2023 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.