The state’s fair audit law includes requirements such as: the PBM must provide 30 days’ advance written notice of audits; recoupment of claims shall be based on the actual overpayment or underpayment of claims; the audit period covered will not exceed two years; the auditing entity shall not receive payment based on the amount recovered in an audit; if an audit results in the identification of any clerical or recordkeeping errors such as typographical errors, scrivener’s errors, omissions, or computer errors, the pharmacy shall not be subject to recoupment of funds by the auditing entity unless the auditing entity can provide proof of intent to commit fraud or the error results in an actual overpayment to the pharmacy; the pharmacy must be allowed to submit additional documentation to clarify the initial findings; and in the case of overpayment, the auditing entity may only seek a refund or recoupment of the overpayment limited to the amount paid to the pharmacy minus the amount that should have been paid to the pharmacy absent the overpayment and shall not include the dispensing fee if the correct medication was dispensed to the patient.

Link to Existing Law: Ky. Rev. Stat. Ann. § 304.17A-741

This is a fairly comprehensive fair audit law, including its language regarding limitations on overpayment amounts. It would be benefited to some degree if it included a statutory private right of action for an aggreived provider and if it placed a limit on the number of prescriptions that could be reviewed at any time.