This document includes Senate Committee Amendments incorporated into the bill on Tue, Feb 27, 2024 at 11:30 AM by lpoole.
Representative Norman K Thurston proposes the following substitute bill:


1     
HEALTH INSURANCE BENEFIT AMENDMENTS

2     
2024 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Norman K Thurston

5     
Senate Sponsor: Curtis S. Bramble

6     

7     LONG TITLE
8     General Description:
9          This bill amends and enacts provisions related to health insurance benefits.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     requires the commissioner of the Insurance Department to assist in creating a form
14     if requested;
15          ▸     requires a health benefit plan to ensure pharmaceutical rebates are used for certain
16     purposes;
17          ▸     enacts provisions related to pharmacy network requirements for health benefit
18     plans;
19          ▸     modifies requirements related to pharmacy audits;
20          ▸     requires a pharmacy benefit manager to offer certain options to self-funded health
21     benefit plans; and
22          ▸     makes technical and conforming changes.
23     Money Appropriated in this Bill:
24          None
25     Other Special Clauses:
26          This bill provides a special effective date.
27     Utah Code Sections Affected:
28     AMENDS:
29          31A-2-212, as last amended by Laws of Utah 2020, Chapter 32
30          31A-22-643, as enacted by Laws of Utah 2014, Chapter 111
31          31A-46-102, as last amended by Laws of Utah 2020, Chapters 198, 275 and 372
32          31A-46-301, as last amended by Laws of Utah 2020, Chapter 198
33          31A-46-304, as last amended by Laws of Utah 2020, Chapter 198
34          58-17b-622, as last amended by Laws of Utah 2023, Chapter 329
35     ENACTS:
36          31A-46-311, Utah Code Annotated 1953
37     REPEALS:
38          31A-46-101, as last amended by Laws of Utah 2020, Chapter 198
39     Uncodified Material Affected:
40     ENACTS UNCODIFIED MATERIAL
41     

42     Be it enacted by the Legislature of the state of Utah:
43          Section 1. Section 31A-2-212 is amended to read:
44          31A-2-212. Miscellaneous duties.
45          (1) Upon issuance of an order limiting, suspending, or revoking a person's authority to
46     do business in Utah, and when the commissioner begins a proceeding against an insurer under
47     Chapter 27a, Insurer Receivership Act, the commissioner:
48          (a) shall notify by mail the producers of the person or insurer of whom the
49     commissioner has record; and
50          (b) may publish notice of the order or proceeding in any manner the commissioner
51     considers necessary to protect the rights of the public.
52          (2) (a) When required for evidence in a legal proceeding, the commissioner shall
53     furnish a certificate of authority of a licensee to transact the business of insurance in Utah on
54     any particular date.
55          (b) The court or other officer shall receive a certificate of authority described in this
56     Subsection (2) in lieu of the commissioner's testimony.
57          (3) (a) On the request of an insurer authorized to do a surety business, the
58     commissioner shall furnish a copy of the insurer's certificate of authority to a designated public
59     officer in this state who requires that certificate of authority before accepting a bond.
60          (b) The public officer described in Subsection (3)(a) shall file the certificate of
61     authority furnished under Subsection (3)(a).
62          (c) After a certified copy of a certificate of authority is furnished to a public officer, it
63     is not necessary, while the certificate of authority remains effective, to attach a copy of it to any
64     instrument of suretyship filed with that public officer.
65          (d) Whenever the commissioner revokes the certificate of authority or begins a
66     proceeding under Chapter 27a, Insurer Receivership Act, against an insurer authorized to do a
67     surety business, the commissioner shall immediately give notice of that action to each public
68     officer who is sent a certified copy under this Subsection (3).
69          (4) (a) The commissioner shall immediately notify every judge and clerk of the courts
70     of record in the state when:
71          (i) an authorized insurer doing a surety business:
72          (A) files a petition for receivership; or
73          (B) is in receivership; or
74          (ii) the commissioner has reason to believe that the authorized insurer doing surety
75     business:
76          (A) is in financial difficulty; or
77          (B) has unreasonably failed to carry out any of the authorized insurer's contracts.
