Duty to prosecute violations

(a) It shall be the duty of the prosecuting attorney of the court of competent jurisdiction to whom the board or some other person shall report a violation of this chapter to cause appropriate proceedings to be commenced and prosecuted for the enforcement of the penalties as in such case may be provided. (b) The board, or any person, corporation, or association, in addition to the remedies set forth in this chapter, may bring an action in a court having competent jurisdiction over the parties and subject matter to enjoin violations of this chapter. Such injunction may issue notwithstanding the existence of an adequate remedy at law. 570 26-4-118 History. Code 1981, § 26-4-117, enacted by Ga. L. 1998, p. 686, § 1. 26-4-118. Pharmacy Audit Bill of Rights; recoupment of disputed funds; appeals process for unfavorable reports; final audit report; investigative audits based on criminal offenses. (a) This Code section shall be known and may be cited as “The Pharmacy Audit Bill of Rights.” (b) Notwithstanding any other law, when an audit of the records of a pharmacy is conducted by a managed care company, insurance company, third-party payor, pharmacy benefits manager, any entity licensed by the Department of Insurance, or any entity that represents such companies, groups, or department, it shall be conducted in accordance with the following bill of rights: (1) The entity conducting the audit must give the pharmacy notice at least 14 days prior to conducting the audit for each audit cycle and include in such notice a comprehensive list of claims by prescription number to be audited, although the final two digits may be omitted, and the cost of such claims shall not be used as a criterion in determining which claims to audit. The audit shall not include more than 100 prescriptions per audit and an entity shall not audit more than 200 prescriptions in any 12 month period, provided that a refill shall not constitute a separate prescription; (2) Any audit which involves clinical or professional judgment must be conducted by or in consultation with a pharmacist; (3) Any clerical or record-keeping error, including but not limited to a typographical error, scrivener’s error, computer error, or omission error, regarding a prescription, front or back label, or other document or record shall not in and of itself constitute fraud. No such claim shall be subject to criminal penalties without proof of intent to commit fraud. No recoupment of the cost of drugs or medicinal supplies properly dispensed shall be allowed if such error has occurred; provided, however, that recoupment shall be allowed to the extent that such error resulted in an overpayment, though recoupment shall be limited to the amount overpaid; (4) A pharmacy shall be allowed at least 60 days following the receipt of the preliminary audit report in which to correct any error or to address any discrepancy found during an audit which may be subject to recoupment for overpayment as provided for in paragraph (12) of this subsection, including to secure and remit an appropriate copy of the record from a hospital, physician, or other authorized 571 26-4-118 FOOD, DRUGS, AND COSMETICS 26-4-118 practitioner of the healing arts for drugs or medicinal supplies written or transmitted by any means of communication if the lack of such a record or an error in such a record is identified in the course of an audit or noticed within the preliminary audit report; (5) A pharmacy may use the records of a hospital, physician, or other authorized practitioner of the healing arts for drugs or medicinal supplies written or transmitted by any means of communication for purposes of validating the pharmacy record with respect to orders or refills of a legend or narcotic drug; (6) A finding of an overpayment or underpayment may be a projection based on the number of patients served having a similar diagnosis or on the number of similar orders or refills for similar drugs; however, recoupment of claims must be based on the actual overpayment or underpayment unless the projection for overpayment or underpayment is part of a settlement as agreed to by the pharmacy; (7) Each pharmacy shall be audited under the same standards and parameters as other similarly situated pharmacies audited by the entity; (8) The period covered by an audit may not exceed two years from the date the claim was submitted to or adjudicated by a managed care company, insurance company, third-party payor, pharmacy benefits manager, any entity licensed by the Department of Insurance, or any entity that represents such companies, groups, or department; (9) An audit may not be initiated or scheduled during the first seven calendar days of any month due to the high volume of prescriptions filled during that time unless otherwise consented to by the pharmacy; (10) The preliminary audit report must be delivered to the pharmacy within 30 days after conclusion of the audit. A final audit report shall be delivered to the pharmacy within 60 days after receipt of the preliminary audit report or final appeal, as provided for in subsection (c) of this Code section, whichever is later; (11) A pharmacy shall not be held responsible for any penalty or fee in connection with an audit and there shall be no recoupment of funds from a pharmacy in connection with claims for which the pharmacy has already been paid without first complying with the requirements set forth in this Code section; (12) There shall be no recoupment from a pharmacy except in cases of: (A) Fraud; 572 26-4-118 (B) An error that resulted in an overpayment provided that recoupment shall be limited to