Connecticut General Statutes
Chapter 700c - Health Insurance
Section 38a-479iii. - Pharmacy audits.

(a) As used in this section:

(1) “Extrapolation” means the practice of inferring a frequency of dollar amount of overpayments, underpayments, nonvalid claims or other errors on any portion of claims submitted, based on the frequency or dollar amount of overpayments, underpayments, nonvalid claims or other errors actually measured in a sample of claims;
(2) “Pharmacy audit” means an audit, conducted on-site or remotely by or on behalf of a pharmacy benefits manager or plan sponsor of any records of a pharmacy for prescription drugs or prescription devices dispensed by such pharmacy to beneficiaries of a health benefit plan. “Pharmacy audit” does not include (A) a concurrent review or desk audit that occurs within three business days of the pharmacy's transmission of a claim to a pharmacy benefits manager or plan sponsor, or (B) a concurrent review or desk audit where no charge-back or recoupment is demanded by the pharmacy benefits manager or plan sponsor;
(3) “Plan sponsor” has the same meaning as described in section 38a-479aaa.
(b) (1) No entity other than a pharmacy benefits manager or a plan sponsor shall conduct a pharmacy audit unless such entity and manager or sponsor, as applicable, have executed a written agreement for the conducting of pharmacy audits. Prior to conducting a pharmacy audit on behalf of such manager or sponsor, such entity shall notify the pharmacy in writing that such entity and manager or sponsor, as applicable, have executed such agreement.
(2) Except as otherwise provided by state or federal law, an entity conducting a pharmacy audit may have access to a pharmacy's previous pharmacy audit report only if such report was prepared by such entity.
(3) Any information collected during a pharmacy audit shall be confidential by law, except that the entity conducting the pharmacy audit may share such information with the pharmacy benefits manager and the plan sponsor, for which such pharmacy audit is being conducted.
(4) No entity conducting a pharmacy audit shall compensate, directly or indirectly, any of its employees or any contractor such entity contracts with to conduct a pharmacy audit, based on the amount claimed or the actual amount recouped from the pharmacy being audited.
(c) (1) Any entity conducting a pharmacy audit shall:
(A) Provide the pharmacy being audited at least ten business days' prior written notice before conducting a pharmacy audit;
(B) Provide the pharmacy being audited with a masked list of prescriptions to assist the pharmacy to prepare for the pharmacy audit. A list is considered masked if the last two numbers of a prescription are marked with an “X”;
(C) Not initiate or schedule a pharmacy audit during the first five business days of any month for any pharmacy that averages in excess of six hundred prescriptions filled per week, without the express consent of the pharmacy;
(D) Make all determinations regarding the validity of a prescription or other record consistent with sections 20-612 to 20-623, inclusive, or as specified in federal risk management programs;
(E) Accept paper or electronic signature logs that document the delivery of prescription drug and device and pharmacist services to a health plan beneficiary or such beneficiary's agent; and
(F) Provide to the representative of the pharmacy, prior to leaving the pharmacy at the conclusion of an on-site portion of a pharmacy audit, a complete list of records reviewed.
(2) Any pharmacy audit that involves clinical judgment shall be conducted by or in consultation with a licensed pharmacist.
(3) No pharmacy audit shall cover (A) a period of more than twenty-four months after the date a claim was submitted by the pharmacy to the pharmacy benefits manager or plan sponsor unless a longer period is required by law, or (B) more than two hundred fifty prescriptions.
(d) (1) (A) Not later than sixty calendar days after an entity concludes a pharmacy audit and before such entity issues a final pharmacy audit report, such entity shall provide an initial pharmacy audit review to the pharmacy. The pharmacy may, within thirty calendar days after it receives such initial review, respond to the findings in such initial review.
(B) To validate the pharmacy record and delivery, a pharmacy may use authentic and verifiable statements or records, including, but not limited to, medication administration records of a nursing home, assisted living facility, hospital or health care provider with prescriptive authority.
(C) To validate claims in connection with prescriptions or changes in prescriptions, or refills of prescription drugs, a pharmacy may use any valid prescription, including, but not limited to, medication administration records, facsimiles, electronic prescriptions, electronically stored images of prescriptions, electronically created annotations or documented telephone calls from the prescribing health care provider or such provider's agent. Documentation of an oral prescription order that has been verified by the prescribing health care provider shall meet the provisions of this subparagraph for the initial audit review.
(D) No entity conducting a pharmacy audit may use extrapolation to calculate penalties or amounts to be charged back or recouped unless otherwise required by federal requirements or federal plans. No such entity shall include dispensing fees in the calculation of overpayments unless a prescription is considered a misfill. As used in this subparagraph, “misfill” means a prescription that was not dispensed, a prescription error, a prescription whereby the prescriber denied the authorization request or where an extra dispensing fee was charged.
(2) (A) Not later than sixty calendar days after any responses from the pharmacy under subdivision (1) of this subsection are received by the entity conducting the pharmacy audit or, if no such responses are received, after the entity concludes a pharmacy audit, such entity shall issue a final pharmacy audit report that takes into consideration any responses provided to such entity by the pharmacy.
(B) A pharmacy may appeal a final pharmacy audit report in accordance with the procedures established by the entity conducting the pharmacy audit.
(e) (1) No pharmacy shall be subject to charge-back or recoupment for a clerical or recordkeeping error in a required document or record, including a typographical error, scrivener's error or computer error, unless such error resulted in actual financial harm to the pharmacy benefits manager, plan sponsor or a plan beneficiary.
(2) No entity conducting a pharmacy audit or person acting on behalf of such entity shall charge-back or recoup, attempt to charge-back or recoup, or assess or collect penalties from a pharmacy until the time period to file an appeal of a final pharmacy audit report has passed or the appeals process has been exhausted, whichever is later. If an identified discrepancy in a pharmacy audit exceeds twenty-five thousand dollars, future payments to the pharmacy in excess of such amount may be withheld pending adjudication of an appeal. No interest shall accrue for any party during the audit period, beginning with the notice of the pharmacy audit and ending with the conclusion of the appeals process.
(f) The provisions of this section shall not apply to an audit of pharmacy records conducted when (1) fraud or other intentional or wilful misrepresentation is indicated by physical review or review of claims data or statements, or (2) other investigative methods indicate a pharmacy is or has been engaged in criminal wrongdoing, fraud or other intentional or wilful misrepresentation.
(P.A. 14-193, S. 1.)

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