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Sunshine State News: Pharmacy ‘Fair Audit’ Bill Still Waiting for a Hearing

Wednesday, April 03, 2013

A bill that Florida pharmacy owners say would add uniformity and consistency to auditing practices by insurance companies did not get its first committee hearing Tuesday afternoon, though lobbyists for the measure tell Sunshine State News they expect it to receive a hearing, and to pass, next week.

“I’ve been swayed by talking to some small mom-‘n’-pop pharmacies that need help,” Senate Health Policy Committee Chairman Aaron Bean, R-Jacksonville, told legislators and members of the public, after apologizing that the bill would not be heard Tuesday. “I’m all for getting bad guys, but we’ve gone too far … We’ll hopefully hear that bill next committee time.”

SB 1358 (“Audits of Pharmacy Records”) was supposed to be heard by the Senate Health Policy Committee Tuesday afternoon, but the panel did not get to it, so backlogged was its agenda with 11 other pieces of legislation. The bill is being sponsored by Sen. Anitere Flores, R-Miami. Its House companion, HB 791 (sponsored by Rep. Manny Diaz, R-Hialeah) failed for much the same reason last week: the Health Innovation Subcommittee failed to get around to it.

Kevin Cate, a spokesman for the Pharmacy Choice and Access Now coalition, told Sunshine State News he was confident the bill would pass the committee sometime next week.

“Senator Bean has indicated he supports the bill and will give it a hearing,” he said. “We’re taking him at his word.”

Health insurance companies, including Medicare and Medicaid, routinely audit pharmacies through third-party pharmacy benefit managers (PBMs), who may or may not be licensed pharmacists. If passed by the Legislature, SB 1358 would:

— require one week prior notice before conducting an audit;

— require the audit to be conducted by a Florida-licensed pharmacist;

— prohibit penalties for clerical errors in pharmacy record keeping without proof of intent to commit fraud;

— allow 10 days for pharmacists to produce documentation to address any discrepancies found during the audit;

— deliver audit reports to pharmacists within 90 days after an audit is completed;

— establish an appointed peer-review panel of unfavorable audit reports; and

— limit auditing period to one calendar year.

“Our small businesses are being hurt by unannounced audits by nonstate licensed pharmacists seeking clerical errors to collect cash back for PBMs,” Jim Koivisto, owner of Halliday’s & Koivisto’s Pharmacy in Jacksonville, was quoted in a press release issued before the Senate committee was scheduled to hear the bill. “We are simply asking lawmakers to level the playing field so we can provide the proper paperwork in a timely fashion without being forced to halt our businesses, which ultimately hurts our customers and our community.”

“The current auditing system is deeply flawed,” said Paul McMellen, owner of RxExpress Pharmacy in Navarre. “Auditors treat minor clerical and physician errors as fraud. They only focus on brand name prescriptions to avoid paying for higher-end medications. And because it takes six weeks to get the results of an audit, there is no time to question or challenge the outcome. It is simply unfair to people who are only trying to serve their communities.”

“Standards should be established around the timing of audits, and the rights of pharmacists to challenge unfavorable reports,” said Thomas Slaughter, owner of Mulberry Pharmacy in Mulberry. “Further, the PBMs should be prevented from recouping funds from claims that are denied based on simple clerical errors in pharmacy record-keeping. Regrettably, some PBMs are using the audit process as an opportunity to generate profit from the honest mistakes of pharmacists rather than focusing on actual fraud. Our small company cannot match the staffing levels and budgets of the PBMs. Without agreed-upon standards guiding the audit process, we are at their mercy. Senate Bill 1358 would codify the standards needed to ensure fairness and our small businesses need this legislation.”

Similar legislation was recently passed in Georgia.

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