Barrar Pharmacy Audit Integrity Act Clears House Health Committee
6/24/2011

The House Health Committee has reported legislation authored by Rep. Stephen E. Barrar (R-Chester/Delaware) that would establish fair and uniform procedures for auditing pharmacies. 

“Currently, there are no oversight or procedural requirements in place for pharmacy audits by insurance companies, managed care companies and other organizations,” said Barrar.  “This legislation would create a standardized audit process and a means by which pharmacies could appeal.  At this time pharmacies can be penalized for documentation errors which are not consistent with fraud, but there is no specific procedure for appeals.  My legislation is about ensuring pharmacies are fairly treated when audited.” 

House Bill 727 would require entities conducting audits to conform to a specific set of rules and procedures, including providing the pharmacy with written notice at least two weeks prior to conducting the audit.  Under the audit rules and procedures, clerical, recordkeeping or typographical errors do not constitute fraud and cannot be subject to recoupment or criminal penalties.  Also, audits may not exceed 18 months from the date the claim was submitted or adjudicated.  The bill would obligate auditing entities to provide the pharmacy with a written report and allow for 60 days following the receipt of the report for pharmacies to produce necessary documentation and address any discrepancies.  Additionally, it would prohibit the accounting practice of “extrapolation,” which is like sample auditing. 

Barrar noted he has been pursuing this measure for several years because he fears there could be cases of organizations auditing pharmacies to enhance their own financial standing. 

The Pennsylvania Pharmacists Association supports the legislation, which will now go before the full House for consideration. 

More information about Barrar and his legislative priorities is available at SteveBarrar.com or Facebook.com/RepBarrar

State Representative Steve Barrar
160th District, Pennsylvania House of Representatives

Contact:  Nicole Wamsley
nwamsley@pahousegop.com        
717.783.8063

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