78          (b) Upon the receipt of the notice required by this Subsection (4), it is the duty of the
79     judges and clerks to notify and require a person that files with the court a bond on which the
80     authorized insurer doing surety business is surety to immediately file a new bond with a new
81     surety.
82          (5) (a) The commissioner shall require an insurer that issues, sells, renews, or offers
83     health insurance coverage in this state to comply with PPACA and administrative rules adopted
84     by the commissioner related to regulation of health benefit plans, including:
85          (i) lifetime and annual limits;
86          (ii) prohibition of rescissions;
87          (iii) coverage of preventive health services;
88          (iv) coverage for a child or dependent;
89          (v) pre-existing condition limitations;
90          (vi) insurer transparency of consumer information including plan disclosures, uniform
91     coverage documents, and standard definitions;
92          (vii) premium rate reviews;
93          (viii) essential health benefits;
94          (ix) provider choice;
95          (x) waiting periods;
96          (xi) appeals processes;
97          (xii) rating restrictions;
98          (xiii) uniform applications and notice provisions;
99          (xiv) certification and regulation of qualified health plans; and
100          (xv) network adequacy standards.
101          (b) The commissioner shall preserve state control over:
102          (i) the health insurance market in the state;
103          (ii) qualified health plans offered in the state; and
104          (iii) the conduct of navigators, producers, and in-person assisters operating in the state.
105          (6) If requested by an association that represents pharmacies or pharmacists, the
106     commissioner shall assist the association in developing a form that outlines a pharmacy's rights
107     under state and federal law related to pharmacy benefits, pharmacy benefit managers, and
108     health benefit plans.
109          Section 2. Section 31A-22-643 is amended to read:
110          31A-22-643. Prescription synchronization -- Copay and dispensing fee
111     restrictions -- Rebate requirements -- Pharmacy networks.
112          (1) For purposes of this section:
113          (a) "Administrative fee" means the same as that term is defined in Section 31A-46-102.
114          (b) "Administrative fee excess" means the same as that term is defined in Section
115     31A-46-102.
116          (c) "Copay" means the copay normally charged for a prescription drug.
117          [(b)] (d) "Health insurer" means an insurer, as defined in Subsection 31A-22-634(1).
118          [(c)] (e) "Network pharmacy" means a pharmacy included in a health insurance plan's
119     network of pharmacy providers.
120          (f) "Pharmacy benefit manager" means the same as that term is defined in Section
121     31A-46-102.
122          [(d)] (g) "Prescription drug" means a prescription drug, as defined in Section
123     58-17b-102, that is prescribed for a chronic condition.
124          (h) "Rebate" means the same as that term is defined in Section 31A-46-102.
125          (i) "Standard rebate amount" means a rebate amount that:
126          (i) is estimated and set by a health benefit plan or the health benefit plan's pharmacy
127     benefit manager for a drug Ŝ→ [product] or device ←Ŝ ;
128          (ii) adjusts each quarter based on rebate underpayments or overpayments; and
129          (iii) is applied when the drug Ŝ→ [product] or device ←Ŝ is purchased.
130          (2) A health insurance plan may not charge an amount in excess of the copay for the
131     dispensing of a prescription drug in a quantity less than the prescribed amount if:
132          (a) the pharmacy dispenses the prescription drug in accordance with the health insurer's
133     synchronization policy; and
134          (b) the prescription drug is dispensed by a network pharmacy.
135          (3) A health insurance plan that includes a prescription drug benefit:
136          (a) shall implement a synchronization policy for the dispensing of prescription drugs to
137     the plan's enrollees; and
138          (b) may not base the dispensing fee for an individual prescription on the quantity of the
139     prescription drug dispensed to fill or refill the prescription unless otherwise agreed to by the
140     plan and the contracted pharmacy at the time the individual requests synchronization.
