I 

112TH CONGRESS 

2D SESSION H. R. 4215 

To amend title XVIII of the Social Security Act to provide for pharmacy 

benefits manager standards under the Medicare prescription drug program to further fair audits of and payments to pharmacies. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 20, 2012 

Mrs. MCMORRIS RODGERS introduced the following bill; which was referred 

to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined 

by the Speaker, in each case for consideration of such provisions as fall 

within the jurisdiction of the committee concerned 

A BILL 

To amend title XVIII of the Social Security Act to provide 

for pharmacy benefits manager standards under the 

Medicare prescription drug program to further fair audits of and payments to pharmacies. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Medicare Pharmacy 

5 Transparency and Fair Auditing Act’’. 


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1 SEC. 2. PHARMACY BENEFITS MANAGER STANDARDS 

2 UNDER MEDICARE FOR FAIR AUDITS AND 

3 PAYMENTS TO PHARMACIES. 

4 Section 1860D–12(b) of the Social Security Act (42 

5 U.S.C. 1395w–112(b)) is amended by adding at the end 

6 the following new paragraphs: 

7 ‘‘(7) PHARMACY BENEFITS MANAGER TRANS8 PARENCY AND PROPER OPERATIONS REQUIRE9 MENTS.—Each contract entered into with a PDP 

10 sponsor for the offering of a prescription drug plan 

11 under this part for a plan year beginning after 2013 

12 shall provide that the PDP sponsor may not enter 

13 into a contract with any pharmacy benefits manager 

14 to manage the prescription drug coverage provided 

15 under such plan, or to control the costs of the pre16 scription drug coverage under such plan, unless the 

17 pharmacy benefits manager satisfies the following 

18 requirements: 

19 ‘‘(A) PBM AUDIT REQUIREMENTS.—The 

20 following shall apply to each audit of a phar21 macy conducted by or for the pharmacy benefits 

22 manager with respect to such prescription drug 

23 plan: 

24 ‘‘(i) The period covered by the audit 

25 may not exceed 2 years from the date the 


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1 claim involved was submitted to or ad2 justed by the pharmacy benefits manager. 

3 ‘‘(ii) In the case the audit involves 

4 clinical or professional judgment, the audit 

5 shall be conducted by, or in consultation 

6 with, a pharmacist licensed in the State of 

7 the audit or the State board of pharmacy. 

8 ‘‘(iii) The pharmacy benefits manager 

9 may not apply recordkeeping requirements 

10 on the pharmacy that are more stringent 

11 than such requirements applied under Fed12 eral law or the State law involved. 

13 ‘‘(iv) The pharmacy benefits manager, 

14 or the entity conducting the audit for the 

15 pharmacy benefits manager, shall have in 

16 place a written appeals process that shall 

17 include procedures for appeals for prelimi18 nary reports and final reports related to 

19 such audit. 

20 ‘‘(v) The pharmacy, practice site, or 

21 other entity may use the records of a hos22 pital, physician, or other authorized practi23 tioner to validate the pharmacy records 

24 and any legal prescription (one that com25 plies with State Board of Pharmacy reVerDate Mar 15 2010 23:38 Mar 20, 2012 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4215.IH H4215

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•HR 4215 IH

1 quirements) may be used to validate claims 

2 submitted by the pharmacy in connection 

3 with prescriptions, refills, or changes in 

4 prescriptions. 

5 ‘‘(vi) The pharmacy benefits manager 

6 may not, pursuant to the audit, disallow or 

7 reduce payment with respect to a claim 

8 submitted by the pharmacy because of a 

9 clerical or recordkeeping error (such as a 

10 typographical error, scrivener’s error, or 

11 computer error) if there is an absence of 

12 intent to commit fraud. 

13 ‘‘(vii) The pharmacy benefits manager 

14 or other entity conducting the audit may 

15 not use extrapolation or other statistical 

16 expansion techniques in calculating any 

17 recoupment or penalty pursuant to the 

18 audit. 

19 ‘‘(viii) The pharmacy benefits man20 ager shall disclose the amount of each pay21 ment recovered pursuant to the audit to 

22 the PDP sponsor with a copy to the phar23 macy. 

24 ‘‘(ix) Any payment recovered by the 

25 pharmacy benefit manager pursuant to the 


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1 audit shall be returned to the PDP spon2 sor. 

3 ‘‘(B) DISCLOSURE REQUIREMENTS.—In 

4 the case of a pharmacy benefits manager that 

5 uses a maximum allowable cost list with respect 

6 to determining reimbursements to pharmacies 

7 for multiple source drugs (as defined in section 

8 1927(k)), with respect to any contract between 

9 the pharmacy benefits manager and a phar10 macy, with respect to the prescription drug plan 

11 offered by the PDP sponsor, the pharmacy ben12 efits manager shall— 

13 ‘‘(i) include in such contract the 

14 methodology and resources utilized for 

15 such maximum allowable cost list; 

16 ‘‘(ii) update pricing information on 

17 such list at least weekly, starting on Janu18 ary 1 of each calendar year; and 

19 ‘‘(iii) establish a process to provide 

20 prompt notification of such pricing infor21 mation updates to the pharmacy.’’. 

Æ 


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