APLE Modules 5-8 PDF

Module 6 Required Reading *Ø The Omnibus Budget Reconciliation Act of 1990 (OBRA ’90) (PDF pg. 392) Chapter 6: Federal Regulation of Pharmacy Practice (PDF pgs. 392–398) OBRA ‘90 took a giant leap beyond the rules about drug products set out in the FDCA & CSA ® OBRA ’90 mandates chang...

Module 6 Required Reading *Ø The Omnibus Budget Reconciliation Act of 1990 (OBRA ’90) (PDF pg. 392) Chapter 6: Federal Regulation of Pharmacy Practice (PDF pgs. 392–398) OBRA ‘90 took a giant leap beyond the rules about drug products set out in the FDCA & CSA ® OBRA ’90 mandates changes in the way that Pharmacy is actually practiced o It recognizes a public expectation of pharmacists beyond oversight of drug distribution to include Detection & Resolution of Problems w/ Drug Therapy The ideas in OBRA ’90 were not new, but the uniform application of these ideas throughout the states marks an unprecedented Expansion of Pharmacy Practice Standards o OBRA ’90 is perhaps the MOST Important Pharmacy-related Law of All Time! OBRA ’90 is a massive law that deals w/ many issues related to government funding ® Only a small part deals w/ Pharmacy practice ® but that small part still has profound effects Drug Use/Utilization Review (DUR): Required by Federal Policy to Ensure that Drug Therapy is as Safe & Effective as possible ® Major step toward Expanding the Responsibilities of Pharmacists o OBRA ’90 places Public Trust in the Pharmacist’s ability to make decisions that Improve the Quality of Drug Therapy & ­ the Likelihood of Good Outcomes Primary Goal of OBRA ’90 is to Save Money o Congress (a major payer for healthcare in the U.S.) believed that Improving the Quality of Drug Therapy could ¯ Costs of Healthcare ® Congress sought to ensure that: § PTs who need drugs get them § PTs who do not need drugs do not get them § PTs use drugs as Effectively & Safely as possible o ­ Quality & ¯ Costs are by no means mutually exclusive objects of Federal Legislation Background Medicare Catastrophic Coverage Act (1988): Introduced the concept of DUR to Improve Drug Therapy & ¯ Costs – Passed by Congress o This law was repealed in 1989 for Economic & Financing reasons unrelated to the Pharmacist’s DUR ® But many of its basic tenets have been incorporated into OBRA ’90 & expanded o CMS (formerly the Health Care Financing Administration, HCFA) promulgated regulations that expanded the Pharmacist’s Functions in Optimizing Drug Therapy for PTs in LTCFs “Pharmacist Provided Patient Care” Model: Pharmacists accept responsibility for producing Good Therapeutic Outcomes & Improving a PT’s QoL ® OBRA ’90 took the goal that Pharmacy developed for itself & has made it a National Policy Establishment of a National Policy requires an indirect approach b/c ONLY States (NOT the Federal Gov’t) can Regulate Professional Practice o Thus, the Federal Gov’t proclaimed that, as a Condition of Participation in Medicaid, States must establish Expanded Standards of Practice for Pharmacists ® This requires that States take action § States don’t have to establish the Standards, but they won’t continue receiving Federal Funds for Medicaid if they fail to meet this Condition § This is a Professional Practice Requirement at the Federal level b/c no State can afford not to meet the Condition Some States chose to have the State BOP promulgate Regulations Imposing the Expanded Requirements for Pharmacists, some other States left that responsibility to the State Medicaid Agency; a few States established Pharmacy Practice Standards through their Legislatures o Depending on how each State acts to fulfill the Federal Requirement, DUR requirements may appear to apply only to Medicaid Rxs or may expressly apply to all Rxs ® However, NO profession has Standards of Practice that change according to the person being served at the time Net Result of OBRA ’90 mandate ® Elevate the Standard of Care owed by Pharmacists to ALL PTs o OBRA ’90 also provided the Minimum Requirements that States had to adopt ® Some States adopted those exact standards while others adopted Stricter Standards ® Pharmacists need to be aware of their State-specific requirements Basic Framework of OBRA ’90 OBRA ’90 contains a number of significant provisions, but most involve 1 of 3 major areas: 1. Rebates These 2 parts are significant for pharmacy b/c they can help provide Funds for the Reimbursement of 2. Demonstration Projects Pharmacists under State Medicaid programs or justify payments to Pharmacists for the Provision 3. DUR ® Most directly related of Cognitive Services to PTs to the everyday Practice of Pharmacy (Figure 6-1 below) Rebates Rebate provision of OBRA ’90: Important expression of Public Policy, but also Stimulates Revenue for State Medicaid programs o Essentially, it requires Mfrs to provide Pharmaceuticals to Medicaid at their “Best Price,” – i.e. the Lowest Price at which they sell the product to any customer § This is accomplished by requiring Mfr to pay each State Medicaid Agency the difference between the Average Mfr Price (AMP) & the “Best Price” § AMP = Price Wholesalers pay to Mfrs for drugs distributed to the Retail Pharmacy class of trade, after deducting customary prompt pay discounts Example: If Mfr Best Price = $20/100 capsules & the AMP = $30/100 capsules ® Rebate = $10/100 capsules owed to Medicaid o Medicaid no longer pays top dollar for Pharmaceuticals & other drug purchasers – e.g. Hospitals & Health Maintenance Organizations (HMOs) benefit from Preferential Prices Demonstration Projects Goal of Demonstration Projects (funded by OBRA ’90): To determine through scientific studies whether the Outcomes of PT Care Improve & the Costs ¯ when Pharmacists are paid to provide DUR services to PTs, whether a drug is dispensed