141          (4) [This section applies to health benefit plans renewed or entered into on or after
142     January 1, 2015.]
143          (a) A health benefit plan and the health benefit plan's pharmacy benefit manager shall
144     ensure that each pharmaceutical manufacturer rebate is used exclusively to benefit enrollees
145     using one or multiple of the following methods:
146          (i) passing down the rebate to the point of sale to offset an enrollee's deductible or
147     coinsurance;
148          (ii) using the rebate to reduce premiums paid by Ŝ→ [the enrollee] enrollees ←Ŝ ;
149          (iii) using the rebate to enhance enrollee health benefits; or
150          (iv) the health benefit plan:
151          (A) when choosing among one or more prescription drugs or devices that are all
152     deemed clinically appropriate for inclusion into the health benefit plan's formulary, basing any
153     financial consideration for inclusion into the formulary exclusively on the lowest net price of a
154     prescription drug or device after accounting for available rebates, discounts, or other price
155     concessions; and
156          (B) ensuring any cost sharing obligation to the enrollee is based on the lowest net price
157     at the time the drug or device is purchased.
158          (b) When passing down a rebate as described in Subsection (4)(a)(i), a health benefit
159     plan or the health benefit plan's pharmacy benefit manager may:
160          (i) divide the rebate between the health benefit plan and the enrollee in a manner that is
161     proportional to the enrollee's payment obligation; or
162          (ii) use a standard rebate amount.
162a     Ŝ→ (c) A health benefit plan or pharmacy benefit manager may reduce the value of a rebate
162b     passed through at the time a drug or device is purchased if the health benefit plan or
162c     pharmacy benefit manager:
162d     (i) knows that the cost sharing requirement is being paid on behalf of the enrollee by another
162e     person unless the person paying:
162f     (A) is a health benefit plan or pharmacy benefit manager providing a benefit; or
162g     (B) would not directly or indirectly benefit from the enrollee purchasing the drug or device;
162h     and
162i     (ii) is using a method described in Subsection (4)(a)(i) or (iv).
162j     (d) Rebates reduced under Subsection (4)(c) shall be used to reduce premiums or otherwise
162k     benefit enrollees in the current or subsequent plan year. ←Ŝ
163          (5) A health benefit plan may not prohibit or condition participation in one pharmacy
164     network on participation in another pharmacy network.
165          (6) A health benefit plan and the health benefit plan's pharmacy benefit manager shall
166     use any administrative fee excess to reduce enrollee premiums.
167          (7) Subsections (4) through (6) apply to a health benefit plan renewed or entered into
168     on or after July 1, 2025.
169          Section 3. Section 31A-46-102 is amended to read:
170          31A-46-102. Definitions.
171          As used in this chapter:
172          (1) "340B drug" means a drug purchased through the 340B drug discount program by a
173     340B entity.
174          (2) "340B drug discount program" means the 340B drug discount program described in
175     42 U.S.C. Sec. 256b.
176          (3) "340B entity" means:
177          (a) an entity participating in the 340B drug discount program;
178          (b) a pharmacy of an entity participating in the 340B drug discount program; or
179          (c) a pharmacy contracting with an entity participating in the 340B drug discount
180     program to dispense drugs purchased through the 340B drug discount program.
181          (4) (a) "Administrative fee" means [any payment, other than a rebate, that a
182     pharmaceutical manufacturer makes directly or indirectly to a pharmacy benefit manager] a
183     payment from a pharmaceutical manufacturer that is directly attributable to the pharmacy
184     benefit manager to invoice, collect, audit, and account for funds received from a
185     pharmaceutical manufacturer.
186          (b) "Administrative fee" does not include any administrative fee excess.
187          (5) "Administrative fee excess" means any amount of an administrative fee that
188     exceeds the direct costs of a pharmacy benefit manager to invoice, collect, audit, and account
189     for funds received from a pharmaceutical manufacturer.
