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HB212 • 2025

AN ACT TO AMEND TITLE 18 OF THE DELAWARE CODE RELATING TO OVERPAYMENT RECOVERY AND AUDIT PRACTICES.

AN ACT TO AMEND TITLE 18 OF THE DELAWARE CODE RELATING TO OVERPAYMENT RECOVERY AND AUDIT PRACTICES.

Healthcare
Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor
Bush
Last action
2025-09-03
Official status
Lieu/Substituted 6/18/25
Effective date
Not listed

Plain English Breakdown

Checked against official source text during the last sync.

Changes to Health Insurance Overpayment and Audit Rules

This law shortens the time insurers have to ask for money back on claims from 24 months to 12 months, requires stronger proof before skipping standard audit rules, and mandates written notice when pharmacy benefit managers take money back.

What This Bill Does

  • Shortens the deadline for health insurers to start recovering overpayments from 24 months to 12 months after a claim is paid.
  • Requires that fraud or intentional misconduct be indicated by a physical review of data, claims data, or statements before skipping standard audit rules and deadlines.
  • Mandates that pharmacy benefit managers send written notice explaining errors and justifying any money taken back from pharmacies.
  • Aligns the rules for recovering overpayments from healthcare providers with those used for pharmacies.

Who It Names or Affects

  • Health insurers and health plans
  • Pharmacy benefit managers (PBMs)
  • Healthcare providers, including doctors and hospitals
  • Pharmacies

Terms To Know

Overpayment recovery
The process where an insurer asks a provider to return money paid by mistake.
Extrapolation
Using data from a small sample of claims to estimate errors across all similar claims, which this law limits unless required by other laws.

Limits and Unknowns

  • The official text does not list an effective date for when these changes begin.
  • This summary relies only on the provided bill text and cannot include details about specific enforcement penalties or future court interpretations.

Bill History

  1. 2025-09-03 Delaware General Assembly

    HS 1 for HB 212 - Signed by Governor

  2. 2025-06-30 Delaware General Assembly

    HS 1 for HB 212 - Passed By Senate. Votes: 21 YES

  3. 2025-06-25 Delaware General Assembly

    HS 1 for HB 212 - Reported Out of Committee (Banking, Business, Insurance & Technology) in Senate with 7 On Its Merits

  4. 2025-06-24 Delaware General Assembly

    HS 1 for HB 212 - Passed By House. Votes: 40 YES 1 VACANT

  5. 2025-06-24 Delaware General Assembly

    HS 1 for HB 212 - Assigned to Banking, Business, Insurance & Technology Committee in Senate

  6. 2025-06-18 Delaware General Assembly

    Substituted in House by HS 1 for HB 212

  7. 2025-06-17 Delaware General Assembly

    Reported Out of Committee (Economic Development/Banking/Insurance & Commerce) in House with 2 Favorable, 9 On Its Merits

  8. 2025-06-10 Delaware General Assembly

    Introduced and Assigned to Economic Development/Banking/Insurance & Commerce Committee in House

Official Summary Text

AN ACT TO AMEND TITLE 18 OF THE DELAWARE CODE RELATING TO OVERPAYMENT RECOVERY AND AUDIT PRACTICES.
Section 1 of this Act amends the time period during which health insurers may initiate overpayment recovery efforts from 24 months to 12 months of a claim being paid. This Act also amends one of the exemptions to the overpayment recovery deadline to require an indication of fraud, abuse, or other intentional misconduct based on a physical review or review of claims data or statements as opposed to merely having a reasonable belief of such fraud, abuse or other intentional misconduct. It aligns requirements for provider-oriented clawbacks with those for pharmacies.

Section 2 of this Act requires written notice from pharmacy benefit managers or entities conducting pharmacy audits. Because Department examinations have indicated that PBMs misuse this provision in the law to conduct audits outside the parameters of the Pharmacy Audit Integrity Program, Section 3 of this Act amends the exclusions to the applicability of the pharmacy audit rules to require that pharmacy benefits managers have more definitive proof, based on physical review of claims data or other investigative methods, to believe misconduct has occurred before the rules related to the Pharmacy Audit Integrity Program become inapplicable to an investigative audit.