or not Demonstration Projects also address Efficiency & Cost-Effectiveness of Online Computerized DUR & the Cost- Effectiveness of Face-to-Face Consultations o If Demonstration Project Results show that Pharmacists can provide Cost-Effective Services ® Gov’t Agencies & other Payers for Pharmaceutical Services will likely ­ the Compensation they provide for Pharmacists sch Drug Use Review (DUR) DUR deals primarily w/ Healthcare Outcomes (vs. Rebates & Demonstration Projects deal primarily w/ HC Finance) DUR process has 3 parts: - 1. Retrospective Review 2. Educational Programs All 3 of these are elements of a CQI Cycle ® They are ongoing, necessarily 3. Prospective Review interrelated, & they are of equal importance in DUR 1. Retrospective Review 2. Educational Programs 3. Prospective Review A DUR Board that comprises both Physicians, Pharmacists, or both can be Prospective DUR gives Pharmacists an Physicians & Pharmacists oversees the target for Educational Programs opportunity to consider Rx Drug Therapy & Retrospective Review Educational Programs can be: Apply what they know about Proper Med DUR Board’s most important function: o Face-to-Face visits by an expert who calls on Use Review Data concerning the Use of Physician or Pharmacist Prospective DUR generates new data on o Symposia attended by professionals involved Medications over a particular period of Dispensing of Meds ® Data represent the w/ Med Use time & compare those data w/ criteria for most Up-to-Date patterns of Actual Med o Written Materials delivered to the HCP medication use previously developed by Use Goal of Educational Programs: Improve the DUR Board o DUR Board can examine new data & determine o i.e. DUR Board recognizes “ideal” drug the way Meds are Used which old problems w/ drug therapy have been o Main Difference from CE programs is that eliminated or diminished & whether new therapy & determines whether actual med use (as evidence by the data review) conforms to Identification of an Actual Problem via review problem have become evident of Med-Use data prompts the Educational the ideal Programs recommended by DUR Board DUR process continues through its 3-Step DUR Board will undoubtedly discover that Cycle These Educational Programs should be there is room for improvement in how Theoretically, carrying out the Review Cycle more effective than CE b/c they address meds are being used enough times could lead to a state of o e.g. Some PTs may be receiving duplicate solutions to real problems ‘perfection’, but New Drugs, PTs, therapy, taking drugs that interact, or continuing Pharmacists, & Physicians entering the therapy for too long or too short a duration system on a regular basis Þ DUR will never After IDing areas of improvement, DUR stop & there will always be room for Board may recommend that Educational improvement Programs be conducted Components of Prospective Drug Use Review (Prospective DUR) Under OBRA ’90, Prospective DUR requires Active Resolution of problems through a comprehensive review of a PT’s Rx order at the point of Dispensing o Pharmacist evaluates the Appropriateness of med prescribed for the PT within the context of other info that is known about the PT Prospective DUR has 3 Components: 1. A Screen of Rxs before Dispensing 2. PT Counseling by Pharmacist 3. Pharmacist Documentation of relevant info Pharmacists are required to find out necessary info about PTs & their meds before dispensing occurs Pharmacists can Empower PTs & their caregivers through PT counseling so that PTs & caregivers can improve Compliance w/ Therapeutic Regimens, Avoid Med Errors, & ultimately ­ the probability of Success of their drug therapy Screening Prescriptions In the Screening function that OBRA ’90 requires, Pharmacists must detect “Potential” problems – OBRA ’90 specifically states: o The state plan shall provide for a review of drug therapy before each prescription is filled or delivered to an individual receiving benefits under this subchapter, typically at the point-of-sale or point of distribution. o The review shall include screening for potential drug therapy problems due to therapeutic duplication, drug-disease contraindications, drug-drug interactions (including serious interactions with nonprescription or over-the-counter drugs), incorrect drug dosage or duration of treatment, drug-allergy interactions, & clinical abuse/misuse Prospective DUR includes other activities beyond just screening ® i.e. Pharmacist must take some action (e.g. notify prescriber & request clarification, discussing the matter w/ the PT, etc.) when a problem is detected Although computers can greatly assist the Pharmacist in meeting Screening Requirements, OBRA ’90 requires Professional Judgement to determine whether there is a possible problem w/ the way a med has been prescribed for a particular PT at a particular time Counseling Patients OBRA ’90 requires Pharmacists to Offer to Counsel PTs or caregivers in order to prevent potential problems or manage - problems that arise after the product has been dispensed & therapy has begun ® Important b/c even the best screen of a potential problem & appropriate action to resolve them cannot remove all the inherent risks in Med Use Patient Counseling Standards Pharmacist must “Offer to Discuss” w/ each PT or caregiver matters that, in the Pharmacist’s Professional Judgement are significant, including: o The name and description of the medication o The dosage form, dosage, route of administration, and duration of drug therapy o Special directions and precautions for preparation, administration, and use by the patient o Common severe side effects, adverse effects, or interactions and therapeutic contraindications that may be encountered, including ways to prevent them