pharmacy may request an extension, not
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17 to exceed an additional forty-five (45) calendar days;
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18 3. Deliver a final audit findings report to the pharmacy and
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19 the pharmacy’s contracting agent signed by the auditor within ten
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20 (10) calendar days after receipt of additional documentation
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21 provided by the pharmacy, as provided for in Section 356.3 of this
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22 title;
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23 4. Allow the pharmacy to reverse and resubmit claims
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24 electronically within thirty (30) days of receipt of the final audit
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 1 report in lieu of the auditing entity recouping discrepant claim
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2 amounts from the pharmacy;
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3 5. Not recoup any disputed funds until after final disposition
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4 of the audit findings, including the appeals process as provided for
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5 in Section 356.3 of this title; and
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6 6. Not accrue interest during the audit and appeal period.
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7 G. Each entity conducting an audit shall provide a copy of the
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8 final audit results, and a final audit report upon request, after
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9 completion of any review process to the plan sponsor.
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10 H. 1. The full amount of any recoupment on an audit shall be
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11 refunded to the plan sponsor. Except as provided for in paragraph 2
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12 of this subsection, a charge or assessment for an audit shall not be
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13 based, directly or indirectly, on amounts recouped.
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14 2. This subsection does not prevent the entity conducting the
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15 audit from charging or assessing the responsible party, directly or
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16 indirectly, based on amounts recouped if both of the following
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17 conditions are met:
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18 a. the plan sponsor and the entity conducting the audit
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19 have a contract that explicitly states the percentage
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20 charge or assessment to the plan sponsor, and
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21 b. a commission to an agent or employee of the entity
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22 conducting the audit is not based, directly or
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23 indirectly, on amounts recouped.
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 1 I. Unless superseded by state or federal law, auditors shall
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2 only have access to previous audit reports on a particular pharmacy
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3 conducted by the auditing entity for the same pharmacy benefits
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4 manager, health plan or insurer. An auditing vendor contracting
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5 with multiple pharmacy benefits managers or health insurance plans
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6 shall not use audit reports or other information gained from an
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7 audit on a pharmacy to conduct another audit for a different
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8 pharmacy benefits manager or health insurance plan.
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9 J. An audit shall be considered null and void if the entity
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10 conducting the audit fails to follow any of the requirements under
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11 this section. Any violation of this section by a pharmacy benefits
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12 manager or auditing entity shall be deemed a violation of the
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13 Pharmacy Audit Integrity Act.
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14 SECTION 2. AMENDATORY 59 O.S. 2021, Section 356.3, is
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15 amended to read as follows:
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16 Section 356.3. A. Each entity conducting an audit shall
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17 establish a written appeals process under which a pharmacy may
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18 appeal an unfavorable preliminary audit report and/or final audit
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19 report to the entity.
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20 B. Following an appeal, if the entity finds that an unfavorable
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21 audit report or any portion thereof is unsubstantiated, the entity
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22 shall dismiss the audit report or the unsubstantiated portion of the
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23 audit report without any further action.
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 1 C. Any final audit report, following the final audit appeal
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2 period, with a finding of fraud or willful misrepresentation shall
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3 be referred to the district attorney having proper jurisdiction or
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4 the Attorney General for prosecution upon completion of the appeals
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5 process.
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6 D. This act does section and Section 356.2 of this title do not
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7 apply to any audit, review or investigation that is initiated based
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8 on or that involves fraud, willful misrepresentation or abuse so
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9 long as the auditing entity includes in the notice of audit a clear
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10 and conspicuous declaration that the audit is being conducted under
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11 suspicion of fraud, willful misrepresentation, or abuse and a
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12 statement of facts that supports the reasonable suspicion.
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13 SECTION 3. AMENDATORY 59 O.S. 2021, Section 357, is
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14 amended to read as follows:
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15 Section 357. As used in this act section through Section 360 of
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16 this title:
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17 1. “Covered entity” means a nonprofit hospital or medical
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18 service organization, insurer, health coverage plan or health
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19 maintenance organization; a health program administered by the state
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20 in the capacity of provider of health coverage; or an employer,
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21 labor union, or other entity organized in the state that provides
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22 health coverage to covered individuals who are employed or reside in
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23 the state. This term does not include a health plan that provides
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24 coverage only for accidental injury, specified disease, hospital
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 1 indemnity, disability income, or other limited benefit health
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2 insurance policies and contracts that do not include prescription
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3 drug coverage;
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4 2. “Covered individual” means a member, participant, enrollee,
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5 contract holder or policy holder or beneficiary of a covered entity
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6 who is provided health coverage by the covered entity. A covered
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7 individual includes any dependent or other person provi