Illinois General Assembly - Full Text of SB0757
Illinois General Assembly

  Bills & Resolutions  
  Compiled Statutes  
  Public Acts  
  Legislative Reports  
  IL Constitution  
  Legislative Guide  
  Legislative Glossary  

 Search By Number
 (example: HB0001)
Search Tips

Search By Keyword

Full Text of SB0757  103rd General Assembly


Sen. David Koehler

Filed: 3/24/2023





10300SB0757sam002LRB103 03211 BMS 60014 a


2    AMENDMENT NO. ______. Amend Senate Bill 757 by replacing
3everything after the enacting clause with the following:
4    "Section 5. The Illinois Insurance Code is amended by
5adding Section 513b7 as follows:
6    (215 ILCS 5/513b7 new)
7    Sec. 513b7. Pharmacy audits.
8    (a) As used in this Section:
9    "Audit" means any physical on-site, remote electronic, or
10concurrent review of a pharmacist service submitted to the
11pharmacy benefit manager or pharmacy benefit manager affiliate
12by a pharmacist or pharmacy for payment.
13    "Auditing entity" means a person or company that performs
14a pharmacy audit.
15    "Extrapolation" means the practice of inferring a
16frequency of dollar amount of overpayments, underpayments,



10300SB0757sam002- 2 -LRB103 03211 BMS 60014 a

1nonvalid claims, or other errors on any portion of claims
2submitted, based on the frequency of dollar amount of
3overpayments, underpayments, nonvalid claims, or other errors
4actually measured in a sample of claims.
5    "Misfill" means a prescription that was not dispensed; a
6prescription that was dispensed but was an incorrect dose,
7amount, or type of medication; a prescription that was
8dispensed to the wrong person; a prescription in which the
9prescriber denied the authorization request; or a prescription
10in which an additional dispensing fee was charged.
11    "Pharmacy audit" means an audit conducted of any records
12of a pharmacy for prescriptions dispensed or nonproprietary
13drugs or pharmacist services provided by a pharmacy or
14pharmacist to a covered person.
15    "Pharmacy record" means any record stored electronically
16or as a hard copy by a pharmacy that relates to the provision
17of a prescription or pharmacy services or other component of
18pharmacist care that is included in the practice of pharmacy.
19    (b) Notwithstanding any other law, when conducting a
20pharmacy audit, an auditing entity shall:
21        (1) not conduct an on-site audit of a pharmacy at any
22    time during the first 3 business days of a month or the
23    first 2 weeks and final 2 weeks of the calendar year or
24    during a declared State or federal public health
25    emergency;
26        (2) notify the pharmacy or its contracting agent no



10300SB0757sam002- 3 -LRB103 03211 BMS 60014 a

1    later than 14 business days before the date of initial
2    on-site audit; the notification to the pharmacy or its
3    contracting agent shall be in writing and delivered
4    either:
5            (A) by mail or common carrier, return receipt
6        requested; or
7            (B) electronically, not including facsimilie, with
8        electronic receipt confirmation and delivered during
9        normal business hours of operation, addressed to the
10        supervising pharmacist and pharmacy corporate office,
11        if applicable, at least 14 business days before the
12        date of an initial on-site audit;
13        (3) limit the audit period to 24 months after the date
14    a claim is submitted to or adjudicated by the pharmacy
15    benefit manager;
16        (4) provide in writing the list of specific
17    prescription numbers to be included in the audit 14
18    business days before the on-site audit that may or may not
19    include the final 2 digits of the prescription numbers;
20        (5) use the written and verifiable records of a
21    hospital, physician, or other authorized practitioner that
22    are transmitted by any means of communication to validate
23    the pharmacy records in accordance with State and federal
24    law;
25        (6) limit the number of prescriptions audited to no
26    more than 100 prescriptions per audit and an entity shall



10300SB0757sam002- 4 -LRB103 03211 BMS 60014 a

1    not audit more than 200 prescriptions in any 12-month
2    period, except in cases of fraud, waste, or abuse; a
3    refill shall not constitute a separate prescription and a
4    pharmacy shall not be audited more than once every 6
5    months;
6        (7) provide the pharmacy or its contracting agent with
7    a copy of the preliminary audit report within 45 days
8    after the conclusion of the audit;
9        (8) be allowed to conduct a follow-up audit on site if
10    a remote or desk audit reveals the necessity for a review
11    of additional claims;
12        (9) accept invoice audits as validation invoices from
13    any wholesaler registered with the Department of Financial
14    and Professional Regulation from which the pharmacy has
15    purchased prescription drugs or, in the case of durable
16    medical equipment or sickroom supplies, invoices from an
17    authorized distributor other than a wholesaler;
18        (10) provide the pharmacy or its contracting agent
19    with the ability to provide documentation to address a
20    discrepancy or audit finding if the documentation is
21    received by the pharmacy benefit manager no later than the
22    45th day after the preliminary audit report was provided
23    to the pharmacy or its contracting agent; the pharmacy
24    benefit manager shall consider a reasonable request from
25    the pharmacy for an extension of time to submit
26    documentation to address or correct any findings in the