and the action required if they do occur o Techniques for self-monitoring drug therapy o Proper storage o Prescription refill information o Action to be taken in the event of a missed dose Deference to Professional Judgement means Pharmacists should rely on their Training & Experience to determine what info is relevant for a particular PT o “Professional Judgement” ¹ Business Judgement ® Deciding not to counsel or to ¯ length of counseling session b/c it’s inconvenient or difficult is not consistent w/ the purpose of OBRA ’90 o A Pharmacist should withhold info from a PT only when it’s in the PT’s best interest not to receive the info, not when it’s in the Pharmacist’s best interest “Common Severe Side Effects” ® The intent of Congress appears to be that Pharmacists discuss w/ PTs those side effects that are Common (High Probability) or Severe (High Magnitude) as well as Both Common & Severe o Standards may vary in different states – e.g. Some require counseling for new Rxs only, others require it for Refills as well OBRA ’90 discloses that there really is no explicit PT Counseling Requirement ® Instead, legislation requires Pharmacist make an offer to discuss meds w/ PTs o In most states, Interns may be able to counsel under the direct supervision of the Pharmacist o If counseling in person is not practicable (e.g. Mail-Order) ® Pharmacy MUST provide access for counseling by means of a Toll-Free Telephone Number Waiver of Counseling If PTs prefer not to be counseled, they have the right to refuse counseling ® OBRA ’90 states: o Nothing in this clause shall be construed as requiring a pharmacist to provide consultation when an individual receiving benefits under this subchapter or caregiver of such individual refuses such consultation The Law contemplates an Informed Right to Refuse Counseling ® i.e. if a clerk or tech asks, “you don’t want to wait 45 min to be counseled by the pharmacist, do you?” & and PT answers “No” ® this is not the type of Informed Refusal Congress anticipated  o A Refusal can be considered effective only if the PT truly understood the offer & really did not want counseling ® A PT who refuses counseling b/c the Pharmacist or someone else in the pharmacy made it clear that the Pharmacist doesn’t want to be bothered w/ counseling has not received the benefit of the services that OBRA ’90 intends It may be prudent for a Pharmacist to obtain a Written Waiver of the Right to be Counseled ® But it’s much more important that the Waiver be Informed & Voluntary than that the Waiver be put in Writing o If Pharmacist maintains a logbook or other written record in which most notations show Refusals for Counseling ® Pharmacist has made a Record of his/her own Lack of Compliance w/ OBRA ’90 mandate o The Waiver of the Right to be Counseled should be the Exception to the Rule ® Those Pharmacists who Permit the Exception to become the Rule will discover that they have created legal difficulties for themselves Documenting Information OBRA ’90 requires Pharmacists to maintain a Written Record that contains info about PTs & the Pharmacists’ impression of the PTs’ Drug Therapy – OBRA ’90 provides: o A reasonable effort must be made by the pharmacist to obtain, record, & maintain at least the following information regarding individuals receiving benefits under this subchapter: § (aa) Name, address, telephone number, date of birth (or age), & gender. § (bb) Individual history where significant, including disease state or states, known allergies & drug reactions, & a comprehensive list of medications and relevant devices. § (cc) Pharmacist comments relevant to the individual’s drug therapy (42 U.S.C. § 1396r-8(g)(2)(A)(ii)(II)). “Reasonable Effort” that Pharmacists must make to record info about PTs, including their comments relevant to a PT’s Drug Therapy, would be deemed reasonable only if an impartial observer can review the documentation in a pharmacy & understand what has occurred in the past o It should be possible to tell from the documentation what a Pharmacist discovered about a PT, what the Pharmacist told the PT, & what the Pharmacist thought about the PT’s drug therapy at the time of Dispensing o The Documentation should: § Serve as a reminder to the pharmacist (because nobody’s memory is perfect) § Provide a reference for other pharmacists in the same pharmacy § Contain information for surveyors who need to record what was done & connect that action with an outcome if possible § Show enforcement officials that the OBRA ‘90 requirements are being met Liability Concerns with Noncompliance Noncompliance w/ OBRA ’90 could lead to a variety of Liability Concerns for Pharmacists & pharmacies o Counseling ® Pharmacy may face Administrative Action at the State level if Pharmacy fails to meet the law (e.g. Right Aid required to pay half a million dollars in 2014 to various California Administrative Agencies, including state BOP) o Screening ® Failing to properly screen Rxs & act appropriately or failing to properly Counsel has been one of the common types of Civil Lawsuits against Pharmacies & Pharmacists TAKE-AWAY POINTS OBRA ‘90 recognizes a public expectation of pharmacists that goes beyond oversight of drug distribution to include the detection and resolution of problems with drug therapy. States were required to adopt the minimal standards under OBRA ‘90 to continue to participate in Medicaid; however, some states may have stricter requirements. The basic framework of OBRA ‘90 includes rebates, demonstration projects, and DUR. The DUR process includes retrospective review, educational programs, and prospective review. The components of the prospective review are screening of prescriptions prior to dispensing, the offer of patient counseling, and documentation