GA Code § 26-4-118 (2021)
2021 Georgia Code|Title 26 - Food, Drugs, and Cosmetics|Chapter 4 - Pharmacists and Pharmacies|Article 6 - Pharmacies|§ 26-4-118. Pharmacy Audit Bill of Rights; Recoupment of Disputed Funds; Appeals Process for Unfavorable Reports; Final Audit Report; Investigative Audits Based on Criminal Offenses

  This Code section shall be known and may be cited as "The Pharmacy Audit Bill of Rights."   Notwithstanding any other law, when an audit of the records of a pharmacy is conducted by a managed care company, insurance company, third-party payor, pharmacy benefits manager, any entity licensed by the Department of Insurance, or any entity that represents such companies, groups, or department, it shall be conducted in accordance with the following bill of rights:   The entity conducting the audit must give the pharmacy notice at least 14 days prior to conducting the audit for each audit cycle and include in such notice a comprehensive list of claims by prescription number to be audited, although the final two digits may be omitted, and the cost of such claims shall not be used as a criterion in determining which claims to audit. The audit shall not include more than 100 prescriptions per audit and an entity shall not audit more than 200 prescriptions in any 12 month period, provided that a refill shall not constitute a separate prescription;   Any audit which involves clinical or professional judgment must be conducted by or in consultation with a pharmacist;   Any clerical or record-keeping error, including but not limited to a typographical error, scrivener's error, computer error, or omission error, regarding a prescription, front or back label, or other document or record shall not in and of itself constitute fraud. No such claim shall be subject to criminal penalties without proof of intent to commit fraud. No recoupment of the cost of drugs or medicinal supplies properly dispensed shall be allowed if such error has occurred; provided, however, that recoupment shall be allowed to the extent that such error resulted in an overpayment, though recoupment shall be limited to the amount overpaid;   A pharmacy shall be allowed at least 60 days following the receipt of the preliminary audit report in which to correct any error or to address any discrepancy found during an audit which may be subject to recoupment for overpayment as provided for in paragraph (12) of this subsection, including to secure and remit an appropriate copy of the record from a hospital, physician, or other authorized practitioner of the healing arts for drugs or medicinal supplies written or transmitted by any means of communication if the lack of such a record or an error in such a record is identified in the course of an audit or noticed within the preliminary audit report;   A pharmacy may use the records of a hospital, physician, or other authorized practitioner of the healing arts for drugs or medicinal supplies written or transmitted by any means of communication for purposes of validating the pharmacy record with respect to orders or refills of a legend or narcotic drug;   A finding of an overpayment or underpayment may be a projection based on the number of patients served having a similar diagnosis or on the number of similar orders or refills for similar drugs; however, recoupment of claims must be based on the actual overpayment or underpayment unless the projection for overpayment or underpayment is part of a settlement as agreed to by the pharmacy;   Each pharmacy shall be audited under the same standards and parameters as other similarly situated pharmacies audited by the entity;   The period covered by an audit may not exceed two years from the date the claim was submitted to or adjudicated by a managed care company, insurance company, third-party payor, pharmacy benefits manager, any entity licensed by the Department of Insurance, or any entity that represents such companies, groups, or department;   An audit may not be initiated or scheduled during the first seven calendar days of any month due to the high volume of prescriptions filled during that time unless otherwise consented to by the pharmacy;   The preliminary audit report must be delivered to the pharmacy within 30 days after conclusion of the audit. A final audit report shall be delivered to the pharmacy within 60 days after receipt of the preliminary audit report or final appeal, as provided for in subsection (c) of this Code section, whichever is later;   A pharmacy shall not be held responsible for any penalty or fee in connection with an audit and there shall be no recoupment of funds from a pharmacy in connection with claims for which the pharmacy has already been paid without first complying with the requirements set forth in this Code section;   There shall be no recoupment from a pharmacy except in cases of:   Fraud;   An error that resulted in an overpayment provided that recoupment shall be limited to the amount overpaid; or   A misfill; provided, however, that when a patient receives the correct drug in the correct dosage and quantity pursuant to a prescription drug order then no misfill shall be found to have occurred; and     A pharmacy shall not be audited more than once every six months.  Notwithstanding any other provision in this subsection, the agency conducting the audit shall not use the accounting practice of extrapolation in calculating recoupments or penalties for audits.      Recoupments of any disputed funds shall only occur after final internal disposition of the audit, including the appeals process as set forth in subsection (d) of this Code section.   