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SB 3258

AN ACT RELATING TO BUSINESSES AND PROFESSIONS -- PHARMACIES

2026 Regular Session Introduced by Pete Appollonio and 9 co-sponsors

Strengthens pharmacy audit rules to require clinical input, clear notice and timelines, fair dispute rights, and limits improper recoupments in Rhode Island.

05/21/2026 Committee recommended measure be held for further study
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Bill Summary · SB 3258

Summary of SB 3258 (Rhode Island, 2026)

Title

AN ACT RELATING TO BUSINESSES AND PROFESSIONS -- PHARMACIES

Purpose and Intent

This act strengthens and clarifies the enforcement framework for Rhode Island’s pharmacy audit law. It aims to ensure audits of pharmacy records conducted by carriers or their intermediaries are fair, transparent, and conducted with appropriate clinical input, while establishing clearer timelines, appeal rights, and penalties for noncompliance.

Key Provisions and Changes

Audit Standards and Process

  • Define “Audit” and “Auditor” to cover systematic reviews of provider claims, documentation, and billing practices.
  • On-site audits must avoid improper extrapolation and require actual determinations of overpayments/underpayments, unless a settlement explicitly includes projections.
  • Appeals process: Each auditing entity must provide an avenue for pharmacies to appeal unfavorable preliminary audit findings.

Clinical Oversight and Scope

  • Any audit involving clinical judgments must involve a pharmacist or consult with one.
  • Auditors cannot rely solely on generic projections; they must base findings on actual, specific review where possible.

Notice, Sampling, and Documentation

  • Prior notice: Pharmacies must receive 14 days’ written notice before an audit, including the range of prescription numbers involved. Some identifying details may be masked (e.g., last two digits of prescription numbers; total claims limited to 150 claims and related refills; signature logs capped at 25).
  • Prescription records: Scanned images of prescriptions, including all scheduled controlled substances, may be used; verbally received prescriptions can be validated for initial audit tasks.
  • Timeframe: The audit period cannot exceed two years.

Dispute Resolution and Post-Audit Actions

  • Pharmacies retain contract-based dispute resolution rights.
  • Preliminary audit reports must be issued within 60 days after audit conclusion; pharmacies have 30 days to respond with documentation.
  • Final audit reports are due within 90 days after the preliminary report or after any final appeal, whichever is later.
  • Penalties (e.g., charge-back recoupments) may not be imposed until the pharmacy benefits manager appeal process is exhausted and the final report is issued.
  • If a single audit discrepancy exceeds $25,000, future payments exceeding that amount may be withheld pending appeal adjudication.
  • Auditors’ access to prior audits is limited to audits of the same pharmacy/entity.

Audit Scope and Exceptions

  • Certain investigations (fraud, abuse, or willful misrepresentation) are exempt from these audit protections.
  • If an exception applies, audits must be strictly limited in scope to issues directly tied to the initial suspicions, with written basis provided to the Attorney General upon request.
  • Audits cannot be based solely on ownership/common control without confirming a specific systemic issue.
  • Frequency: A pharmacy cannot be subject to more than one on-site carrier audit per year unless there is a substantiated issue or fraud suspicion.
  • Federal law compliance: The act does not supersede applicable federal audit requirements.
  • Attorney General involvement: Auditors must provide written notice to the Attorney General at least 3 business days before commencing an audit under an applicable exception.

Enforcement

  • The Rhode Island Attorney General is empowered to enforce compliance, seek injunctions, and impose civil penalties.
  • Civil penalties are capped at $10,000 per violation.
  • The Attorney General may promulgate rules and regulations to implement these provisions.

Who Would Be Affected

  • Pharmacies operating in Rhode Island (including corporate entities and their corporate offices).
  • Carriers and their intermediaries conducting audits of pharmacy records.
  • Pharmacy Benefit Managers (PBMs) and associated auditing entities.
  • Rhode Island Attorney General (enforcement and rulemaking role).
  • Patients indirectly affected through protections against improper recoupments and more transparent audit processes.

Procedural and Timeline Aspects

  • Effective Date: The act takes effect upon passage.
  • Audit initiation and notice: 14 days advance written notice required; sampling and documentation limits apply.
  • Reporting timelines: Preliminary report within 60 days post-audit; final report within 90 days after preliminary report or after final appeal.
  • Dispute window: Pharmacies have at least 30 days to respond to preliminary findings.
  • Withholding of funds: Possible withholding of payments above $25,000 during appeal.
  • Appeals: Pharmacies can use contract-based dispute resolution; final outcomes determine any recoupments.
  • Exceptions and oversight: Strictly limited scope for investigative audits, with AG notification and written justification.

Overall Impact

SB 3258 is designed to balance the integrity of payer audits with the rights and capabilities of pharmacies to contest findings. By tightening procedures, requiring clinical input, clarifying notice and sampling limits, and strengthening enforcement and timelines, the bill aims to reduce improper recoupments, enhance transparency, and provide due process in pharmacy audits.

Compiled from official sources — confirm details with the bill’s official record.

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