the amount overpaid; or (C) A misfill; provided, however, that when a patient receives the correct drug in the correct dosage and quantity pursuant to a prescription drug order then no misfill shall be found to have occurred; and (13) A pharmacy shall not be audited more than once every six months. Notwithstanding any other provision in this subsection, the agency conducting the audit shall not use the accounting practice of extrapolation in calculating recoupments or penalties for audits. (c) Recoupments of any disputed funds shall only occur after final internal disposition of the audit, including the appeals process as set forth in subsection (d) of this Code section. (d) Each entity conducting an audit shall establish an internal appeals process under which a pharmacy shall have at least 30 days from the delivery of the preliminary audit report to appeal an unfavorable preliminary audit report to the entity. If, following the appeal, the entity finds that an unfavorable audit report or any portion thereof is unsubstantiated, the entity shall dismiss the audit report or such portion without the necessity of any further proceedings. (e) Each entity conducting an audit shall provide a copy of the final audit report, after completion of any review process, to the plan sponsor at its request or in an alternate format. (f) This Code section shall not apply to any investigative audit commenced based upon an articulable suspicion of fraud, willful misrepresentation, or abuse, including without limitation investigative audits under Article 7 of Chapter 4 of Title 49, Code Section 33-1-16, or any other statutory provision which authorizes investigations relating to insurance fraud. (g) The provisions of this Code section shall not apply to the Department of Community Health conducting audits under Article 7 of Chapter 4 of Title 49; provided, however, that the provisions of Code Section 49-4-151.1 shall apply to such audits conducted by the Department of Community Health under Article 7 of Chapter 4 of Title 49. (h) The entity conducting the audit may not pay the agent or employee who is conducting the audit based on a percentage of the amount recovered. (i) The Commissioner of Insurance shall have enforcement authority over this Code section and shall promulgate rules and regulations to effectuate the provisions of this Code section. The Commissioner of 573 26-4-118 FOOD, DRUGS, AND COSMETICS 26-4-119 Insurance shall have the authority to investigate complaints of alleged violations of this Code section; to prohibit recoupment; to order reimbursement of any wrongful recoupment; to institute fines for violations of the law, rules, or regulations; and to take any other actions pursuant to any authority granted pursuant to Chapter 64 of Title 33, relating to the regulation and licensure of pharmacy benefits managers. History. Code 1981, § 26-4-118, enacted by Ga. L. 2006, p. 198, § 1/HB 1371; Ga. L. 2009, p. 8, § 26/SB 46; Ga. L. 2013, p. 615, § 1/HB 179; Ga. L. 2015, p. 337, § 1/HB 470; Ga. L. 2016, p. 864, § 26/HB 737; Ga. L. 2017, p. 219, § 1/HB 206; Ga. L. 2020, p. 654, § 2/HB 918. The 2020 amendment, effective January 1, 2021, rewrote subsection (b); substituted “commenced based upon an articulable suspicion of” for “which involves” near the beginning of subsection (f); deleted “paragraph (3) of subsection (b) of” preceding “this Code section” at the beginning of subsection (g); and substituted the present provisions of subsection (i) for the former provisions, which read: “The Commissioner of Insurance shall have enforcement authority over this Code section and shall have the authority granted pursuant to Chapter 64 of Title 33, relating to the regulation and licensure of pharmacy benefits managers.” 26-4-119. Pharmacy anti-steering and transparency; prohibited activities. (a) This Code section shall be known and may be cited as the “Pharmacy Anti-Steering and Transparency Act.” (b) The General Assembly finds that: (1) The referral of a patient to a pharmacy by an affiliate for pharmacy care represents a potential conflict of interest; and (2) These referral practices may limit or eliminate competitive alternatives in the health care services market, may result in overutilization of health care services, may increase costs to the health care system, may adversely affect the quality of health care, may disproportionately harm patients in rural and medically underserved areas of Georgia, and shall be against the public policy of this state. (c) As used in this Code section, the term: (1) “Affiliate” means a person licensed under Title 33 which, either directly or indirectly through one or more intermediaries: (A) Has an investment or ownership interest in a pharmacy licensed in or holding a nonresident pharmacy permit in Georgia; (B) Shares common ownership with a pharmacy licensed in or holding a nonresident pharmacy permit in Georgia; or (C) Has as an investor or ownership interest holder a pharmacy licensed in or holding a nonresident pharmacy permit in Georgia. 