Kentucky law protects pharmacies against unfair PBM audit practices, NACDS says

April 17, 2012

The recent passage of a Kentucky bill prohibiting pharmacy benefit managers from recouping payments through pharmacy audits when there is no evidence of fraud bodes well for similar federal legislation, according to a recent statement from the National Association of Chain Drug Stores.

The recent passage of a Kentucky bill prohibiting pharmacy benefit managers (PBMs) from recouping payments through pharmacy audits when there is no evidence of fraud bodes well for similar federal legislation, according to a recent statement from the National Association of Chain Drug Stores (NACDS).

Kentucky Governor Steve Beshear signed H.B. 349 into law last week. “For very minor issues, auditors were recouping the full reimbursement,” said Robert McFalls, executive director of the Kentucky Pharmacists Association (KPhA). Another provision of the law permits auditing entities such as PBMs to seek a refund or recoupment of overpayment “limited to the amount paid to the pharmacy minus the amount that should have been paid to the pharmacy, minus dispensing fee.” The law also limits the length of time that an auditor can require pharmacists to keep records to 2 years or federal law requirements, which is 3 years.

“We thank Governor Steve Beshear for signing this important pro-patient, pro-pharmacy legislation to curb tactics used by some PBMs that take away from the important business of improving patient health and making healthcare delivery more cost effective,” said NACDS President and CEO Steven C. Anderson. NACDS, the National Community Pharmacists Association, and other organizations are urging U.S. legislators to pass the Pharmacy Competition and Consumer Choice Act (S. 1058 and H.R. 1971), which requires transparency by PBMs in pharmacy audits.

KPhA also supports the passage of the Pharmacy Competition and Consumer Choice Act. “We totally understand the need to combat fraud, waste, and abuse, but [some PBMs] are nitpicking and collecting fees that are not fair,” McFalls said.