KRS 304.17A-741: Audit of pharmacy records -- Conditions.

When an audit of the records of a pharmacy is conducted by an auditing entity, it shall be

subject to the following conditions:

(1) The auditing entity shall give at least thirty (30) days' written notice to the pharmacy

prior to conducting the audit for each audit to be conducted;

(2) An audit performed by the auditing entity that involves clinical or professional

judgment shall be conducted in consultation with a pharmacist;

(3) A pharmacy may use the records of a hospital, physician, or other practitione r as

defined in KRS 217.015(35), or transmitted by any means of communication, for

purposes of validating pharmacy records with respect to orders or refills of a drug;

(4) An auditing entity shall not require a pharmacy to keep records for a period of time

longer than two (2) years, or as required by state or federal law or regulation;

(5) The recoupment of claims shall be based on the actual overpayment or

underpayment of claims unless the pharmacy agrees to a settlement to the contrary;

(6) A pharmacy sha ll be audited under the same standards and parameters as other

similarly situated pharmacies audited by the auditing entity;

(7) The period covered by the audit shall not exceed two (2) years from the date the

claim was submitted for payment except if a longer period is allowed by federal law

or if there is evidence of fraud;

(8) An audit shall not be scheduled during the first seven (7) calendar days of any

month, unless consented to by the pharmacy;

(9) A preliminary audit report shall be delivered to the pharmacy within one hundred

twenty (120) days after the exit interview;

(10) A final audit report shall be delivered to the pharmacy within six (6) months after

receipt of the preliminary audit report or after all appeals have been exhausted,

whichever is later;

(11) The auditing entity shall allow a pharmacy at least thirty (30) days following receipt

of the preliminary audit report to produce documentation to address any

discrepancies found during an audit;

(12) The final audit report shall provide claim-level detail of the amounts and reasons for

each claim recovery found due. If no amounts have been found due, the final audit

report shall so state;

(13) The auditing entity shall not receive payment based on the amount recovered in an

audit;

(14) The auditing entity shall conduct an exit interview at the close of the audit. The exit

interview shall be conducted at a time agreed to by the audited pharmacy. The

interview shall provide the audited pharmacy an opportunity to:

(a) Respond to questions from the auditing entity;

(b) Review and comment on the initial findings of the auditing entity; and

(c) Provide additional documentation to clarify the initial findings of the auditing

entity;

(15) 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 or the wrong medication being dispensed to the

patient. The pharmacy shall have the right to submit amended claims within thirty

(30) days of the discovery of an error to correct clerical or rec ordkeeping errors in

lieu of recoupment if the prescription was dispensed according to requirements set

forth in state or federal law;

(16) In the case of overpayment, the auditing entity may seek a refund or recoupment of

the overpayment in accordance wit h KRS 304.17A -712. The amount refunded or

recouped shall be 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;

and

(17) Claims shall be paid pursuant to KRS 304.17A-702.