AN ACT TO AMEND TITLE 18 OF THE DELAWARE CODE RELATING TO OVERPAYMENT RECOVERY AND AUDIT PRACTICES.
Summary
HB212 amends Delaware insurance and pharmacy audit law to tighten the rules for recovering alleged overpayments and for conducting pharmacy benefit manager (PBM) audits. For health insurers and health plans, it shortens the deadline to begin overpayment recovery efforts from 24 months to 12 months after the original claim payment, while preserving exceptions for cases involving fraud, abuse, intentional misconduct, self-insured plans, and state or federal government plans. The bill also requires that overpayment findings be based on actual overpayments rather than projections, and it limits the use of extrapolation in calculating recoupments or penalties unless state or federal law requires it.
The bill also adds or clarifies notice and audit standards for PBMs and pharmacy audits. PBMs must provide written notice identifying the claim-processing error and explaining the basis for any recoupment or chargeback. In addition, the bill narrows when pharmacy audit protections do not apply by requiring stronger evidence of misconduct—such as physical review of claims data or other investigative methods—before an audit can be treated as an investigative audit outside the Pharmacy Audit Integrity Program. The substitute version mainly corrects a drafting issue in Section 2 and otherwise keeps the policy changes intact.
Impact
HB212 would amend Title 18 of the Delaware Code by changing the timing, evidentiary standards, and notice requirements governing insurer overpayment recovery and PBM/pharmacy audit practices. It reduces the recovery window for most health-plan overpayment efforts from 24 months to 12 months, restricts extrapolated recoupment calculations, and requires more specific documentation for PBM recoupment or chargeback actions. The bill is intended to strengthen protections for health-care providers and pharmacies while preserving enforcement tools for fraud, abuse, and other intentional misconduct.
Sentiment
The bill appears to have broad support and little visible opposition. It passed the House 40-0 and the Senate 20-0, indicating unanimous approval in both chambers. The synopsis also suggests the measure was viewed as a corrective and clarifying update to existing audit and recovery rules rather than a controversial policy shift.
Contention
The main points of contention addressed by the bill involve insurer and PBM audit practices, especially the use of extrapolation, delayed overpayment recovery efforts, and audits that may fall outside the Pharmacy Audit Integrity Program. The bill responds to concerns that PBMs may have used existing law to conduct audits beyond intended limits and that providers could face recoupments based on projections rather than actual overpayments. The legislation balances those concerns against exceptions for suspected fraud, abuse, intentional misconduct, and government-directed audits, preserving enforcement authority where stronger evidence exists.