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HomeBusiness and Professions CodeDiv. 2Ch. 9.5§ 4433 Pharmacy Audit Payment Restrictions

§ 4433 Pharmacy Audit Payment Restrictions

Business and Professions Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 4433 Pharmacy Audit Payment Restrictions

Key Takeaways

  • •Auditors can't get paid based on how much money they take back from a pharmacy.
  • •If there's a small mistake in records, the pharmacy doesn't have to pay money back unless the mistake caused real money loss.
  • •If an auditor is paid based on money taken back, it must be clearly written in a contract with the plan sponsor.
  • •No one doing the audit can get a bonus or extra money for taking back more money from the pharmacy.

Example

A pharmacy makes a typo in a record, like writing $10 instead of $1. The auditor finds it.

The pharmacy doesn’t have to pay back the $9 difference unless the typo actually caused someone to lose money.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 4433 Pharmacy Audit Payment Restrictions

(a) An entity conducting a pharmacy audit shall not receive payment or any other consideration on any basis that is tied to the amount claimed or actual amount recovered from the pharmacy that is the subject of the audit. Nothing in this subdivision shall be construed to prevent the pharmacy benefit manager or health benefit plan from charging or assessing the plan sponsor, directly or indirectly, based on amounts recouped if both of the following conditions are met: (1) The plan sponsor and the pharmacy benefit manager or health benefit plan have a contract that explicitly states the percentage charge or assessment to the plan sponsor. (2) No commission or financial incentive is paid to an agent or employee of the entity conducting the pharmacy audit based, directly or indirectly, on amounts recouped. (b) A pharmacy shall not be subject to recoupment of funds for a clerical or recordkeeping error, unless the error resulted in actual financial harm to the pharmacy benefit manager, the carrier, or the beneficiary of a health benefit plan. (Added by Stats. 2012, Ch. 706, Sec. 1. (SB 1195) Effective January 1, 2013.)

Last verified: January 22, 2026

Key Terms

considerationinsurancecommissioncontractpatientclaimbenefithealth

Related Statutes

  • § 4430 Health Plan Definitions
  • § 4432 Pharmacy Contract Compliance Rules
  • § 1971 Dentally Underserved Areas Definitions
  • § 511.1 Provider Contract Discount Disclosure
  • § 4436 Pharmacy Audit Clinical Standards

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Business and Professions Code. Section 4433.
View Official Source