HB 1643

HOUSE OF REPRESENTATIVES
H.B. NO.
1643
THIRTY-THIRD LEGISLATURE, 2026
H.D. 2
STATE OF HAWAII
S.D. 2
C.D. 1
A BILL FOR AN ACT
RELATING TO PHARMACY.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
���� SECTION 1.� Chapter 461, Hawaii Revised Statutes, is
amended by adding a new section to be appropriately designated and to read as
follows:
���� "�461-   � Audit
of records of registered pharmacist or pharmacy.� (a)� All requests for an audit of records of a registered
pharmacist or pharmacy shall be made in writing and include a requirement that
the registered pharmacist or pharmacy provide a signature acknowledging receipt
of the notice of request for an audit.� When
an audit of records of a registered pharmacist or pharmacy is conducted by the
State, a county, an insurer regulated under article 10A of chapter 431, a
mutual benefit society, a health maintenance organization, a pharmacy benefit
manager, a medical service organization, a nonprofit hospital, or any other
entity representing the same, the audit shall be conducted in the following
manner:
���� (1)� Written
electronic notice shall be given to the registered pharmacist or pharmacy at
least two weeks before conducting the on-site audit for each audit cycle and
shall include a list identifying the prescriptions subject to audit by
prescription number, which may be partially masked, including the last two
digits, or a date range sufficient to identify the claims, and date of fill;
���� (2)� Any audit
performed under this section that involves clinical or professional judgment
shall be conducted in consultation with a registered pharmacist who has
knowledge of this chapter;
���� (3)� Any clerical or
recordkeeping error identified during an audit, such as a typographical error,
scrivener's error, omission, or computer error, shall not, in and of itself,
constitute fraud or intentional misrepresentation and shall not be the basis of
a recoupment unless the error results in an actual overpayment to the pharmacy
or the wrong medication being dispensed to the patient.� Notwithstanding any other law to the
contrary, no such claim shall be subject to criminal penalties without proof of
intent to commit fraud;
���� (4)� A registered
pharmacist or pharmacy may use the records of a hospital, physician, dentist,
veterinarian, advanced practice registered nurse, or other authorized health
care provider for drugs or medical supplies written or transmitted by any means
of communication for purposes of validating pharmacy records with respect to
orders or refills of a legend drug or narcotic drug;
���� (5)� A finding of
overpayment or underpayment may be a projection based on the number of patients
served having a similar diagnosis or on the number of similar orders or refills
for similar drugs; provided that recoupment of claims shall be based on the
actual overpayment or underpayment unless the projection for overpayment or
underpayment is part of a settlement as agreed to by the registered pharmacist
or pharmacy;
���� (6)� Each registered
pharmacist or pharmacy shall be audited under the standards and parameters as
other similarly situated registered pharmacists or pharmacies audited by the
State, a county, an insurer regulated under article 10A of chapter 431, a
mutual benefit society, a health maintenance organization, a pharmacy benefit
manager, a medical service organization, a nonprofit hospital, or any other
entity representing the same;
���� (7)� A registered
pharmacist or pharmacy shall be allowed the length of time described in the registered
pharmacist's or pharmacy's contract or provider manual following receipt of the
preliminary audit report to produce documentation to address any discrepancy
found during an audit.� A registered
pharmacist or pharmacy may correct a clerical or recordkeeping error by
submitting an amended claim during the designated time frame if the
prescription was dispensed according to the requirements of federal and state law.� If the registered pharmacist's or pharmacy's
contract or provider manual does not specify the allowed length of time for the
registered pharmacist or pharmacy to address any discrepancy found in the audit
following receipt of the preliminary report, then that registered pharmacist or
pharmacy shall be allowed no less than sixty days following receipt of the
preliminary audit report to respond and produce documentation;
���� (8)� The period
covered by an audit shall not exceed two years from the date the claim was
submitted to or adjudicated by the State, a county, an insurer regulated under
article 10A of chapter 431, a mutual benefit society, a health maintenance
organization, a pharmacy benefit manager, a medical service organization, a
nonprofit hospital, or any other entity representing the same, except this
paragraph shall not apply where a longer period is required by any federal rule
or regulation;
���� (9)� An audit shall
not be initiated or scheduled during the first seven calendar days of any
month, unless otherwise consented to by the registered pharmacist or pharmacy;
��� (10)� The preliminary
audit report shall be delivered to the registered pharmacist or pharmacy within
one hundred twenty days after conclusion of the audit.� A final audit report shall be delivered to
the registered pharmacist or pharmacy within six months after receipt of the
preliminary audit report or final appeal, whichever is later;
��� (11)� Notwithstanding
any other law to the contrary, no audit of a registered pharmacist or pharmacy
shall use the accounting practice of extrapolation in calculating recoupments
or penalties for audits;
��� (12)� Any recoupment
related to clerical or recordkeeping errors shall not include the cost of the
drug or dispensed product except in the following cases:
��������� (A)� Fraud
or other intentional and wilful misrepresentation;
��������� (B)� Dispensing
in excess of the pharmacy benefit contract established by a plan sponsor; or
��������� (C)� Prescriptions
not filled in accordance with the prescriber's order; and
��� (13)� The
absence of documentation necessary to substantiate the validity of the claim,
including but not limited to a valid prescription or drug acquisition record,
shall not be considered a clerical or recordkeeping error.