This Act also makes technical corrections to existing law to conform to the requirements of the Delaware Legislative Drafting Manual.

Current Bill Text

Read the full stored bill text
Legislation Document

SPONSOR:

Rep. Bush & Sen. Mantzavinos & Sen. Townsend

Rep. Bolden; Sens. Poore, Wilson

HOUSE OF REPRESENTATIVES

153rd GENERAL ASSEMBLY

HOUSE BILL NO. 212

AN ACT TO AMEND TITLE 18 OF THE DELAWARE CODE RELATING TO OVERPAYMENT RECOVERY AND AUDIT PRACTICES.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend § 2730, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 2730. Collection of overpayments by health insurers and health plans.

(c) A health insurer or health plan

shall

may

not initiate overpayment recovery efforts more than

24

12

months after the original payment for the claim was made.

For purposes of this subsection, overpayment recovery efforts are “initiated” when a health insurer or health plan first identifies an error in the original payment for the claim through an initial audit report or similar communication delivered to the health-care provider.

No such time limit

shall apply

applies

to overpayment recovery efforts which

are:

are any of the following:

(1) Based on

a reasonable belief of

fraud, abuse, or other intentional

misconduct;

misconduct as indicated by physical review or review of claims data or statements.

(2) Required by, or initiated at the request of, a self-insured

plan; or

plan.

(3) Required by a state or federal government plan.

(h) A finding of overpayment must be based on the actual overpayment and not 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.

(i) The entity conducting the audit may not use extrapolation in calculating the recoupment or penalties for audits unless required by state or federal law or regulations.

Section 2. Amend § 3305A, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 3305A. Requirements for recoupment or chargeback [For application of this section, see 80 Del. Laws, c. 245, §? 2].

For recoupment or chargeback, the following criteria apply:

(9) Whenever it engages in recoupment or chargeback efforts, a PBM must provide written notice to the pharmacy that identifies the error made in the processing or payment of the claim and justifies the recoupment or chargeback efforts.

Section 3. Amend § 3310A, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 3310A. Applicability of other laws and regulations [For application of this section, see 80 Del. Laws, c. 245, § 2].

This subchapter does not apply to any investigative audit that involves suspected fraud, wilful misrepresentation, abuse, or any audit completed by the State.

The provisions of this subchapter do not apply to an investigative audit of pharmacy records when any of the following apply:

(1) Fraud, waste, abuse, or other intentional misconduct is indicated by physical review or review of claims data or statements.

(2) Other investigative methods indicate a pharmacy is or has been engaged in criminal wrongdoing, fraud, or other intentional or wilful misrepresentation.

(3) The audit is being conducted by the State.

SYNOPSIS

Section 1 of this Act amends the time period during which health insurers may initiate overpayment recovery efforts from 24 months to 12 months of a claim being paid. This Act also amends one of the exemptions to the overpayment recovery deadline to require an indication of fraud, abuse, or other intentional misconduct based on a physical review or review of claims data or statements as opposed to merely having a reasonable belief of such fraud, abuse or other intentional misconduct. It aligns requirements for provider-oriented clawbacks with those for pharmacies.

Section 2 of this Act requires written notice from pharmacy benefit managers or entities conducting pharmacy audits. Because Department examinations have indicated that PBMs misuse this provision in the law to conduct audits outside the parameters of the Pharmacy Audit Integrity Program, Section 3 of this Act amends the exclusions to the applicability of the pharmacy audit rules to require that pharmacy benefits managers have more definitive proof, based on physical review of claims data or other investigative methods, to believe misconduct has occurred before the rules related to the Pharmacy Audit Integrity Program become inapplicable to an investigative audit.

This Act also makes technical corrections to existing law to conform to the requirements of the Delaware Legislative Drafting Manual.