The state’s fair audit law includes many requirements, including that:

● A PBM shall provide 14 days’ advance notice of the audit (including a masked list of claims to be audited) and accommodate the pharmacist’s or pharmacy’s schedule to the greatest extent possible, and within 7 days of having received notice of an audit, the pharmacy may request that an on-site audit be rescheduled to a mutually convenient date, which must be reasonably granted.

● Audits may not be conducted more than twice annually in connection with a particular payor

● Audits involving random sampling procedures may not involve a sample size of greater than 300 individual prescription claims.

● An audit of a claim must be completed on or before the one-year anniversary of the date the claim is submitted.

● A PBM that conducts an on-site audit or a desk audit involving a pharmacist’s clinical or professional judgment must conduct the audit in consultation with a licensed pharmacist.

● Auditors may not enter the pharmacy area unless escorted by an individual authorized by the pharmacist or pharmacy.

● A pharmacy being audited may validate a claim with a prescription that complies with applicable federal laws and regulations and state laws and rules, or with a written record of a hospital, physician, or other authorized practitioner of the healing arts.

● A PBM may not calculate the amount of a recoupment based on an absence of documentation that is not required by applicable federal laws and regulations and state laws and rules to be maintained, or an error that does not result in actual financial harm to the patient or plan

● A PBM may not use extrapolation to complete an on-site audit or a desk audit of a pharmacist or pharmacy.

The amount of any recoupment must be based on the actual overpayment or underpayment and may not be based on an extrapolation.

● An unintentional clerical or recordkeeping error, such as a typographical error, scrivener’s error, or computer error, found during an on-site audit or a desk audit may not be the basis of a recoupment unless the error results in actual financial harm to a patient or plan.

● After an audit is initiated, a pharmacist or pharmacy may resubmit a claim if the deadline for submission of a claim has not expired.

● A PBM may have access to an audit report of a pharmacist or pharmacy only if the report was prepared in connection with an audit conducted by the health benefit plan issuer or pharmacy benefit manager.

● An auditor must conduct an on-site audit or a desk audit of similarly situated pharmacists or pharmacies under the same audit standards.

● An individual performing an on-site audit or a desk audit may not directly or indirectly receive compensation based on a percentage of the amount recovered as a result of the audit.

The law also establishes an audit appeal timeline and framework, and provides that these requirements may not be waived, voided, or nullified by contract. The commissioner of insurance is empowered to enforce these rules.

Link to Existing Law: Tex. Ins. Code Ann. § 1369.251, et. seq

This is fairly a substantive audit law. It would be benefited to some degree if it included a statutory private right of action for an aggreived provider.