190          [(5)] (6) "Allowable claim amount" means the amount paid by an insurer under the
191     customer's health benefit plan.
192          [(6)] (7) "Contracting insurer" means an insurer with whom a pharmacy benefit
193     manager contracts to provide a pharmacy benefit management service.
194          [(7)] (8) "Cost share" means the amount paid by an insured customer under the
195     customer's health benefit plan.
196          [(8) "Device" means the same as that term is defined in Section 58-17b-102.]
197          (9) "Direct or indirect remuneration" means any adjustment in the total compensation:
198          (a) received by a pharmacy from a pharmacy benefit manager for the sale of a drug,
199     device, or other product or service; and
200          (b) that is determined after the sale of the product or service.
201          (10) "Dispense" means the same as that term is defined in Section 58-17b-102.
202          (11) "Drug" means the same as that term is defined in Section 58-17b-102.
203          (12) "Insurer" means the same as that term is defined in Section 31A-22-636.
204          (13) "Maximum allowable cost" means:
205          (a) a maximum reimbursement amount for a group of pharmaceutically and
206     therapeutically equivalent drugs; or
207          (b) any similar reimbursement amount that is used by a pharmacy benefit manager to
208     reimburse pharmacies for multiple source drugs.
209          (14) "Medicaid program" means the same as that term is defined in Section 26B-3-101.
210          (15) "Obsolete" means a product that may be listed in national drug pricing compendia
211     but is no longer available to be dispensed based on the expiration date of the last lot
212     manufactured.
213          (16) "Patient counseling" means the same as that term is defined in Section
214     58-17b-102.
215          (17) "Pharmaceutical facility" means the same as that term is defined in Section
216     58-17b-102.
217          (18) "Pharmaceutical manufacturer" means a pharmaceutical facility that manufactures
218     prescription drugs.
219          (19) "Pharmacist" means the same as that term is defined in Section 58-17b-102.
220          (20) "Pharmacy" means the same as that term is defined in Section 58-17b-102.
221          (21) "Pharmacy benefits management service" means any of the following services
222     provided to a health benefit plan, or to a participant of a health benefit plan:
223          (a) negotiating the amount to be paid by a health benefit plan for a prescription drug; or
224          (b) administering or managing a prescription drug benefit provided by the health
225     benefit plan for the benefit of a participant of the health benefit plan, including administering
226     or managing:
227          (i) an out-of-state mail service pharmacy;
228          (ii) a specialty pharmacy;
229          (iii) claims processing;
230          (iv) payment of a claim;
231          (v) retail network management;
232          (vi) clinical formulary development;
233          (vii) clinical formulary management services;
234          (viii) rebate contracting;
235          (ix) rebate administration;
236          (x) a participant compliance program;
237          (xi) a therapeutic intervention program;
238          (xii) a disease management program; or
239          (xiii) a service that is similar to, or related to, a service described in Subsection (21)(a)
240     or [(21)(b)(i) through (xii).] this Subsection (21)(b).
241          (22) "Pharmacy benefit manager" means a person licensed under this chapter to
242     provide a pharmacy benefits management service.
243          (23) "Pharmacy service" means a product, good, or service provided to an individual by
244     a pharmacy or pharmacist.
245          (24) "Pharmacy services administration organization" means an entity that contracts
246     with a pharmacy to assist with third-party payer interactions and administrative services related
247     to third-party payer interactions, including:
248          (a) contracting with a pharmacy benefit manager on behalf of the pharmacy; and
249          (b) managing a pharmacy's claims payments from third-party payers.
250          (25) "Pharmacy service entity" means:
251          (a) a pharmacy services administration organization; or
252          (b) a pharmacy benefit manager.
253          (26) "Prescription device" means the same as that term is defined in Section
254     58-17b-102.
255          (27) "Prescription drug" means the same as that term is defined in Section 58-17b-102.
