NOTE: The governor signed this measure on 4/8/2013.
      
      
      HOUSE BILL 13-1221
      
      
      BY REPRESENTATIVE(S) May, Joshi, Ginal, Hullinghorst, Schafer,
      Young;
      also SENATOR(S) Tochtrop, Crowder.
      
      
      Concerning standards for the audit of pharmacies.
       
      
      Be it enacted by the General Assembly of the State of Colorado:
      
           SECTION 1.  In Colorado Revised Statutes, add 10-16-122.5 as
      follows:
      
           10-16-122.5.  Pharmacy benefit manager - audit of pharmacies.
      (1)  A pharmacy benefit manager, a carrier, or an entity acting on
      behalf of a pharmacy benefit manager or a carrier that audits a
      pharmacy shall:
      
           (a)  Give the pharmacy at least seven days' written notice
      prior to commencing an audit;
      
           (b)  Conduct the audit by or in consultation with a licensed
      pharmacist to the extent the audit requires the application of
      clinical or professional judgment;
      
           (c)  Not use extrapolation or other statistical expansion
      techniques in calculating the amount of a recoupment or penalty
      resulting from an audit of a pharmacy;
      
           (d)  Allow the pharmacy to produce additional claims
      documentation using any commercially reasonable method,
      including facsimile, mail, or electronic claims submission, if an
      audit results in the dispute or denial of a claim;
      
           (e)  Establish a written appeals process that includes
      procedures to allow a pharmacy to appeal to the pharmacy
      benefit manager or the carrier the preliminary reports resulting
      from the audit and any resulting recoupment or penalty; and
      
           (f)  Not subject a pharmacy to the recoupment of funds when
      an audit results in the identification of a clerical error in a
      required document or record unless the error results in actual
      financial harm to the pharmacy benefit manager, a health benefit
      plan providing prescription drug benefits that are managed by the
      pharmacy benefit manager, or a consumer.
      
           (2)  A pharmacy may use verifiable statements or records,
      including medication administration records of a nursing home,
      assisted living facility, hospital, physician, or other authorized
      practitioner, to validate the pharmacy record and delivery.
      
           (3)  Any legal prescription may be used to validate claims in
      connection with prescriptions, refills, or changes in prescriptions,
      including medication administration records, faxes, electronic
      prescriptions, or documented telephone calls from the prescriber
      or the prescriber's agent.
      
           (4)  The time period covered by an audit may not exceed
      twenty-four months from the date that the prescription was
      submitted to or adjudicated by the entity, unless a longer period
      is required by state or federal law.
      
           (5)  The time periods specified are waived for audits of
      pharmacy records when fraud or other intentional or willful
      misrepresentation is indicated through review of claims data,
      statements, physical review, or other investigative methods. The
      pharmacy benefit manager, carrier, or entity acting on behalf of
      the pharmacy benefit manager or carrier shall deliver to the
      pharmacy at the time of the audit a written or verbal explanation
      of the information that led to the conclusion that there is an
      indication of fraud or other intentional or willful
      misrepresentation. The explanation is not required if law
      enforcement has intervened due to the indication of fraud.
      
           (6)  As used in this section, "pharmacy" includes any entity
      authorized under article 42.5 of title 12, C.R.S., to dispense
      prescription drugs.
      
           SECTION 2.  Act subject to petition - effective date. This act
      takes effect at 12:01 a.m. on the day following the expiration of the
      ninety-day period after final adjournment of the general assembly (August
      7, 2013, if adjournment sine die is on May 8, 2013); except that, if a
      referendum petition is filed pursuant to section 1 (3) of article V of the state
      constitution against this act or an item, section, or part of this act within
      such period, then the act, item, section, or part will not take effect unless
      approved by the people at the general election to be held in November 2014
      and, in such case, will take effect on the date of the official declaration of
      the vote thereon by the governor.
      
      
      
      
      ________________________________________________________
      Mark Ferrandino                         John P. Morse
      SPEAKER OF THE HOUSE                     PRESIDENT OF
      OF REPRESENTATIVES                         THE SENATE
      
      
      
      
      
      
      ____________________________  ____________________________
      Marilyn Eddins                      Cindi L. Markwell
      CHIEF CLERK OF THE HOUSE                 SECRETARY OF
      OF REPRESENTATIVES                         THE SENATE
      
      
      
      
                  APPROVED________________________________________
      
      
      
      
      
                                    _________________________________________
                                    John W. Hickenlooper
                                    GOVERNOR OF THE STATE OF COLORADO