Utah Legislature Passes NCPA-Backed Pharmacy Audit Reforms

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Alexandria, Va. - March 12, 2012

Legislation applying common sense reforms to the pharmacy audit process has been overwhelmingly approved by the Utah state legislature, a development welcomed by the National Community Pharmacists Association (NCPA) today. On a 73-1 vote Thursday evening, lawmakers agreed to send the Pharmacy Audit Integrity and Recovery (PhAIR) Act (H.B. 76) to Utah Governor Gary Herbert.

"This legislation is an important step forward for patients and pharmacists across Utah," said NCPA CEO B. Douglas Hoey, RPh, MBA. "Fair auditing of pharmacies is a legitimate way to protect public and private health plans from waste, fraud and abuse. However, recently pharmacy auditing practices are sapping pharmacists' time to counsel patients and appear to be more about generating revenue for the middleman than rooting out fraud. There's no reason for community pharmacists to routinely lose time and thousands of dollars in audits when the right medication is dispensed to the right patient at the right time.

"We commend State Representative, pharmacist and NCPA member Evan Vickers, the Independent Pharmacy Cooperative and the Utah Pharmacists Association for making it happen," Hoey added. "NCPA was proud to support their grassroots efforts."

Key provisions in H.B. 76 include the following requirements:

  • Clerical or recordkeeping error such as a typo should not be considered fraud or subject to recoupment or criminal penalties.
  • Findings of overpayment or underpayment must be based on actual overpayment or underpayment and not a projection.
  • Audits cannot recoup dispensing fees from the pharmacy.
  • An auditing entity may not be paid based on a percentage of the amount recovered.
  • All pharmacies are to be audited under the same standards or parameters as other pharmacies.
  • The period covered by the audit may not exceed 18 months, unless superseded by federal law.
  • Audits have a 200 script maximum limit.

A 2011 survey of 1,850 community pharmacists conducted by NCPA illustrates the need for the reforms embodied by H.B. 76. Among that survey's findings:

  • Sixty-two percent of pharmacists considered the audit requirements to be completely inconsistent from one health plan to another; 48 percent of pharmacists reported auditors asking them to justify claims that are two years old or older; and, of the pharmacists who report having appealed a PBM audit, 81 percent describe that process as burdensome and unsatisfactory; and
  • When asked how PBM reimbursement and auditing practices affect pharmacists' ability to provide patient care and remain in business, 97 percent said it was a significant or very significant factor.

NCPA has endorsed federal pharmacy audit reform legislation, The Pharmacy Competition and Consumer Choice Act (H.R. 1971/S. 1058).

The National Community Pharmacists Association (NCPA®) represents the interests of America's community pharmacists, including the owners of more than 23,000 independent community pharmacies. Together they represent a $93 billion health care marketplace, dispense nearly 40% of all retail prescriptions, and employ more than 315,000 people, including 62,400 pharmacists. Independent community pharmacists are readily accessible medication experts who can help lower health care spending. They are committed to maximizing the appropriate use of lower-cost generic drugs and reducing the estimated $290 billion that is wasted annually by improper medication use. To learn more go to www.ncpanet.org or read NCPA's blog, The Dose, at http://ncpanet.wordpress.com.

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