256          (28) (a) "Rebate" [means a refund, discount, or other price concession that is paid by a
257     pharmaceutical manufacturer to a pharmacy benefit manager based on a prescription drug's
258     utilization or effectiveness.] means a discount or other price concession based on the utilization
259     or effectiveness of a prescription drug Ŝ→ or device ←Ŝ that is paid by a manufacturer or third
259a     party, directly or
260     indirectly, to a pharmacy benefit manager or insurer after a claim has been processed and paid
261     at a pharmacy.
262          (b) "Rebate" includes an incentive, a disbursement, and a reasonable estimate of a
263     volume-based discount.
264          [(b)] (c) "Rebate" does not include:
265          (i) an administrative fee[.] ; or
266          (ii) any administrative fee excess.
267          (29) (a) "Reimbursement report" means a report on the adjustment in total
268     compensation for a claim.
269          (b) "Reimbursement report" does not include a report on adjustments made pursuant to
270     a pharmacy audit or reprocessing.
271          (30) "Retail pharmacy" means the same as that term is defined in Section 58-17b-102.
272          (31) "Sale" means a prescription drug or prescription device claim covered by a health
273     benefit plan.
274          (32) "Spread pricing" means the practice in which a pharmacy benefit manager charges
275     a health benefit plan a different amount for pharmacist services than the amount the pharmacy
276     benefit manager reimburses a pharmacy for the pharmacist's services.
277          [(32)] (33) "Wholesale acquisition cost" means the same as that term is defined in 42
278     U.S.C. Sec. 1395w-3a.
279          Section 4. Section 31A-46-301 is amended to read:
280          31A-46-301. Reporting requirements.
281          (1) Before April 1 of each year, a pharmacy benefit manager operating in the state shall
282     report to the department, for the previous calendar year:
283          (a) any insurer, pharmacy, or pharmacist in the state with which the pharmacy benefit
284     manager had a contract;
285          (b) the total value, in the aggregate, of [all rebates and administrative fees] a rebate, an
286     administrative fee, and any administrative fee excess that [are] is attributable to enrollees of a
287     contracting insurer; and
288          (c) if applicable, the percentage of aggregate rebates that the pharmacy benefit manager
289     retained under the pharmacy benefit manager's agreement to provide pharmacy benefits
290     management services to a contracting insurer.
291          (2) Records submitted to the commissioner under Subsections (1)(b) and (c) are a
292     protected record under Title 63G, Chapter 2, Government Records Access and Management
293     Act.
294          (3) (a) The department shall publish the information provided by a pharmacy benefit
295     manager under Subsection (1)(c) in the annual report described in Section 31A-2-201.2.
296          (b) The department may not publish information submitted under Subsection (1)(b) or
297     (c) in a manner that:
298          (i) makes a specific submission from a contracting insurer or pharmacy benefit
299     manager identifiable; or
300          (ii) is likely to disclose information that is a trade secret as defined in Section 13-24-2.
301          (c) At least 30 days before the day on which the department publishes the data, the
302     department shall provide a pharmacy benefit manager that submitted data under Subsection
303     (1)(b) or (c) with:
304          (i) a general description of the data that will be published by the department;
305          (ii) an opportunity to submit to the department, within a reasonable period of time and
306     in a manner established by the department by rule made in accordance with Title 63G, Chapter
307     3, Utah Administrative Rulemaking Act:
308          (A) any correction of errors, with supporting evidence and comments; and
309          (B) information that demonstrates that the publication of the data will violate
310     Subsection (3)(b), with supporting evidence and comments.
311          Section 5. Section 31A-46-304 is amended to read:
312          31A-46-304. Claims practices.
313          (1) A pharmacy benefit manager shall permit a pharmacy to collect the amount of a
314     customer's cost share from any source.
