Michigan Laws 550.825 – Contractual responsibilities; conflict of interest; exception for certain audits
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Terms Used In Michigan Laws 550.825
- Claim: means a request for payment for administering, filling, or refilling a drug or for providing a pharmacy service or a medical supply or device to an enrollee. See Michigan Laws 550.815
- Contract: A legal written agreement that becomes binding when signed.
- Fraud: Intentional deception resulting in injury to another.
- Health plan: means a qualified health plan as that term is defined in section 1261 of the insurance code of 1956, 1956 PA 218, MCL 500. See Michigan Laws 550.815
- in writing: shall be construed to include printing, engraving, and lithographing; except that if the written signature of a person is required by law, the signature shall be the proper handwriting of the person or, if the person is unable to write, the person's proper mark, which may be, unless otherwise expressly prohibited by law, a clear and classifiable fingerprint of the person made with ink or another substance. See Michigan Laws 8.3q
- Network pharmacy: means a retail pharmacy or other pharmacy that contracts directly or through a pharmacy services administration organization with a pharmacy benefit manager. See Michigan Laws 550.817
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Pharmacist: means that term as defined in section 17707 of the public health code, 1978 PA 368, MCL 333. See Michigan Laws 550.817
- Pharmacy: means that term as defined in section 17707 of the public health code, 1978 PA 368, MCL 333. See Michigan Laws 550.817
- pharmacy benefit manager: means an entity that contracts with a pharmacy or a pharmacy services administration organization on behalf of a health plan or carrier to provide pharmacy health services to individuals covered by the health plan or carrier or administration that includes, but is not limited to, any of the following:
(i) Contracting directly or indirectly with pharmacies to provide drugs to enrollees or other covered persons. See Michigan Laws 550.817
(1) A pharmacy benefit manager shall exercise good faith and fair dealing in the performance of its contractual duties to a health plan or network pharmacy. A provision in a contract that attempts to waive or limit the obligation under this subsection is void.
(2) A pharmacy benefit manager shall notify a health plan in writing of any activity, policy, or practice of the pharmacy benefit manager that directly or indirectly presents a conflict of interest with the duties imposed in this section.
(3) A pharmacy benefit manager shall not directly or indirectly, including indirectly through a pharmacy services administrative organization, charge or hold a pharmacist or pharmacy responsible for a fee related to a claim or reduce the amount of the claim at the time of the claim’s adjudication or after the claim is adjudicated.
(4) This section does not apply to an audit under section 28 of a pharmacy’s records if either of the following applies:
(a) The review of claims data or statements indicates fraud, abuse, other intentional misconduct, or waste.
(b) An investigative method, other than a review described in subdivision (a), indicates that the pharmacy is or has committed fraud or other intentional misrepresentation.
(5) Except for the recoupment of money under an audit conducted under section 28, a pharmacy benefit manager shall not recoup money from a pharmacist or pharmacy in connection with a claim for which the pharmacist or pharmacy has been paid unless the recoupment is required by law.