10300SB0757sam002- 5 -LRB103 03211 BMS 60014 a

1    report;
2        (11) be required to provide the pharmacy or its
3    contracting agent with the final audit report no later
4    than 90 days after the initial audit report was provided
5    to the pharmacy or its contracting agent;
6        (12) conduct the audit in consultation with a
7    pharmacist in specific cases if the audit involves
8    clinical or professional judgment;
9        (13) not chargeback, recoup, or collect penalties from
10    a pharmacy until the time period to file an appeal of the
11    final pharmacy audit report has passed or the appeals
12    process has been exhausted, whichever is later, unless the
13    identified discrepancy is expected to exceed $25,000, in
14    which case the auditing entity may withhold future
15    payments in excess of that amount until the final
16    resolution of the audit;
17        (14) not compensate the employee or contractor
18    conducting the audit based on a percentage of the amount
19    claimed or recouped pursuant to the audit;
20        (15) not use extrapolation to calculate penalties or
21    amounts to be charged back or recouped unless otherwise
22    required by federal law or regulation; any amount to be
23    charged back or recouped due to overpayment may not exceed
24    the amount the pharmacy was overpaid;
25        (16) not include dispensing fees in the calculation of
26    overpayments unless a prescription is considered a



10300SB0757sam002- 6 -LRB103 03211 BMS 60014 a

1    misfill, the medication is not delivered to the patient,
2    the prescription is not valid, or the prescriber denies
3    authorizing the prescription; and
4        (17) conduct a pharmacy audit under the same standards
5    and parameters as conducted for other similarly situated
6    pharmacies audited by the auditing entity.
7    (c) Except as otherwise provided by State or federal law,
8an auditing entity conducting a pharmacy audit may have access
9to a pharmacy's previous audit report only if the report was
10prepared by that auditing entity.
11    (d) Information collected during a pharmacy audit shall be
12confidential by law, except that the auditing entity
13conducting the pharmacy audit may share the information with
14the health benefit plan for which a pharmacy audit is being
15conducted and with any regulatory agencies and law enforcement
16agencies as required by law.
17    (e) A pharmacy may not be subject to a chargeback or
18recoupment for a clerical or recordkeeping error in a required
19document or record, including a typographical error or
20computer error, unless the pharmacy benefit manager can
21provide proof of intent to commit fraud or such error results
22in actual financial harm to the pharmacy benefit manager, a
23health plan managed by the pharmacy benefit manager, or a
25    (f) A pharmacy shall have the right to file a written
26appeal of a preliminary and final pharmacy audit report in



10300SB0757sam002- 7 -LRB103 03211 BMS 60014 a

1accordance with the procedures established by the entity
2conducting the pharmacy audit.
3    (g) No interest shall accrue for any party during the
4audit period, beginning with the notice of the pharmacy audit
5and ending with the conclusion of the appeals process.
6    (h) An auditing entity must provide a copy to the plan
7sponsor of its claims that were included in the audit, and any
8recouped money shall be returned to the plan sponsor, unless
9otherwise contractually agreed upon by the plan sponsor and
10the pharmacy benefit manager.
11    (i) The parameters of an audit must comply with
12manufacturer listings or recommendations, unless otherwise
13prescribed by the treating provider, and must be covered under
14the individual's health plan, for the following:
15        (1) the day supply for eyedrops must be calculated so
16    that the consumer pays only one 30-day copayment if the
17    bottle of eyedrops is intended by the manufacturer to be a
18    30-day supply;
19        (2) the day supply for insulin must be calculated so
20    that the highest dose prescribed is used to determine the
21    day supply and consumer copayment; and
22        (3) the day supply for topical product must be
23    determined by the judgment of the pharmacist or treating
24    provider upon the treated area.
25    (j) This Section shall not apply to:
26        (1) audits in which suspected fraud, waste, or abuse



10300SB0757sam002- 8 -LRB103 03211 BMS 60014 a

1    or other intentional or willful misrepresentation is
2    evidenced by a physical review, review of claims data or
3    statements, or other investigative methods;
4        (2) audits of claims paid for by federally funded
5    programs; or
6        (3) concurrent reviews or desk audits that occur
7    within 3 business days after transmission of a claim and
8    in which no chargeback or recoupment is demanded.".