315          (2) A pharmacy benefit manager may not deny or reduce a reimbursement to a
316     pharmacy or a pharmacist after the adjudication of the claim, unless:
317          (a) the pharmacy or pharmacist submitted the original claim fraudulently;
318          (b) the original reimbursement was incorrect because:
319          (i) the pharmacy or pharmacist had already been paid for the pharmacy service; or
320          (ii) an unintentional error resulted in an incorrect reimbursement; or
321          (c) the pharmacy service was not rendered by the pharmacy or pharmacist.
322          (3) (a) A finding of overpayment or underpayment shall be based on the actual
323     overpayment or underpayment of a specific individual claim.
324          (b) Any amount to be charged back or recouped due to overpayment may not exceed
325     the amount the pharmacy was overpaid.
326          [(3)] (4) Subsection (2) does not apply if:
327          (a) any form of an investigation or audit of pharmacy records for fraud, waste, abuse,
328     or other intentional misrepresentation indicates that the pharmacy or pharmacist engaged in
329     criminal wrongdoing, fraud, or other intentional misrepresentation; or
330          (b) the reimbursement is reduced as the result of the reconciliation of a reimbursement
331     amount under a performance contract if:
332          (i) the performance contract lays out clear performance standards under which the
333     reimbursement for a specific drug may be increased or decreased; and
334          (ii) the agreement between the pharmacy benefit manager and the pharmacy or
335     pharmacist explicitly states, in a separate document that is signed by the pharmacy benefit
336     manager and the pharmacy or pharmacist, that the provisions of Subsection (2) do not apply.
337          Section 6. Section 31A-46-311 is enacted to read:
338          31A-46-311. Options for self-funded health benefit plans.
339          A pharmacy benefit manager shall offer to a self-funded health benefit plan, as an
340     option for the self-funded health benefit plan's design, pharmacy benefit management services
341     that:
342          (1) comply with the provisions of Subsections 31A-22-643(4) through (6), collectively
343     and individually; and
344          (2) do not include spread pricing.
345          Section 7. Section 58-17b-622 is amended to read:
346          58-17b-622. Pharmacy benefit management services -- Auditing of pharmacy
347     records -- Appeals.
348          (1) For purposes of this section:
349          (a) "Audit" means a review of the records of a pharmacy by or on behalf of an entity
350     that finances or reimburses the cost of health care services or pharmaceutical products.
351          (b) "Audit completion date" means:
352          (i) for an audit that does not require an on-site visit at the pharmacy, the date on which
353     the pharmacy, in response to the initial audit request, submits records or other documents to the
354     entity conducting the audit, as determined by:
355          (A) postmark or other evidence of the date of mailing; or
356          (B) the date of transmission if the records or other documents are transmitted
357     electronically; and
358          (ii) for an audit that requires an on-site visit at a pharmacy, the date on which the
359     auditing entity completes the on-site visit, including any follow-up visits or analysis which
360     shall be completed within 60 days after the day on which the on-site visit begins.
361          (c) "Entity" includes:
362          (i) a pharmacy benefits manager or coordinator;
363          (ii) a health benefit plan;
364          (iii) a third party administrator as defined in Section 31A-1-301;
365          (iv) a state agency; or
366          (v) a company, group, or agent that represents, or is engaged by, one of the entities
367     described in Subsections (1)(c)(i) through (iv).
368          (d) "Extrapolation" means a method of using a mathematical formula that uses the
369     audit results from a small sample of insurance claims and projects the results over a larger
370     group of insurance claims.
371          [(d)] (e) "Fraud" means an intentional act of deception, misrepresentation, or
372     concealment in order to gain something of value.
373          [(e)] (f) "Health benefit plan" means:
374          (i) a health benefit plan as defined in Section 31A-1-301; or
375          (ii) a health, dental, medical, Medicare supplement, or conversion program offered
376     under Title 49, Chapter 20, Public Employees' Benefit and Insurance Program Act.
377          (2) (a) Except as provided in Subsection (2)(b), this section applies to:
378          (i) a contract for the audit of a pharmacy entered into, amended, or renewed on or after
379     July 1, 2012; and
380          (ii) an entity that conducts an audit of the pharmacy records of a pharmacy licensed
381     under this chapter.
