,,ii #aacth ,,congress #ast ,session ,s4 #hfg ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #f1 #bjac ,mr4 ,pryor 7for himself1 ,mr4 ,moran1 ,mr4 ,wicker1 and ,mr4 ,boozman7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend title ,,xviii of the ,social ,security ,act to provide for pharmacy benefits manager standards under the ,medicare prescription drug program1 to establish basic audit standards of pharmacies1 to further transparency of payment methodology to pharmacies1 and to provide for recoupment returns to ,medicare4 #a4 ,short title ,this ,act may be cited as the ,medicare ,prescription ,drug ,program ,integrity and ,transparency ,act of #bjac4 #b4 ,pharmacy benefits manager standards under the ,medicare program 7a7 ,in general ,section #ahfj;,d-#ab7;b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aab7;b77 is amended by adding at the end the following new paragraphs3 7#g7 ,pharmacy benefits manager transparency and proper operations requirements 7,a7 ,in general ,each contract entered into with a ,,pdp sponsor under this part with respect to a prescription drug plan offered by such sponsor shall provide that the ,,pdp may not enter into a contract with any pharmacy benefits manager 7referred to in this paragraph as a ,,pbm7 to manage the prescription drug coverage provided under such plan1 or to control the costs of the prescription drug coverage under such plan1 unless the ,,pbm satisfies the requirements described in subparagraph 7,b74 7,b7 ,requirements ,the requirements described in this subparagraph are as follows3 7i7 ,proper audit procedures ,the following shall apply to each audit of a pharmacy conducted by or for the pharmacy benefits manager with respect to such prescription drug plan3 7,i7 ,assuring recoveries to ,medicare 7aa7 ,the ,,pbm 7or auditing entity7 shall disclose the amount of each payment recovered pursuant to the audit to the ,,pdp sponsor with a copy to the pharmacy4 7bb7 ,any payment recovered by the ,,pbm 7or auditing entity7 pursuant to the audit shall be returned to the ,,pdp sponsor4 7,,ii7 ,assuring clinical decisions in audits 7aa7 ,in the case the audit involves clinical or professional judgment1 the audit shall be conducted by1 or in consultation with1 a pharmacist licensed in the ,state of the audit or the ,state board of pharmacy4 7bb7 ,the pharmacy1 practice site1 or other entity may use a nursing home's medication administration record 7,,mar71 the records of a hospital1 physician1 rehabilitation facility1 ,state-licensed healthcare facility1 or other authorized practitioner to validate the pharmacy records and any legal prescription 7one that complies with ,state ,board of ,pharmacy requirements7 may be used to validate claims submitted by the pharmacy in connection with prescriptions1 refills1 proof of delivery1 or changes in prescriptions during any phase of the audit1 including appeal4 7,,iii7 ,assuring proper procedures 7aa7 ,the ,,pbm 7or auditing entity7 may not apply recordkeeping or other requirements on the pharmacy that are more stringent than such requirements applied under ,federal law or the ,state law involved4 7bb7 ,the ,,pbm 7or auditing entity7 shall accept all pharmacy prescription records related to the audit in an electronic format or other digital media4 7cc7 ,the ,,pbm 7or auditing entity7 may not1 pursuant to the audit1 disallow the entire payment with respect to a claim submitted by the pharmacy because of a clerical or recordkeeping error 7such as a typographical error1 scrivener's error1 or computer error7 if there is an absence of intent to commit fraud1 as defined in section #acdg of title #ah1 ,united ,states ,code4 ,in the case of errors that have no financial harm to the patient or plan1 the ,,pbm shall not assess any chargebacks4 7dd7 ,the ,,pbm 7or auditing entity7 may not use extrapolation or other statistical expansion techniques in calculating any recoupment or penalty pursuant to the audit4 7ee7 ,the period covered by the audit may not exceed #b years from the date the claim involved was submitted to1 or adjusted by1 the ,,pbm 7or auditing entity74 7ff7 ,the ,,pbm 7or auditing entity7 shall have in place a written appeals process that affords the pharmacy a minimum of #fj days to respond to the auditor findings1 shall include procedures for appeals from preliminary reports and final reports related to such audit1 and shall permit the pharmacy to introduce any documentation which would validate a claim contested in the audit until the final written decision is issued on appeal4 7ii7 ,business practice predictability ,a ,,pbm shall provide a particular aggregate average reimbursement rate for generics or a maximum average discount off of an accepted pharmaceutical pricing benchmark for multi-source generics as a whole 7often referred to as a generic effective rate7 and provide a process for the generic effective rate to be appealed4 ,for the purposes of this rate or benchmark amount1 the ,,pbm shall utilize a pharmaceutical pricing benchmark published by a nationally available compendium4 ,the aggregate average reimbursement rate for generics 7generic effective rate7 shall be calculated using the actual amount paid to the pharmacy 7typically the amount of reimbursement to the ,,pbm plus the patient co-pay71 excluding the dispensing fee1 shall not be calculated solely according to the amount allowed by the plan1 and shall include all generics dispensed1 regardless of whether they are subject to ,,mac pricing4 7iii7 ,protecting patient and claims related data ,a ,,pbm shall adhere to the following criteria when handling personally identifiable utilization and claims data or other sensitive patient data3 7,i7 ,a ,,pbm may not transmit any personally identifiable utilization or claims data to a pharmacy owned by a ,,pbm if the plan enrollee has not voluntarily elected in writing or via secure electronic means to fill that particular prescription at the ,,pbm-owned pharmacy4 7,,ii7 ,a ,,pbm may not require that a plan enrollee use a retail pharmacy1 mail order pharmacy1 specialty pharmacy1 or other pharmacy entity providing pharmacy services in which the ,,pbm has an ownership interest or that has an ownership interest in the ,,pbm or provide an incentive to a beneficiary to encourage the individual to use a retail pharmacy1 mail order pharmacy1 specialty pharmacy1 or other pharmacy entity providing pharmacy services in which the ,,pbm has an ownership interest or that has an ownership interest in the ,,pbm1 if the incentive is applicable only to such pharmacies4 4 7b7 ,disclosure and regular update of prescription drug reimbursement ,section #ahfj;,d-#ab7;b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aab7;b77 is amended to read as follows3 7#f7 ,disclosure and regular update of prescription drug reimbursement ,each contract entered into with a ,,pdp sponsor under this part with respect to a prescription drug plan offered by such sponsor shall provide that the sponsor or subcontractor of such sponsor shall-- 7,a7 disclose to a pharmacy1 at the time when a contract is offered1 the methodology and actual per unit reimbursement amount for each covered drug for each such pharmacy2 and 7,b7 not less frequently than once every #g days1 beginning with an initial update on ,january #a of each year-- 7i7 update such reimbursement amount to accurately reflect the market price of acquiring the drug2 and 7ii7 disclose to each contracted pharmacy such methodology and reimbursement amounts4 4 7c7 ,effective date ,the amendments made by this section shall apply to plan years beginning on or after ,january #a1 #bjae4