Bill > S1008

Introduced Session

This bill establishes the "New Jersey Pharmacy Audit Bill of Rights" including certain procedures and processes by which entities auditing a pharmacy are to follow. The bill defines "entity" as a hospital service corporation, medical service corporation, or other managed care company, or an insurance company, third-party payor, pharmacy benefits manager, any entity licensed by the Department of Banking and Insurance, or any entity that represents such companies, groups, or departments. Under the bill, the audits are to be conducted in accordance with certain requirements concerning the scope of an audit, procedures to properly perform an audit, record-keeping, and recoupment. Additionally, the entity conducting an audit shall not use the accounting practice of extrapolation in calculating recoupments or penalties for audits. Under the bill, recoupments of any disputed funds are to only occur after final internal disposition of the audit, including the appeals process as set forth in the bill. 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 is to dismiss the audit report or portion thereof without the necessity of any further proceedings. Each entity conducting an audit is to 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. The provisions of the bill do not apply to any investigative audit commenced based upon an articulable suspicion of fraud, willful misrepresentation, or abuse, including without limitation investigative audits under the "New Jersey Medical Assistance and Health Services Act;" the "New Jersey Insurance Fraud Prevention Act;" the New Jersey criminal statute establishing insurance fraud as a crime; or any other statutory provision which authorizes investigations relating to insurance fraud. Additionally the Department of Human Services is exempt from the bill's provisions when conducting audits under the "New Jersey Medical Assistance and Health Services Act," so long as the regulations establishing an appeals process for Medicaid providers apply to the parties under audit by the Department of Human Services pursuant to the "New Jersey Medical Assistance and Health Services Act." Under the bill, an entity conducting the audit may not pay the agent or employee who is conducting the audit based on percentage of the amount recovered. Lastly, the Commissioner of Banking and Insurance is assigned the enforcement of the bill's provisions and is to promulgate rules and regulations to effectuate its provisions. The Commissioner has the authority to investigate complaints of alleged violations of this 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 current law relating to the regulation and licensure of pharmacy benefit managers.

Committee Categories

Vin Gopal (D)*,  Linda Greenstein (D)*, 

Introduced in the Senate, Referred to Senate Commerce Committee (on 01/09/2024)

Official Document