382          (b) This section does not apply to an audit of pharmacy records:
383          (i) for a federally funded prescription drug program, including:
384          (A) the state Medicaid program;
385          (B) the Medicare Part D program;
386          (C) a Department of Defense prescription drug program; and
387          (D) a Veterans Affairs prescription drug program; or
388          (ii) when fraud or other intentional and willful misrepresentation is alleged and the
389     pharmacy audit entity has evidence that the pharmacy's actions reasonably indicate fraud or
390     intentional and willful misrepresentation.
391          (3) (a) An audit that involves clinical or professional judgment shall be conducted by
392     or in consultation with a pharmacist who is employed by or working with the auditing entity
393     and who is licensed in the state or another state.
394          (b) If an audit is conducted on site at a pharmacy, the entity conducting the audit:
395          (i) shall give the pharmacy 10 days advanced written notice of:
396          (A) the audit; and
397          (B) the range of prescription numbers or a date range included in the audit; and
398          (ii) may not audit a pharmacy during the first five business days of the month, unless
399     the pharmacy agrees to the timing of the audit.
400          (c) An entity may not audit claims:
401          (i) submitted more than 18 months prior to the audit, unless:
402          (A) required by federal law; or
403          (B) the originating prescription is dated in the preceding six months; or
404          (ii) that exceed 200 selected prescription claims annually.
405          (d) Subsection (3)(c)(ii) does not apply to any investigative audit that involves fraud,
406     waste, abuse, or willful misrepresentation.
407          (4) (a) An entity may not:
408          (i) include dispensing fees in the calculations of overpayments unless the prescription
409     is considered a misfill;
410          (ii) recoup funds for prescription clerical or recordkeeping errors, including
411     typographical errors, scrivener's errors, and computer errors on a required document or record
412     unless the audit entity is alleging fraud or other intentional or willful misrepresentation and the
413     audit entity has evidence that the pharmacy's actions reasonably indicate fraud or intentional
414     and willful misrepresentation;
415          (iii) recoup funds for refills dispensed in accordance with Section 58-17b-608.1, unless
416     the health benefit plan does not cover the prescription drug dispensed by the pharmacy;
417          (iv) collect any funds, charge-backs, or penalties until the audit and all appeals are
418     final, unless the audit entity is alleging fraud or other intentional or willful misrepresentation
419     and the audit entity has evidence that the pharmacy's actions reasonably indicate fraud or
420     intentional and willful misrepresentation; or
421          (v) recoup funds or collect any funds, charge-backs, or penalties from a pharmacy in
422     response to a request for audit unless the pharmacy confirms to the entity the date on which the
423     pharmacy received the request for audit.
424          (b) Auditors shall only have access to previous audit reports on a particular pharmacy
425     if the previous audit was conducted by the same entity except as required for compliance with
426     state or federal law.
427          (5) A pharmacy subject to an audit:
428          (a) may use one or more of the following to validate a claim for a prescription, refill, or
429     change in a prescription:
430          (i) electronic or physical copies of records of a health care facility, or a health care
431     provider with prescribing authority;
432          (ii) any prescription that complies with state law;
433          (iii) the pharmacy's own physical or electronic records; or
434          (iv) the physical or electronic records, or valid copies of the physical or electronic
435     records, of a practitioner or health care facility as defined in Section 26B-2-201; and
436          (b) may not be required to provide the following records to validate a claim for a
437     prescription, refill, or change in a prescription:
438          (i) if the prescription was handwritten, the physical handwritten version of the
439     prescription; or
440          (ii) a note from the practitioner regarding the patient or the prescription that is not
441     otherwise required for a prescription under state or federal law.
442          (6) (a) (i) An entity that audits a pharmacy shall establish:
443          (A) a maximum time for the pharmacy to submit records or other documents to the
444     entity following receipt of an audit request for records or documents; and
445          (B) a maximum time for the entity to provide the pharmacy with a preliminary audit
446     report following submission of records under Subsection (6)(a)(i)(A).
