BILL REQ. #: H-1898.1
State of Washington | 62nd Legislature | 2011 Regular Session |
READ FIRST TIME 02/17/11.
AN ACT Relating to the department of social and health services' audit program for pharmacy payments; amending RCW 74.09.200; adding a new section to chapter 74.09 RCW; and creating new sections.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 74.09.200 and 1979 ex.s. c 152 s 1 are each amended to
read as follows:
(1) The legislature finds and declares it to be in the public
interest and for the protection of the health and welfare of the
residents of the state of Washington that a proper regulatory and
inspection program be instituted in connection with the providing of
medical, dental, and other health services to recipients of public
assistance and medically indigent persons. In order to effectively
accomplish such purpose and to assure that the recipient of such
services receives such services as are paid for by the state of
Washington, the acceptance by the recipient of such services, and by
practitioners of reimbursement for performing such services, shall
authorize the secretary of the department of social and health services
or his designee, to inspect and audit all records in connection with
the providing of such services.
(2) It is the intent of the legislature that the regulatory and
inspection program authorized in this section shall include a
systematic method to gather data for program improvement.
NEW SECTION. Sec. 2 A new section is added to chapter 74.09 RCW
to read as follows:
(1) Audits under this chapter of the records of pharmacies licensed
under chapter 18.64 RCW are subject to the following:
(a) An initial audit may not commence earlier than thirty days
prior to the date on which written notice of the audit is given to the
pharmacy. The notice must be provided to the physical location at
which the audit will be conducted and to the principal office or place
of business of the pharmacy, if different, and must include the name,
office address, and telephone number of any contractor conducting the
audit pursuant to a contract with the department. Audit findings
resulting from audit work that is commenced before the thirty-day
period may not be used in any audit findings;
(b) Technical deficiencies may not be the basis for finding an
overpayment if the pharmacy can substantiate through documentation that
the claim for services complies with all of the elements of an
allowable cost, as provided in subsection (3) of this section;
(c) An audited pharmacy may use the written records of a hospital,
physician, or other authorized pharmacy to validate the audited
pharmacy's record; and
(d) The pharmacy must have at least ninety days from the date on
which the draft audit findings were delivered to the pharmacy to
respond with additional documentation or other relevant information.
Extensions of these time periods shall be granted for good cause.
(2) This section does not apply to an audit that is based on an
investigation for fraudulent or abusive practices under RCW 74.09.210.
(3) For the purposes of this section:
(a) "Technical deficiency" means a billing error or omission that
does not affect any elements of an allowable cost. "Technical
deficiency" does not include:
(i) Failure to routinely obtain prior authorization of the service
if required under this chapter or rules adopted under this chapter;
(ii) Failure to properly document expedited prior authorization
criteria; or
(iii) Fraud, a pattern of abusive billing, or noncompliance,
continuous violations, or a gross or flagrant violation.
(b) "Allowable cost" means a medical cost that is:
(i) Covered by the state plan and waivers;
(ii) Supported by the medical records indicating that the services
were provided and consistent with the medical diagnosis;
(iii) Properly coded; and
(iv) Paid at the rate allowed by the state plan.
NEW SECTION. Sec. 3 The secretary of the department of social
and health services may adopt rules as necessary to implement this act.
NEW SECTION. Sec. 4 Section 2 of this act applies retroactively
to audits commenced by the department of social and health services
under chapter 74.09 RCW on or after April 1, 2011.
NEW SECTION. Sec. 5 If any part of this act is found to be in
conflict with federal requirements that are a prescribed condition to
the allocation of federal funds to the state, the conflicting part of
this act is inoperative solely to the extent of the conflict and with
respect to the agencies directly affected, and this finding does not
affect the operation of the remainder of this act in its application to
the agencies concerned. Rules adopted under this act must meet federal
requirements that are a necessary condition to the receipt of federal
funds by the state.