of patient information. In the screening function, pharmacists are required to detect potential problems (therapeutic duplication, drug-disease contraindications, drug-drug interactions, incorrect drug dosage or duration of treatment, drug-allergy interactions, and clinical abuse/misuse) and react to concerns appropriately. OBRA ’90 requires an offer to counsel, although some states have stricter requirements that mandate counseling. When counseling, pharmacists are to use their professional judgment to determine what information is relevant for a particular patient. Patients may refuse counseling, but the refusal must be informed and voluntary. Pharmacies may request a written waiver from the patient. Pharmacists must make a reasonable effort to obtain, record, and maintain patient information. This includes the patients name, address, telephone number, birthdate, gender, significant medical history, and pharmacist comments. Noncompliance with OBRA ’90 could lead to a variety of legal concerns for pharmacies and pharmacists.  Chapter 6: Federal Regulation of Pharmacy Practice (PDF pgs. 414–430) *Ø Medicare (pg. 414 in PDF Textbook) Medicare (enacted in 1965): Federal Gov’t’s effort to ¯ Economic Barriers to HC for the Elderly & Disabled o It provides for federal health insurance for those who are 65 years of age or older or those who have a permanent disability, end-stage renal disease, or have been exposed to environmental health hazards from living in an area subjects to an emergency declaration and have developed certain health-related sequelae Medicare has 4 Components: o Part A: Hospitalization insurance w/o any monthly premium for most eligible beneficiaries (e.g. workers & their dependents who receive Social Security check or railroad retirement checks) § Also covers Drugs administered during Hospitalization, certain LTCF stays, Home Health Visits, & Hospice Care o Part B: Insurance for Outpatient Medical Services (e.g. Doctor visits) § Partially covers Outpatient Diagnostic services (e.g. X-rays & Lab tests), Outpatient Hospital, Physical & Speech Therapy, some Colostomy Supplies, Rental & Purchase of Medical Appliances & Equipment, certain Ambulance services § Also includes Rx Drugs the PT cannot Self-Administer & that are furnished by Physician or Hospital Outpatient dept as incidental to the Physician’s professional service & not charged for separately § Also includes Durable Medical Equipment (DME), certain Vaccines (e.g. Flu & Pneumococcal), & Diabetic Supplies (NOT including Syringes) o Part C: Medicare Advantage – Combines benefits of Parts A & B & provides the option to choose a Managed Care Plan o Part D: Rx Drug benefit added in 2003 & fully implemented in 2006 Medicare Part D Medicare Prescription Drug, Improvement, & Modernization Act of 2003 (MMA) = Medicare Part D CMS rates each plan on the basis of its quality and performance, including such criteria as customer service, complaints, drug pricing, patient safety, and member experience o Each plan is rated using a 5-star system Enrollment Periods Most eligible beneficiaries must initially choose a plan during a 7-month period starting 3 months prior to the month of their 65th birthday and ending 3 months after the month of their 65th birthday o Failure to choose a plan during the eligibility period may result in a higher monthly premium should they choose a plan later; “late enrollment penalty” o Beneficiaries may remain in their current plan if it provides coverage at least as good as the standard Part D benefit; “creditable coverage” Open enrollment period= October 15 to December 7 Beneficiary Cost Low-income beneficiaries will pay less than other beneficiaries- often, no premium or deductible plus a nominal fixed copayment amount based on whether the dispensed drug product is generic or brand name Covered Drugs and Plan Formularies Part D Covers prescription drugs used for medically accepted indications, and also includes biological products, insulin, and medical supplies associated with administering insulin such as syringes, needles, alcohol swabs o “Excluded list”: § OTC drugs § Weight loss or weight gain drugs § Fertility promotion drugs § ED drugs used for the treatment of sexual dysfunction § Drugs used for cosmetic purposes or hair growth § Cough and cold drugs used to treat symptoms § Vitamins and minerals (except prenatal vitamins, niacin, fluoride preparations, and certain vitamin D analogs) § Outpatient drugs for which the manufacturer’s require testing or monitoring May use drug formularies that incorporate drug tiers with variable copays, drug utilization review, prior authorization, quantity limits, step therapy, and other tools CMS requires that each Part D has a formulary that includes all therapeutic categories and classes of drugs as determined by the model US Pharmacopeia guidelines A Part D plan formulary only needs to include at least 2 drugs in each therapeutic drug class – Exceptions where all or substantially all drugs must be covered: o Antidepressants o Antipsychotics o Anticonvulsants o Antiretrovirals o Antineoplastics o Immunosuppressants MIPPA (Medicare Improvement for Patients and Providers Act) authorizes CMS to require the inclusion of additional categories and classes of drugs where all drugs must be covered, provided that 2 criteria are met:  o That restricted access of the drug or class would have major life-threatening consequences for individuals with the disease being treated, and that there is a significant clinical need for these individuals to have access to multiple drugs within the category or class because of unique chemical and pharmacological effects of the drugs CMS is required to review formularies to ensure that beneficiaries have