574 26-4-119 (2) “Referral” means: (A) Ordering of a patient to a pharmacy by an affiliate either orally or in writing, including online messaging; (B) Ordering of a patient to a pharmacy that has an affiliate either orally or in writing, including online messaging by a person licensed under Title 33 as a result of an arrangement or agreement between the person and the pharmacy’s affiliate; (C) Offering or implementing plan designs that require patients to utilize affiliated pharmacies or other pharmacies with affiliates, or that increase plan or patient costs, including requiring patients to pay the full cost for a prescription when patients choose not to use affiliated pharmacies or other pharmacies with affiliates; or (D) Patient or prospective patient specific advertising, marketing, or promotion of a pharmacy by an affiliate or other person licensed under Title 33 as a result of an arrangement or agreement with the pharmacy’s affiliate. Subject to the foregoing, this term shall not include a pharmacy’s inclusion by an affiliate or other person licensed under Title 33 as a result of an arrangement or agreement with the pharmacy’s affiliate in communications to patients, including patient and prospective patient specific communications, regarding network pharmacies and prices, provided that the affiliate or other person licensed under Title 33 includes information regarding eligible nonaffiliate pharmacies in such communications and the information provided is accurate. (d) A pharmacy licensed in or holding a nonresident pharmacy permit in Georgia shall be proscribed from: (1) Transferring or sharing records relative to prescription information containing patient identifiable and prescriber identifiable data to or from an affiliate for any commercial purpose; provided, however, that nothing shall be construed to prohibit the exchange of prescription information between a pharmacy and its affiliate for the limited purposes of pharmacy reimbursement; formulary compliance; pharmacy care; public health activities otherwise authorized by law; or utilization review by a health care provider; or (2) Presenting a claim for payment to any individual, third-party payor, affiliate, or other entity for a service furnished pursuant to a referral from an affiliate or other person licensed under Title 33. (e) This Code section shall not be construed to prohibit a pharmacy from entering into an agreement with an affiliate to provide pharmacy 575 26-4-119 FOOD, DRUGS, AND COSMETICS 26-4-119 care to patients, provided that the pharmacy does not receive referrals in violation of subsection (d) of this Code section and the pharmacy provides the disclosures required in subsection (f) of this Code section. (f) If a pharmacy licensed or holding a nonresident pharmacy permit in this state has an affiliate, it shall annually file with the board a disclosure statement identifying all such affiliates. (g) In addition to any other remedy provided by law, a violation of this Code section by a pharmacy shall be grounds for disciplinary action by the board pursuant to its authority granted in this chapter. (h) A pharmacist who fills a prescription that violates subsection (d) of this Code section shall not be liable under this Code section. (i) This Code section shall not apply to: (1) Any licensed group model health maintenance organization with an exclusive medical group contract which operates its own pharmacies which are licensed under Code Section 26-4-110; (2) Any hospital or related institution; or (3) Any referrals by an affiliate for pharmacy services and prescriptions to patients in skilled nursing facilities, intermediate care facilities, continuing care retirement communities, home health agencies, or hospices. History. Code 1981, § 26-4-119, enacted by Ga. L. 2019, p. 943, § 1/HB 233; Ga. L. 2020, p. 654, § 3/HB 918. The 2020 amendment, effective January 1, 2021, rewrote subsection (c), which read: “As used in this Code section, the term: “(1) ‘Affiliate’ means a person licensed under Title 33 which, either directly or indirectly through one or more intermediaries: “(A) Has an investment or ownership interest in a pharmacy licensed in or holding a nonresident pharmacy permit in Georgia; “(B) Shares common ownership with a pharmacy licensed in or holding a nonresident pharmacy permit in Georgia; or “(C) Has as an investor or ownership interest holder a pharmacy licensed in or holding a nonresident pharmacy permit in Georgia. “(2) ‘Referral’ means: “(A) Ordering of a patient to a pharmacy by an affiliate either orally or in writing, including online messaging; “(B) Offering or implementing plan designs that require patients to utilize affiliated pharmacies; or “(C) Patient or prospective patient specific advertising, marketing, or promotion of a pharmacy by an affiliate. “Subject to the foregoing, this term shall not include a pharmacy’s inclusion by an affiliate in communications to patients, including patient and prospective patient specific communications, regarding network pharmacies and prices, provided that the affiliate includes information regarding eligible nonaffiliate pharmacies in such communications and the information provided is accurate.”; rewrote paragraph (d)(2), which read: “Presenting a claim for payment to any individual, third-party payor, affiliate, or other entity for a service furnished pursuant to a referral from an affiliate; provided, however, that this shall not apply to referrals from an affiliate for limited distribution pre- 576 scription drugs requiring special handling and not commonly carried at retail pharmacies or oncology clinics or practices.”; and rewrote subsection (i), which read: “This Code section shall not apply to: “(A) Any licensed group model health maintenance organization with an exclusive medical group contract which operates its own pharmacies licensed under Code Section 26-4-110.1; “(B) Any hospital or related institution; “(C) Any referrals by an affiliate for pharmacy services and prescriptions to patients in skilled nursing facilities, inter- 26-4-130 mediate care facilities, continuing care retirement communities, home health agencies, or hospices; or “(D) Any care management organization, as defined in Chapter 21A of Title 33.”