Bill > HB1643

This bill establishes a framework for how audits of registered pharmacists and pharmacies are conducted, aiming to ensure fairness and clarity in the process. It mandates that audit requests must be in writing and require a signature acknowledging receipt. When an audit is performed by various entities, including the state, counties, insurers, health maintenance organizations, and pharmacy benefit managers (companies that manage prescription drug benefits for health plans), specific procedures must be followed. These include providing at least two weeks' written notice before an on-site audit, with details like prescription numbers and fill dates. Audits involving professional judgment must include consultation with a registered pharmacist, and minor clerical or recordkeeping errors, such as typos or computer glitches, will not automatically be considered fraud or lead to recoupment unless they result in an actual overpayment or the wrong medication being dispensed, and criminal penalties will only apply with proof of intent to commit fraud. Pharmacists can use records from healthcare providers to validate their own records, and any recoupment of overpayments or underpayments will be based on actual amounts, not projections, unless agreed upon in a settlement. Audits must adhere to the same standards for all similarly situated pharmacies, and pharmacists will have a specified time, usually at least sixty days if not otherwise defined in a contract, to provide documentation after receiving a preliminary audit report, with the ability to correct clerical errors by submitting amended claims. Audits are limited to a two-year lookback period, unless federal regulations require longer, and cannot be initiated during the first seven days of any month without consent. Preliminary audit reports must be delivered within 120 days of the audit's conclusion, with final reports issued within six months of the preliminary report or final appeal. Crucially, audits cannot use the accounting practice of extrapolation to calculate recoupments or penalties, and recoupments for clerical errors generally exclude the cost of the drug unless there's fraud, dispensing beyond contract limits, or dispensing the wrong medication. Recoupments will only apply to prescriptions directly identified in the audit and will not be extrapolated. Disputed funds can only be recouped after the internal appeals process is finalized, and pharmacy benefit managers must provide a clear explanation of this appeals process. Pharmacists can reverse and rebill prescriptions for clerical changes within the correction timeframe, and auditors are prohibited from entering the prescription department or disrupting pharmacy services, with audits potentially conducted in an area outside the prescription department that complies with privacy laws. Dispensing fees will not be included in recoupments unless the prescription was not dispensed, was invalid, fraudulent, or outside the contract, with exceptions for good-faith error corrections. Audit information from one pharmacy benefit manager cannot be shared with another, except in cases of suspected fraud. Unless otherwise contracted, audit findings or recoupments will not be made for missing information on a prescription if that information is not required by federal or state law. The bill also clarifies how to calculate days' supply for recoupment purposes and allows pharmacies to dispense and be reimbursed for the full quantity of commercially packaged products even if it exceeds the maximum days' supply, with specific rules for calculating days' supply based on dosage. These provisions, however, do not apply to investigative audits involving fraud or willful misrepresentation, nor do they apply to the department of health. The bill is set to take effect on July 1, 3000.

Business and Industry, Health and Social Services

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=HB&billnumber=1643&year=2026