access to a broad range of appropriate drugs and that the formulary does not discriminate or discourage enrollment of particular groups If a plan makes any change in the formulary such as additions or deletions, it must notify CMS within 30 days of the P&T - committee’s decision Plans must provide at least a 60-day advance notice to prescribers, pharmacies, beneficiaries, and other affected parties prior to removing a drug from the formulary or changing the status of a drug Pharmacy Access The law requires that least 90% of beneficiaries in suburban areas live within 5 miles; and that 70% of beneficiaries in rural areas live within 14 miles of a participating pharmacy The law creates a federal “any willing provider” requirement, meaning that a Part D plan must permit any “similarly situated” pharmacy to participate in the plan that meets the terms and conditions of the plan Electronic Prescribing MIPPA permitted payment bonuses to prescribers for e-prescribing Pharmacy Reimbursement Plans must pay pharmacy claims within 14 days of electronic submission or within 30 days for claims submitted by other means MIPPA also requires plans to update their drug cost databased weekly to reflect accurate market prices and requires the plans to disclose the sources they used for the updates Printed Notice Required When Prescription Claims Not Covered Each Part D sponsor must have a system that transmits instruction to the pharmacy to provide to the enrollee a printed notice when a prescription cannot be covered at the point of sale Medication Therapy Management (MTM) The law requires plans to provide coverage for disease management programs, termed MTM programs The Part D plan must use an opt-out method only for targeted beneficiaries and must target beneficiaries at least quarterly Plans must not require more than 3 chronic diseases to qualify for MTM and must target at least 5 of the 9 listed core chronic - conditions (Alzheimer’s disease, ESRD, hypertension, heart failure, diabetes, dyslipidemia, respiratory disease, bone disease/arthritis, and mental health) Plans must not require beneficiaries to be on more than 8 Part D drugs as the minimum number to qualify for MTM - Plan and Provider Marketing Limitations MIPPA prohibits plans from unsolicited direct contact of prospective enrollees, including door-to-door and outbound telemarketing; selling non-health-related products such as life insurance during marketing activities; providing meals at promotional events; marketing in a healthcare setting such as a pharmacy, except when conducted in a common area; and at educational events. Fraud and Abuse Any false claims submitted for drugs dispensed under Part D will be considered a violation of the federal False Claims Act (FCA) o Require that plan sponsors must have a “comprehensive fraud and abuse plan to detect, correct, and prevent Fraud, Waste, and Abuse” Examples of False Claims under the FCA: o Returning a prescription to stock that was not picked up and not reversing the claim o Billing for a similar but more expensive medication that the one dispensed o Billing for brand and dispensing generic Pharmacies must certify that the data they submit are true, accurate, and compete, and must keep records for 10 years Durable Medical Equipment, Prosthetics, Orthotics, and Supplies MMA not only affects pharmacies dispensing Medicare prescriptions, but also those supplying DME, prosthetics, orthotics, and supplies (DMEPOS) Medicare and Provider Status for Pharmacists Pharmacists are not listed as healthcare providers under Medicare Part B, and therefore are unable to obtain coverage for their valuable pharmacy services Medicare and the Regulation of Hospital Pharmacy Hospitals that wish to admit Medicare patients must comply with certain federal requirements called the Medicare Conditions of Participation  The pharmacy or drug storage area must be administered in accordance with accepted professional principles o Must employ full time, part time, or consultant pharmacists to supervise and coordinate the pharmacy department activities FDA Regulation of Pharmacy in Hospitals U.S. Congress has chosen to exempt hospital pharmacies from the close regulation to which drug manufacturers are subjected DEA Regulation of Pharmacy in Hospitals Hospital pharmacy is less regulated at the federal level than is the community pharmacy o The numerous and complex requirements for labeling and recordkeeping of controlled substances ordered pursuant to a prescription do not apply to a controlled substance ordered pursuant to a hospital drug order (often called “medication orders”), because under federal law the term “prescription” does not include an order to dispense a drug to an inpatient for immediate administration TAKE-AWAY POINTS Medicare is the federal government health plan, insuring primarily those individuals over 65 years of age and those with permanent disabilities; it has four components, Parts A, B, C, and D. Medicare Part A, in part, insures for hospitalization and certain LTCF stays, home health visits, and hospice; Part B, in part, covers certain outpatient products and services; and Part C, called Medicare Advantage, allows beneficiaries to choose a managed care plan. Medicare Part D provides prescription drug benefits through either private stand-alone plans or as a component of a Part C plan. Once enrolled in a Part D plan, an enrollee cannot normally change plans until the next open enrollment period, except if making a one-time change to a five-star plan. The open enrollment period is from October 15 to December 7. Each plan determines its premium amount. In addition, the law sets limits on how much the beneficiary must pay up to the coverage gap while in the coverage gap and after