Each entity conducting an audit shall establish an internal appeals process under which a pharmacy shall have at least 30 days from the delivery of the preliminary audit report to appeal an unfavorable preliminary audit report to the entity. If, following the appeal, the entity finds that an unfavorable audit report or any portion thereof is unsubstantiated, the entity shall dismiss the audit report or such portion without the necessity of any further proceedings.   Each entity conducting an audit shall provide a copy of the final audit report, after completion of any review process, to the plan sponsor at its request or in an alternate format.   This Code section shall not apply to any investigative audit commenced based upon an articulable suspicion of fraud, willful misrepresentation, or abuse, including without limitation investigative audits under Article 7 of Chapter 4 of Title 49, Code Section 33-1-16, or any other statutory provision which authorizes investigations relating to insurance fraud.   The provisions of this Code section shall not apply to the Department of Community Health conducting audits under Article 7 of Chapter 4 of Title 49; provided, however, that the provisions of Code Section 49-4-151.1 shall apply to such audits conducted by the Department of Community Health under Article 7 of Chapter 4 of Title 49.   The entity conducting the audit may not pay the agent or employee who is conducting the audit based on a percentage of the amount recovered.   The Commissioner of Insurance shall have enforcement authority over this Code section and shall promulgate rules and regulations to effectuate the provisions of this Code section. The Commissioner of Insurance shall have the authority to investigate complaints of alleged violations of this Code section; to prohibit recoupment; to order reimbursement of any wrongful recoupment; to institute fines for violations of the law, rules, or regulations; and to take any other actions pursuant to any authority granted pursuant to Chapter 64 of Title 33, relating to the regulation and licensure of pharmacy benefits managers.     (Code 1981, §26-4-118, enacted by Ga. L. 2006, p. 198, § 1/HB 1371; Ga. L. 2009, p. 8, § 26/SB 46; Ga. L. 2013, p. 615, § 1/HB 179; Ga. L. 2015, p. 337, § 1/HB 470; Ga. L. 2016, p. 864, § 26/HB 737; Ga. L. 2017, p. 219, § 1/HB 206; Ga. L. 2020, p. 654, § 2/HB 918.)    The 2013 amendment,  effective July 1, 2013, substituted the present provisions of paragraph (b)(3) for the former provisions, which read: "Any clerical or record-keeping error, such as a typographical error, scrivener's error, or computer error, regarding a required document or record may not in and of itself constitute fraud; however, such claims may be subject to recoupment. No such claim shall be subject to criminal penalties without proof of intent to commit fraud"; added paragraph (b)(4); redesignated former paragraphs (b)(4) through (b)(6) as present paragraphs (b)(5) through (b)(7), respectively; deleted former paragraph (b)(7), which read: "A pharmacy shall be allowed at least 30 days following receipt of the preliminary audit report in which to produce documentation to address any discrepancy found during an audit;"; in subsection (d), substituted "shall have at least 30 days from the delivery of the preliminary audit report to appeal" for "may appeal" in the first sentence, and substituted "such portion" for "said portion" in the second sentence; and added subsection (g).    The 2015 amendment,  effective July 1, 2015, in subsection (b), in the introductory language, inserted "pharmacy benefits manager, any entity licensed by the Department of Insurance," near the middle and inserted "or a private person bringing a claim pursuant to Article 7B of Chapter 4 of Title 49," near the end; in paragraph (b)(1), substituted "14 days" for "one week" near the middle and inserted "and include in such notice a comprehensive list of claims by prescription number to be audited, although the final two digits may be omitted" near the end; in paragraph (b)(3), substituted "shall not" for "may not" in the first sentence, and substituted "though recoupment shall be limited to the amount overpaid" for "underpayment, or improper dispensing of drugs or medicinal supplies." at the end; in paragraph (b)(8), inserted "pharmacy benefits manager, any entity licensed by the Department of Insurance," near the middle and deleted "or" following "Title 49," near the end; inserted "internal" in the first sentence in subsection (d); inserted "at its request or in an alternate format" in subsection (e); inserted a comma following "abuse" in subsection (f); and added subsections (h) and (i).    The 2016 amendment,  effective May 3, 2016, part of an Act to revise, modernize, and correct the Code, substituted "Title 49, or any" for "Title 49, any" near the end of paragraph (b)(8).    The 2017 amendment,  effective July 1, 2017, added the proviso at the end of subsection (g).    The 2020 amendment,  effective January 1, 2021, rewrote subsection (b); substituted "commenced based upon an articulable suspicion of" for "which involves" near the beginning of subsection (f); deleted "paragraph (3) of subsection (b) of" preceding "this Code section" at the beginning of subsection (g); and substituted the present provisions of subsection (i) for the former provisions, which read: "The Commissioner of Insurance shall have enforcement authority over this Code section and shall have the authority granted pursuant to Chapter 64 of Title 33, relating to the regulation and licensure of pharmacy benefits managers."