Rep. Franco Coladipietro

Filed: 4/13/2011

 

 


 

 


 
09700HB2017ham002LRB097 10463 RPM 54521 a

1
AMENDMENT TO HOUSE BILL 2017

2    AMENDMENT NO. ______. Amend House Bill 2017 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Insurance Code is amended by
5changing Sections 512-3 and 512-7 as follows:
 
6    (215 ILCS 5/512-3)  (from Ch. 73, par. 1065.59-3)
7    Sec. 512-3. Definitions. For the purposes of this Article,
8unless the context otherwise requires, the terms defined in
9this Article have the meanings ascribed to them herein:
10    (a) "Third party prescription program" or "program" means
11any system of providing for the reimbursement of pharmaceutical
12services and prescription drug products offered or operated in
13this State under a contractual arrangement or agreement between
14a provider of such services and another party who is not the
15consumer of those services and products. Such programs may
16include, but need not be limited to, employee benefit plans

 

 

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1whereby a consumer receives prescription drugs or other
2pharmaceutical services and those services are paid for by an
3agent of the employer or others.
4    (b) "Third party program administrator" or "administrator"
5or "entity" means any pharmacy benefits manager or person,
6business, or other entity that performs pharmacy benefits
7management. The terms include a person or auditing entity
8acting for a pharmacy benefits manager in a contractual or
9employment relationship in the performance of pharmacy
10benefits management for a managed care company or nonprofit
11hospital or the services of a pharmacy benefits administrator,
12medical service organization, insurance company, third-party
13payor, person, partnership or corporation who issues or causes
14to be issued any payment or reimbursement to a provider for
15services rendered pursuant to a third party prescription
16program, but does not include the Director of Healthcare and
17Family Services or any agent authorized by the Director to
18reimburse a provider of services rendered pursuant to a program
19of which the Department of Healthcare and Family Services is
20the third party.
21    (c) "Fraud" means an intentional act of deception or
22misrepresentation to obtain an authorized benefit.
23(Source: P.A. 95-331, eff. 8-21-07.)
 
24    (215 ILCS 5/512-7)  (from Ch. 73, par. 1065.59-7)
25    Sec. 512-7. Contractual provisions.

 

 

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1    (a) Any agreement or contract entered into in this State
2between the administrator of a program and a pharmacy shall
3include a statement of the method and amount of reimbursement
4to the pharmacy for services rendered to persons enrolled in
5the program, the frequency of payment by the program
6administrator to the pharmacy for those services, and a method
7for the adjudication of complaints and the settlement of
8disputes between the contracting parties.
9    (b)(1) A program shall provide an annual period of at least
10    30 days during which any pharmacy licensed under the
11    Pharmacy Practice Act may elect to participate in the
12    program under the program terms for at least one year.
13        (2) If compliance with the requirements of this
14    subsection (b) would impair any provision of a contract
15    between a program and any other person, and if the contract
16    provision was in existence before January 1, 1990, then
17    immediately after the expiration of those contract
18    provisions the program shall comply with the requirements
19    of this subsection (b).
20        (3) This subsection (b) does not apply if:
21            (A) the program administrator is a licensed health
22        maintenance organization that owns or controls a
23        pharmacy and that enters into an agreement or contract
24        with that pharmacy in accordance with subsection (a);
25        or
26            (B) the program administrator is a licensed health

 

 

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1        maintenance organization that is owned or controlled
2        by another entity that also owns or controls a
3        pharmacy, and the administrator enters into an
4        agreement or contract with that pharmacy in accordance
5        with subsection (a).
6            (4) This subsection (b) shall be inoperative after
7        October 31, 1992.
8    (c) The program administrator shall cause to be issued an
9identification card to each person enrolled in the program. The
10identification card shall include:
11        (1) the name of the individual enrolled in the program;
12    and
13        (2) an expiration date if required under the
14    contractual arrangement or agreement between a provider of
15    pharmaceutical services and prescription drug products and
16    the third party prescription program administrator.
17    (d) Notwithstanding any other law, either State or federal,
18when an on-site audit of the records of a pharmacy is conducted
19by any entity, the audit shall be conducted in accordance with
20the following criteria:
21        (1) the entity conducting the on-site audit must give
22    the pharmacy written notice prior to conducting the initial
23    on-site audit and must specify the records and documents to
24    be examined;
25        (2) any audit that involves clinical or professional
26    judgment must be conducted by or in consultation with a

 

 

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1    pharmacist that that is duly licensed;
2        (3) any clerical or record-keeping error, such as a
3    typographical error, scrivener's error, or computer error,
4    regarding a required document or record does not constitute
5    fraud; however, such claims may be subject to recoupment;
6        (4) a finding of an overpayment or underpayment must be
7    based on the actual overpayment or underpayment and may not
8    be a projection based on the number of patients served
9    having a similar diagnosis or on the number of similar
10    orders or refills for similar drugs unless mutually agreed
11    to in writing by both parties;
12        (5) each pharmacy shall be audited under the same
13    standards and parameters as other similarly situated
14    pharmacies audited by the entity; and
15        (6) the period covered by an audit may not exceed 2
16    years from the date the claim was submitted to or
17    adjudicated by an entity.
18    (e) The auditing entity, administrator, or its
19representative described in subsection (d) of this Section must
20provide the pharmacy with a written report of the audit and
21comply with the following requirements:
22        (1) the preliminary audit report must be delivered to
23    the pharmacy within 90 days after conclusion of the audit
24    along with a written copy of the appeals process to the
25    pharmacy that is being audited;
26        (2) a pharmacy shall be allowed at least 30 business

 

 

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1    days following receipt of the preliminary audit report in
2    which to produce documentation to address any discrepancy
3    found during the audit;
4        (3) a final audit report shall be delivered to the
5    pharmacy within 180 days after receipt of the preliminary
6    audit report or final appeal, as provided for in Section 6
7    of this Code, whichever is later;
8        (4) an acknowledgement of the audit, as conducted, must
9    be signed and shall include the signature of any pharmacist
10    participating in the audit;
11        (5) recoupments of any disputed funds, or repayment of
12    funds to the entity by the pharmacy if permitted pursuant
13    to contractual agreement, shall occur, to the extent
14    demonstrated and/or documented pursuant to the pharmacy
15    audit findings, after final internal disposition of the
16    audit; should the identified discrepancy for an individual
17    audit exceed $25,000, then future payments to the pharmacy
18    may be withheld pending finalization of the audit;
19        (6) interest shall not accrue during the audit period;
20    and
21        (7) each entity conducting an audit shall provide a
22    copy of the final audit report, after completion of any
23    review process, to the audited pharmacy.
24    (f) Notwithstanding any other provision in this Code, the
25administrator conducting the audit pursuant to subsections (d)
26and (e) of this Section shall not use the accounting practice

 

 

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1of extrapolation in calculating recoupments or penalties for
2audits.
3    As used in this Section, "accounting practice of
4extrapolation" means an audit of a sample of prescription drug
5benefit claims submitted by a pharmacy to the administrator
6conducting the audit that is then used to estimate audit
7results for a larger batch or group of claims not reviewed by
8the auditor.
9    (g) The audit criteria set forth in this Section shall
10apply only to audits of claims for services provided and claims
11submitted for payment after the effective date of this
12amendatory Act of the 97th General Assembly.
13    (h) This Section shall not apply to any investigative audit
14that involves potential fraud, willful misrepresentation, or
15abuse, including, without limitation, investigative audits or
16any other statutory provision that authorizes investigations
17relating to insurance fraud.
18(Source: P.A. 95-689, eff. 10-29-07.)".