the coverage gap. Low-income beneficiaries pay less and pharmacies may waive or reduce costs subject to certain requirements. Certain categories of drugs are specifically excluded from coverage under Part D, although plans may cover these drugs (except for OTC drugs) as a supplemental benefit. Part D plans may use drug formularies that incorporate tiers with variable copays, drug utilization review, prior authorization, quantity limits, and other restrictions. Plans employing a formulary must utilize a P&T committee to develop and review the formulary; and, the formulary must include all therapeutic categories and classes of drugs with at least two drugs in each class, except for certain classes where all drugs must be covered. Plans may not change therapeutic categories and classes in the formulary other than at the beginning of the year, except to include new drugs or therapeutic uses. Part D plans must ensure that beneficiaries have convenient access to a network of pharmacies and cannot use mail-order pharmacies exclusively in place of community pharmacies. Beneficiaries are entitled to receive the same supply of drugs at either a community or mail-order pharmacy. Although the law contains an “any willing provider” provision, many plans presently use networks of preferred pharmacies and some PBMs have excluded pharmacies from plans saying that they are not “similarly situated.” The law provides for the development of national e-prescribing standards, encourages e-prescribing, and preempts any state laws or regulations that restrict e-prescribing. Pharmacies are reimbursed the ingredient cost plus a dispensing fee as determined by the plan; claims must be paid within 14 days of electronic submission. Pharmacies must provide a printed notice to the patient when a prescription is not covered by the plan. The law requires plans to provide MTM programs and pharmacists may receive fees for providing those services. Plans may not require more than three chronic diseases for a beneficiary to qualify for MTM services and must target at least five of nine core chronic conditions. The law restricts the types of marketing in which plans and pharmacies can engage. Pharmacies are permitted to inform patients of the plans in which they participate and distribute plan marketing materials and enrollment applications. False claims under Part D are subject to the federal fraud and abuse statutes, and both plans and pharmacies must have policies and procedures in place to address fraud, waste, and abuse, including pharmacy employee training programs. Pharmacies that supply DMEPOS must be accredited; however, the ACA allows an exemption if certain criteria are met. Pharmacists are not recognized as healthcare providers under Medicare, affecting their ability to be compensated for services. APhA is currently supporting federal legislation to change the provider status for pharmacists. Hospitals admitting Medicare patients must comply with the Medicare Conditions of Participation. Hospital pharmacies engaging in drug repackaging and compounding for their own patients are not subject to registering as manufacturers under the FDCA; however, they must meet applicable federal and state compounding requirements. Medication orders for hospital inpatients are not prescriptions for the purposes of the federal CSA. Ø Medicaid (pg. 425 in PDF Textbook) Provides for the healthcare costs for certain categories of indigents, including: o The blind o The disabled o The aged o Members of families with dependent children Eligibility is determined by an individual’s income and assets The Medicaid program is subject to federal approval and regulation under the authority of CMS The state’s program is jointly funded, with the federal government reimbursing the state government for a certain percentage of its Medicaid expenditures Prescription Drug Coverage Medicaid provides prescription drug coverage as an optional service CMS has identified certain commonly used multiple source drugs and publishes a list of these drugs with the FUL price for each drug and the source for the FUL Evolution of Reimbursement for Multiple Source Drugs in the FUL Program A pharmacy that dispenses a drug on the FUL list is usually reimbursed by the state for the listed price of the drug plus a reasonable dispensing fee, which is determined by each state FUL limit no less than 175% of the weighted average of the most recently reported AMPs for therapeutically equivalent drug products available for purchase by retail pharmacies on a nationwide basis AMP is defined as the average price paid to the manufacturers by wholesalers for drugs distributed to retail community pharmacies and retail community pharmacies that purchase drugs directly from the mfr The FUL price must be based on quantities of 100 tablets or capsules or, of the drug is liquid or not commonly available in quantities of 100, it must be based on the quantity that’s commonly provided by pharmacists The agency must specify the compendia source for its price basis for each drug A drug cannot be placed on the FUL list, unless it has been evaluated by the FDA as therapeutically equivalent in the Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book) and has been listed by at least 3 suppliers Medicaid agency payments must not exceed in the aggregate the lower of (1) AAC plus a professional dispensing fee established by the agency or (2) providers’ usual and customary charges to the general public Reimbursement for Other Drugs Under the “lower of” provision, a pharmacy that regularly sells certain competitive drugs at low prices to non-Medicaid patients must honor these prices to Medicaid as well If a drug is not on the FUL list or if it is on the FUL list but is