SB383 Alabama 2012 Session

Summary

Primary Sponsor

William “Bill” M. BeasleySenator

Democrat

Co-Sponsor

Paul Bussman

Session

Regular Session 2012

Title

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

Summary

The Pharmacy Audit Integrity Act creates uniform standards for pharmacy record audits, adds an appeals process, and bans extrapolation in recoupment calculations.

What This Bill Does

It sets minimum, uniform standards for audits of pharmacy records by health benefit plans, PBMs, and related entities. It requires audit procedures to be described in contracts, provides written notice before on-site audits, and lays out documentation, reporting, and dispute-resolution steps to minimize disruption to pharmacy operations. It ensures clerical errors are not treated as fraud and allows corrected claims, requires licensed pharmacists for clinical judgments, and prohibits using extrapolation to determine recoupments or penalties. It also limits the audit look-back to two years, makes the auditing entity bear reasonable costs, and creates an appeals mechanism with mediation if needed.

Who It Affects

• Pharmacies and pharmacists: subject to audits under this act and protected by procedures that limit disruption, allow response time for discrepancies, and distinguish clerical errors from fraud.
• Health benefit plans, third-party payors, pharmacy benefit managers, and similar auditing entities: must follow uniform standards, provide defined audit procedures and reporting, bear audit costs, and adhere to look-back and dispute-resolution rules.

Key Provisions

• Establishes the Pharmacy Audit Integrity Act to set minimum, uniform audit standards for pharmacy records and defines key terms (health benefit plan, pharmacy, pharmacy benefit manager).
• Applies to audits conducted by managed care companies, health benefit plans, PBMs, and related entities or their representatives.
• Audits must follow contractually identified procedures, provide at least two weeks’ notice for on-site audits, and minimize disruption to pharmacist services.
• Clerical errors are not fraud; corrected via amended claims; fraud penalties require proof of intent.
• Licensed pharmacist must be involved for audits requiring clinical judgment.
• Audits may not use extrapolation to calculate recoupments or penalties; future recoupment cannot be based on extrapolated errors.
• Look-back period for audits is limited to two years; audits cannot be conducted six months after contract termination.
• Audit costs are borne by the auditing entity (with Alabama Medicaid exceptions if sampling exceeds 100 unique prescriptions).
• Preliminary audit reports must be issued within 90 days; pharmacies have at least 30 days to respond; final reports within 180 days after preliminary report or final appeal.
• An appeals process is provided; unresolved issues may go to mediation with costs split by agreement or mediator decision.
• Not applicable to audits involving fraud, willful misrepresentation, or waste/abuse.
• Effective date is the first day of the third month after passage/approval.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Pharmacies and Pharmacists