Indiana Code 27-1-24.5-22. Required information; appeals process; auditing procedures
(1) Identify to contracted:
Terms Used In Indiana Code 27-1-24.5-22
- Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
- Commissioner: means the "insurance commissioner" of this state. See Indiana Code 27-1-2-3
- Department: means "the department of insurance" of this state. See Indiana Code 27-1-2-3
- health plan: means the following:
Indiana Code 27-1-24.5-5
- maximum allowable cost: means the maximum amount that a pharmacy benefit manager will reimburse a pharmacy for the cost of a generic drug. See Indiana Code 27-1-24.5-7
- maximum allowable cost list: means a list of drugs that is used:
Indiana Code 27-1-24.5-8
- pharmacy: means the physical location:
Indiana Code 27-1-24.5-11
- pharmacy benefit manager: means an entity that, on behalf of a health plan, state agency, insurer, managed care organization, or other third party payor:
Indiana Code 27-1-24.5-12
- pharmacy services administrative organization: means an organization that assists independent pharmacies and pharmacy benefit managers or health plans to achieve administrative efficiencies, including contracting and payment efficiencies. See Indiana Code 27-1-24.5-15
(B) pharmacies if the pharmacy benefit manager contracts directly with pharmacies;
the sources used by the pharmacy benefit manager to calculate the drug product reimbursement paid for covered drugs available under the pharmacy health plan administered by the pharmacy benefit manager.
(2) Establish an appeal process for contracted pharmacies, pharmacy services administrative organizations, or group purchasing organizations to appeal and resolve disputes concerning the maximum allowable cost pricing.
(3) Update and make available to pharmacies:
(A) at least every seven (7) days; or
(B) in a different time frame if contracted between a pharmacy benefit manager and a pharmacy;
the pharmacy benefit manager’s maximum allowable cost list.
(4) Determine that a prescription drug:
(A) is not obsolete;
(B) is generally available for purchase by pharmacies in Indiana from a national or regional wholesaler licensed in Indiana; and
(C) is not:
(i) temporarily unavailable;
(ii) listed on a drug shortage list; or
(iii) unable to be lawfully substituted;
before the prescription drug is placed or continued on a maximum allowable cost list.
(b) The appeal process required by subsection (a)(2) must include the following:
(1) The right to appeal a claim not to exceed sixty (60) days following the initial filing of the claim.
(2) The investigation and resolution of a filed appeal by the pharmacy benefit manager in a time frame determined by the commissioner.
(3) If an appeal is denied, a requirement that the pharmacy benefit manager do the following:
(A) Provide the reason for the denial.
(B) Provide the appealing contracted pharmacy, pharmacy services administrative organization, or group purchasing organization with the national drug code number of the prescription drug that is available from a national or regional wholesaler operating in Indiana.
(4) If an appeal is approved, a requirement that the pharmacy benefit manager do the following:
(A) Change the maximum allowable cost of the drug for the pharmacy that filed the appeal as of the initial date of service that the appealed drug was dispensed.
(B) Adjust the maximum allowable cost of the drug for the appealing pharmacy and for all other contracted pharmacies in the same network of the pharmacy benefit manager that filled a prescription for patients covered under the same health plan beginning on the initial date of service the appealed drug was dispensed.
(C) Notify each pharmacy in the pharmacy benefit manager’s network that the maximum allowable cost for the drug has been adjusted as a result of an approved appeal.
(D) Adjust the drug product reimbursement for contracted pharmacies that resubmit claims to reflect the adjusted maximum allowable cost, if applicable.
(E) Allow the appealing pharmacy and all other contracted pharmacies in the network that filled the prescriptions for patients covered under the same health plan to reverse and resubmit claims and receive payment based on the adjusted maximum allowable cost from the initial date of service the appealed drug was dispensed.
(F) Make retroactive price adjustments in the next payment cycle unless otherwise agreed to by the pharmacy.
(5) The establishment of procedures for auditing submitted claims by a contracted pharmacy in a manner established by administrative rules under IC 4-22-2 by the department. The auditing procedures:
(A) may not use extrapolation or any similar methodology;
(B) may not allow for recovery by a pharmacy benefit manager of a submitted claim due to clerical or other error where the patient has received the drug for which the claim was submitted;
(C) must allow for recovery by a contracted pharmacy for underpayments by the pharmacy benefit manager; and
(D) may only allow for the pharmacy benefit manager to recover overpayments on claims that are actually audited and discovered to include a recoverable error.
(c) The department must approve the manner in which a pharmacy benefit manager may respond to an appeal filed under this section. The department shall establish a process for a pharmacy benefit manager to obtain approval from the department under this section.
As added by P.L.68-2020, SEC.1. Amended by P.L.32-2021, SEC.79; P.L.196-2021, SEC.24.