one for which the prescriber has requested the brand name product, Pharmacy is to be Reimbursed Estimated Acquisition Cost (EAC) plus reasonable Dispensing Fee or the provider’s usual and customary charges to the general public Historical Overview of Estimated Acquisition Cost and Average Wholesale Drug Mfrs artificially inflated AWP prices AWPs use as a benchmark has resulted in overpayment by third party insurers Litigation Over State Medicaid Cuts o Litigation Over Medicaid Dispensing Fees o Tamper-Resistant Prescription Pads Prescriptions must be executed on a tamper-resistant pas The prescription form must contain one or more industry-recognized features designed to prevent: o Unauthorized copying of a completed or blank prescription pad o Erasure or modification of information written on the prescription pad by the prescriber o The use of counterfeit prescription pads in order to be considered tamper resistant by a state Emergency fills are permitted as long as prescriber provides a verbal, faxed, electronic, or compliant written prescription within 72 hours TAKE-AWAY POINTS Medicaid provides healthcare costs for certain categories of indigent patients and is administered by the state, jointly funded by the federal government and the state, with each state program subject to federal approval and federal regulation.  The federal government established the “MAC” program for drugs in 1975 out of concern that state Medicaid agencies were reimbursing pharmacies too much. The FUL program replaced the MAC program in 1987. FUL drugs are multiple source drugs for which CMS determines a reimbursement amount. The calculation for Medicaid reimbursement to a pharmacy for a dispensed drug product on the FUL list is the FUL price of the drug plus a dispensing fee, as determined by each state. Prior to the current law, the FUL price of a drug was calculated as 150% of the published price (AWP) for the least costly therapeutic equivalent and later at 250% of AMP. Current law provides that the FUL price of a drug is determined as no less than 175% of the weighted average of the most recently reported AMPs for therapeutically equivalent drug products available for purchase by “retail community pharmacy” on a nationwide basis. CMS regulations provide an exception allowing for the use of a higher multiplier when the FUL calculation amounts to less than the average retail community pharmacies’ acquisition cost. The definition of “retail community pharmacy” excludes mail order, nursing home, LTCF, hospital, clinic, not-for-profit and government pharmacies, and PBMs (42 C.F.R. § 447.504(a). AMP is defined as the average price paid to the manufacturer by wholesalers for drugs distributed to “retail community pharmacy” and that “retail community pharmacy” pays for drugs directly from the manufacturer. The FUL price must be based on quantities of 100 tablets or capsules or on quantities commonly provided by pharmacists. The agency must specify the compendia source for its price basis for each drug, and an FUL drug must be therapeutically equivalent and available from three different suppliers. If a drug is not on the FUL list or the prescriber has designated “brand necessary,” the pharmacy is reimbursed the lower of (1) AAC plus a dispensing fee established by the agency or (2) providers’ usual and customary charges to the general public (42 C.F.R. § 447.512(b). Prior to the formula provided earlier, pharmacies were reimbursed based upon the EAC of the drug rather than the AAC. States determined EAC based upon AWP; however, AWP has been determined to be a flawed estimate of what a pharmacy actually pays for a drug product. Provider organizations in various states have sued to prevent cuts in Medicaid reimbursement. Courts have ruled against pharmacy plaintiffs suing over inadequate Medicaid dispensing fees, finding that the state has no duty to conduct dispensing fee studies nor reimburse on the basis of the studies if they were conducted. Medicaid prescriptions must be written on tamper-resistant prescription pads.  Module 7 Required Reading &Ø Health Insurance Portability and Accountability Act of 1996 Chapter 6: Federal Regulation of Pharmacy Practice (PDF pgs. 401–412) (PDF pg. 401) The law seeks to improve the portability and continuity of health insurance coverage and to prohibit discrimination in health coverage Also regulates the privacy and security of health information, and authorizes the DHHS to enact regulations to this effect Targets 4 aspects of health information: o Transaction and code sets o National provider identities o Security o Privacy The intent of requiring a single NPI for each provider is uniformity, administrative simplicity, and cost They established requirements that covered entities (those entities to whom the regulations apply) must implement to protect the information from unauthorized access, alteration, deletion, and transmission Physical, technical, and organizational procedure safeguards must be established Entities are free to develop their own security measures by written policies and procedures as long as they achieve the objectives and standards contained in the regulations The privacy regulation standards are concerned with the patient’s rights and how and when the patient’s information may be used Examples of Privacy Abuses A chain pharmacy sold its used computers to the public complete with patient prescription and patient profile databases still intact. A retiring physician sold his patients’ medical records to a business, which then resold the records back to the patients. The 13-year-old daughter of a hospital employee obtained a list of hospital patients’ names and phone numbers from the hospital and as a joke called patients and told them