HB360 Alabama 2011 Session

Summary

Primary Sponsor

Ron Johnson

Republican

Session

Regular Session 2011

Title

Pharmacies, records, audit, minimum and uniform standards established, procedures, appeals, Pharmacy Audit Integrity Act

Summary

The Pharmacy Audit Integrity Act would set minimum, uniform standards for auditing pharmacy records and ban extrapolation in penalties.

What This Bill Does

If enacted, the bill would require audits of pharmacy records by health benefit plans, PBMs, and related entities to follow specific procedures; audits must include advance notice, a detailed checklist, and limits to how records are requested. It creates a formal appeals process, requires involvement of a pharmacist for clinical judgments, and ensures costs of audits are borne by the auditing entity. It also prohibits using extrapolation to calculate recoupments or penalties and sets timelines for reporting and resolving audit findings.

Who It Affects

• Pharmacies and their staff, who would be audited under uniform standards, receive notice and have an appeals process, with most audit costs borne by the auditing entity.
• Health benefit plans, managed care organizations, third-party payors, pharmacy benefit managers, and related auditing entities, which must follow the act's procedures, report findings, and cover audit costs.

Key Provisions

• Establishes minimum and uniform standards for auditing pharmacy records by or on behalf of certain entities.
• Defines key terms such as health benefit plan, pharmacy, pharmacy benefit manager, and pharmacist services.
• Requires audit procedures: contract must describe audit procedures; written notice at least two weeks before audits; on-site/desk audit checklists; receipt for records; and non-interference with patient care.
• mandates pharmacist involvement for clinical or professional judgments; clerical errors are not automatically fraud but may be recouped; fraud requires proof of intent.
• Limits documentation demands to what state/federal law requires; restricts sharing of audit information; auditors may access only prior audits by the same entity.
• Prohibits extrapolation in calculating recoupments or penalties; defines extrapolation and bans its use.
• Sets audit period limits (no more than two years from claim submission/adjudication; not longer than the claim resubmission window) and scheduling rules (no audits in the first five days of a month without consent).
• Requires written preliminary audit reports within 120 days; 30 days to address discrepancies; final reports within 180 days after preliminary or post-appeal final disposition; reports must be signed; withholdings may occur for large discrepancies ($25,000 or more) pending finalization; no interest accrues during the audit.
• Requires final audit reports to be shared with the plan sponsor; provides a written appeals process and, if unresolved, mediation by a certified mediator.
• Does not apply to audits involving fraud, willful misrepresentation, or abuse; effective date set after governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Pharmacies and Pharmacists