NY Pub Health L § 280-C (2021)
2021 New York Laws PBH - Public Health Article 2-A - Prescription Drugs Title 2 - Prescription Drugs; Various Provisions 280-C - Pharmacy Audits by Pharmacy Benefit Managers.

§ 280-c. Pharmacy audits by pharmacy benefit managers. 1. Definitions. As  used  in  this section, the following terms shall have the following meanings:  (a) "Pharmacy benefit manager" shall  have  the  same  meaning  as  in section two hundred eighty-a of this article.  (b)  "Pharmacy"  shall  mean  a  pharmacy  that  has contracted with a pharmacy benefit manager for the provision of pharmacy services.   2. When conducting an  audit  of  a  pharmacy's  records,  a  pharmacy benefit manager shall:  (a)  not conduct an on-site audit of a pharmacy at any time during the first three calendar days of a month;  (b) notify the pharmacy or its contracting agent no later than fifteen days before the date of initial on-site audit. Such notification to  the pharmacy  or  its contracting agent shall be in writing delivered either (i) by mail  or  common  carrier,  return  receipt  requested,  or  (ii) electronically  with  electronic  receipt confirmation, addressed to the supervising pharmacist of record and  pharmacy  corporate  office  where applicable,  at least fifteen days before the date of an initial on-site audit;  (c) limit the audit period to twenty-four  months  after  the  date  a claim is submitted to or adjudicated by the pharmacy benefit manager;  (d) include in the written advance notice of an on-site audit the list of specific prescription numbers to be included in the audit that may or may not include the final two digits of the prescription numbers;  (e) use the written and verifiable records of a hospital, physician or other  authorized  practitioner,  which  are transmitted by any means of communication, to validate the pharmacy records in accordance with state and federal law;  (f) limit the number of prescriptions audited  to  no  more  than  one hundred  randomly  selected in a twelve-month period, except in cases of fraud;  (g) provide the pharmacy or its contracting agent with a copy  of  the preliminary  audit report within forty-five days after the conclusion of the audit;  (h) be allowed to conduct a follow-up audit on-site  if  a  remote  or desk audit reveals the necessity for a review of additional claims;  (i)  in the case of invoice audits, accept as validation invoices from any wholesaler registered with the department of  education  from  which the pharmacy has purchased prescription drugs or, in the case of durable medical  equipment  or  sickroom  supplies,  invoices from an authorized distributor other than a wholesaler;  (j) provide the pharmacy or its contracting agent with the ability  to provide  documentation  to  address  a  discrepancy  or  audit  finding, provided that such  documentation  must  be  received  by  the  pharmacy benefit  manager no later than the forty-fifth day after the preliminary audit report was provided to the pharmacy or its contracting agent.  The pharmacy  benefit  manager  shall consider a reasonable request from the pharmacy for an extension of time to submit documentation to address  or correct any findings in the report; and  (k) provide the pharmacy or its contracting agent with the final audit report  no  later  than  sixty  days  after the initial audit report was provided to the pharmacy or its contracting agent.   3. Any claim that was  retroactively  denied  for  a  clerical  error, typographical  error,  scrivener's error or computer error shall be paid if the prescription was  properly  and  correctly  dispensed,  unless  a pattern  of  such  errors  exists,  fraudulent billing is alleged or the error results in actual financial loss to the entity. A  clerical  error is an error that does not result in actual financial harm to the covered  entity  or  consumer and does not include the dispensing of an incorrect dose, amount or type of medication or dispensing a prescription drug  to the wrong person.   4. This section shall not apply to:  (a) audits in which suspected fraudulent activity or other intentional or  willful  misrepresentation is evidenced by a physical review, review of claims data or statements, or other investigative methods; or  (b) audits of claims paid for by federally funded programs; or  (c) concurrent reviews or desk audits that occur within three business days of transmission of a claim and where no chargeback or recoupment is demanded.