447          (ii) The time limits established under Subsections (6)(a)(i)(A) and (B):
448          (A) shall be identical; and
449          (B) may not be less than seven days or more than 60 days.
450          (iii) An entity that audits a pharmacy may not, after the audit completion date, request
451     additional records or other documents from the pharmacy to complete the preliminary audit
452     report described in Subsection (6)(b).
453          (b) An entity that audits a pharmacy shall provide the pharmacy with a preliminary
454     audit report[,] :
455          (i) delivered to the pharmacy or its corporate office of record, within the time limit
456     established under Subsection (6)(a)(i)(B)[.] ; and
457          (ii) that includes a notation for each suspected error.
458          (c) (i) Except as provided in Subsection (6)(c)(ii), a pharmacy has 30 days following
459     receipt of the preliminary audit report to respond to questions, provide additional
460     documentation, and comment on and clarify findings of the audit.
461          (ii) An entity may grant a reasonable extension under Subsection (6)(c)(i) upon request
462     by the pharmacy.
463          (iii) Receipt of the report under Subsection (6)(c)(i) shall be determined by:
464          (A) postmark or other evidence of the date of mailing; or
465          (B) the date of transmission if the report is transmitted electronically.
466          (iv) If a dispute exists between the records of the auditing entity and the pharmacy, the
467     records maintained by the pharmacy shall be presumed valid for the purpose of the audit.
468          (7) If an audit results in the dispute or denial of a claim, the entity conducting the audit
469     shall allow any of the following:
470          (a) the pharmacy to resubmit a claim using any commercially reasonable method,
471     including fax, mail, or electronic claims submission [provided that the period of time when a
472     claim may be resubmitted has not expired under the rules of the plan sponsor; and] within 30
473     days from the day on which the audit report is received by the pharmacy; or
474          (b) the health benefit plan or other entity that finances or reimburses the cost of health
475     care services or pharmaceutical products to rerun the claim if the health benefit plan or other
476     entity chooses to rerun the claim at no cost to the pharmacy.
477          (8) (a) Within 60 days after the completion of the appeals process under Subsection
478     (9), a final audit report shall be delivered to the pharmacy or its corporate office of record.
479          (b) The final audit report shall include:
480          (i) a disclosure of any money recovered by the entity that conducted the audit[.] ; and
481          (ii) legal or contractual information supporting any money recovered, recoupments, or
482     penalties included in the report.
483          (9) (a) An entity that audits a pharmacy shall establish a written appeals process for
484     appealing a preliminary audit report and a final audit report, and shall provide the pharmacy
485     with notice of the written appeals process.
486          (b) If the pharmacy benefit manager's contract or provider manual contains the
487     information required by this Subsection (9), the requirement for notice is met.
488          (10) An auditing entity conducting a pharmacy audit may not:
489          (a) use extrapolation when conducting an audit, including calculating recoupments or
490     penalties for audits, unless otherwise required by federal law or a self-funded health benefit
491     plan; or
492          (b) compensate an employee or contractor participating in the audit in a manner that is
493     based on the amount claimed or the actual amount recouped from the pharmacy being audited.
494          Section 8. Repealer.
495          This bill repeals:
496          Section 31A-46-101, Title.
497          Section 9. Intent language for the Public Employees' Benefit and Insurance
498     Program.
499          The Legislature intends that in order for the state employee health plan to comply with
500     Subsections 31A-22-643(4) through (6), the Public Employee's Benefit and Insurance Program
501     shall:
502          (1) implement a plan design that uses a combination of the methods described in
503     Subsections 31A-22-643(4)(a)(i) and (iv); and
504          (2) alter other aspects of plan design, employee premium share, or employer health
505     savings account contribution to ensure cost neutrality to the state.
506          Section 10. Effective date.
507          This bill takes effect on January 1, 2025.