���� (b)� Recoupment of claims shall only be applied to
prescriptions disclosed in the audit and shall not be extrapolated to apply to
other prescriptions.
���� (c)� Recoupments of any disputed funds shall only
occur after final internal disposition of the audit, including the appeals
process as set forth in subsection (d).
���� (d)� Each pharmacy benefit manager conducting an
audit shall establish an appeals process under which a registered pharmacist or
pharmacy may appeal an unfavorable preliminary audit report to the pharmacy
benefit manager on whose behalf the audit was conducted.� The pharmacy benefit manager conducting any
audit shall provide to the registered pharmacist or pharmacy, before or at the
time of delivery of the preliminary audit report, a written explanation of the
appeals process, including the name, address, and telephone number of the
person to whom an appeal should be addressed.�
If, following the appeal, it is determined that an unfavorable audit
report or any portion of the audit report is unsubstantiated, the audit report
or the portion shall be dismissed without the necessity of further proceedings.
���� (e)� A registered pharmacist or pharmacy may be
allowed to reverse and rebill prescriptions due to clerical changes during the
correction time frame of the audit.
���� (f)� A pharmacy provider may use any prescription
that meets the requirements of being a legal prescription under the laws of the
State to validate claims submitted for reimbursement for dispensing of original
and refill prescriptions or changes made to prescriptions.
���� (g)� A demand for recoupment, repayment, or offset
against future reimbursement for an overpayment on a claim for dispensing of an
original or refill prescription shall not include the dispensing fee, unless
the prescription that is the subject of the claim was not actually dispensed,
was not valid, was fraudulent, or was outside the contract.� This subsection shall not apply where a
pharmacy is requested, pursuant to a contractual provision, to correct an error
in a claim submitted in good faith.
���� (h)� Audit information from an audit conducted by
one pharmacy benefit manager shall not be shared with or utilized by another
pharmacy benefit manager.� This
subsection shall not apply to an investigative audit that is believed by the
pharmacy benefit manager to involve fraud or wilful misrepresentation.
���� (i)� Unless otherwise agreed to by contract, no
audit finding or demand for recoupment, repayment, or offset against future
reimbursement shall be made for any claim for dispensing of an original or
refill prescription because of information missing from a prescription or for
information not placed in a particular location on a prescription when the
information or location of the information is not required or specified by
federal or state law.
���� (j)� In the event the actual quantity dispensed on
a valid prescription for a covered beneficiary exceeds the allowable maximum
days supply of the product as defined in the applicable agreement between a
pharmacy benefit manager and a pharmacy provider, the amount allowed to be
recouped, repaid, or offset against future reimbursement shall be limited to an
amount that is calculated based on the quantity of the product dispensed found
to be in excess of the allowed days' supply quantity and using the cost of the
product as reflected on the original claim.
���� (k)� A pharmacy provider shall be allowed to
dispense, and shall be reimbursed for, the full quantity of the smallest
available commercially packaged product, including but not limited to eye
drops, insulin, and topical products, that contains the total amount that is
required to be dispensed to meet the days' supply ordered by the prescriber,
even if the full quantity of the commercially prepared package exceeds the
maximum days supply allowed.
���� (l)� The highest daily total dose that may be
utilized by the patient pursuant to the prescriber's directions shall be used
to make a determination of the days' supply.�
For prescriptions having a titrated dose schedule, the schedule shall be
used to determine the days' supply.
���� (m)� Subsections (f) to (l) shall not apply to any
investigative audit that involves allegations of fraud or wilful
misrepresentation.
���� (n)� This section shall not apply to the
department of health.
���� (o)� For the purposes of this section,
"pharmacy benefit manager" has the same meaning as in section 431S-1."
���� SECTION 2.� Section 431S-1,
Hawaii Revised Statutes, is amended by amending the definition of
"pharmacy benefit manager" to read as follows:
���� ""Pharmacy benefit
manager" means any person that performs pharmacy benefit management,
including but not limited to a person or entity in a contractual or employment
relationship with a pharmacy benefit manager to perform pharmacy benefit
management for a covered entity.� "Pharmacy
benefit manager" does not include a health maintenance organization that
is part of a fully integrated delivery system in which enrollees primarily use
pharmacies that are owned and operated by the health maintenance organization."
���� SECTION 3.� New statutory material is underscored.
���� SECTION 4.� This Act shall take effect upon its approval.
Report Title:
Pharmacy;
Registered Pharmacists; Audits; Pharmacy Benefit Managers; Exclusion; Health
Maintenance Organization; Integrated Delivery System
Description:
Specifies
a framework for the administration of audits of records of registered
pharmacists and pharmacies.� Amends the
definition of "pharmacy benefit manager" under chapter 431S, HRS, to
exclude certain health maintenance organizations.� (CD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.