Restricts audits of pharmacists conducted by insurers and their intermediaries, limiting audits to one per year unless an identified problem exists or fraud or misrepresentation is suspected.
H5248 amends Rhode Island’s pharmacy audit law to place tighter limits on audits conducted by insurers, pharmacy benefit managers, and their intermediaries. The bill requires audits to be based on actual overpayments or underpayments rather than extrapolated projections, bars extrapolation unless required by law, requires pharmacist involvement when clinical judgment is involved, and creates or reinforces an appeal process for pharmacies to challenge preliminary findings. It also sets notice and timing rules for audits, including 14 days’ advance written notice, limits on the number of prescription claims and signature logs reviewed, deadlines for preliminary and final audit reports, and a cap on the audit period covered.
The bill further restricts how often a pharmacy may be subjected to on-site audits, generally limiting them to one per 12 months per carrier unless there is an identified problem or suspected fraud, waste, abuse, or intentional misconduct. It also provides that clerical, typographical, scrivener’s, or computer errors in Medicaid-related records do not by themselves constitute willful violations or trigger criminal penalties without proof of fraudulent intent. The Rhode Island health insurance commissioner is given enforcement authority over compliance with these audit rules, and the act takes effect upon passage.
The bill would amend Rhode Island General Laws chapter 5-19.1 governing pharmacies and would directly regulate audit practices used by carriers, pharmacy benefit managers, and their contractors. It would constrain recoupment methods, audit frequency, audit scope, and timing, while preserving exceptions for fraud-related investigations and for audit requirements imposed by federal law. Pharmacies would gain stronger procedural protections, and insurers/intermediaries would face new compliance obligations and enforcement oversight by the health insurance commissioner.
The available voting history shows strong, unanimous support for the bill at every recorded stage: 13-0 in House Corporations on the substitute amendment, 69-0 on House passage, and 35-0 on passage in concurrence. That pattern suggests broad bipartisan agreement that pharmacy audits should be more limited and procedurally fair. No committee transcript is available, so the record does not show detailed debate, but the votes indicate little or no opposition in the legislature.
The main policy tension in the bill is between protecting pharmacies from burdensome or speculative audits and preserving insurers’ and regulators’ ability to investigate fraud, abuse, and improper billing. Supporters appear to favor clearer audit limits, deadlines, and appeal rights for pharmacies, while the bill preserves exceptions for suspected fraud or intentional misconduct to address concerns about over-restricting legitimate investigations. Another potential point of contention is the prohibition on extrapolation and limits on audit frequency, which may be viewed by carriers and pharmacy benefit managers as reducing their ability to recover overpayments efficiently.