they had human immunodeficiency virus. Drug manufacturers commonly obtained from pharmacies lists of patients taking certain prescription medications, and then would send those patients letters urging them to ask their physician to change them to another medication. Laboratories commonly sold patient lab results to drug companies, which would then use the information to target patients to promote their medication. Employers would access individuals’ medical information and use it to determine whether to hire or fire employees. Who Must Comply with HIPPA Called “covered entities” under the privacy rule, health plans, healthcare clearinghouse, and healthcare providers that conduct financial or administrative transactions electronically must comply Business associates of covered entities are also directly liable for compliance with certain of the HIPAA privacy and security requirements Protected Health Information Information covered under HIPAAA Includes all forms of health information that: o Relate to past, present, or future physical or mental health; the provision of care; or payment for care o Identify the patient or could reasonably be expected to identify the patient Notice Provision Pharmacy must provide a “Notice of Privacy Practice” to each patient containing several items of information Notice must be provided in paper in paper form on the day the pharmacy first provides service, unless the patient consents to electronic transmission The notice must also be posted in a prominent and visible location and made available on request to any person, whether the person is a patient or not If the pharmacy has a website, the notice must be posted on the site Acknowledgment of Notice A pharmacy must make a good faith effort to distribute the notice to patients and obtain a written acknowledgment of receipt Only one signed acknowledgement is required every time a prescription is dispensed A pharmacy may not refuse treatment to a patient who refuses to sign the acknowledgment If the patient doesn’t personally pick up the prescription, the pharmacy could mail the notice to the patient with an acknowledgment form that the patient could sign and return Failure to receive an acknowledgment is not a violation, because the pharmacy need only to make a good faith effort; however, the effort should be documented The patient’s personal representative may sign the acknowledgement for the patient Use and Disclosure of PHI The privacy rule allows pharmacies to use and disclose PHI for treatment, payment, and operations (TPO) o Treatment includes providing, coordinating, or managing the healthcare of the patient; in pharmacy, this includes dispensing medications, counseling patients, maintaining patient profiles, and consulting with the patient’s other HCPs  § Pharmacist can disclose PHI with the patient’s primary care physician and nurse practitioner or physician assistant as well as any other HCPs involved in treating the patient o Payment activities include submitting claims for reimbursement, determining patient eligibility and extent of coverage, and sending bills to patients o Operations encompass those activities necessary to operate a pharmacy such as quality assessment, fraud, detection, audits, certifications, and business management Pharmacists may always provide complete disclosure of PHI to the patient and requires the pharmacist to do so if the patients requests Pharmacies may charge a reasonable, cost-based fee for providing patients a copy of their records Disclosure may also be made to the patient’s personal representative or agent such a friend, relative, roommate, or neighbor Patients must receive their PHI in 30 days and if there is good cause, it may be extended another 30 days by providing the patient with a written explanation for the delay Accounting for Disclosures Under HITECH, if a covered entity utilizes an HER, the entity will be required to account for all disclosures, including disclosures of TPO, within 3 years prior to the date of request o Not really used If a patient pays for a prescription or other goods or services with cash, the patient can prevent the pharmacy from disclosing information about treatment to his or her health insurers Minimum Necessary Requirement A pharmacy may disclose only the minimum amount of PHI necessary to accomplish the objective o Exceptions: § Communications to the patient § Communications regarding the treatment of the patient with other providers involved in the treatment § When authorized by the patient § When required by DHHS for compliance and enforcement purposes § When required by law A limited data set is PHI that excludes direct identifiers of the patient such as name, address, phone numbers, and social security number Incidental Use and Disclosure Pharmacies are not liable for incidental uses and disclosures, provided they have applied “reasonable safeguards” to protects the PHI Pharmacists are expected to exercise professional judgement and common sense No violation occurs when the pharmacy calls out the name of the patients who is waiting for a prescription, nor would it be a violation if another patient incidentally hears the pharmacist speaking to a technician or another pharmacist about a prescription Pharmacist may also leave messages on the patient’s answering machine, although it would be wise to say as little as possible De-Identification of PHI The following items are considered identifiable: o Name o Geographic subdivisions o All dates o Telephone numbers o Fax numbers o Email addresses o Social security numbers o Medical record numbers o Health plan beneficiary numbers o Account numbers o Certificate/license numbers o Vehicle identifiers o Device identifiers o Web universal resource locators o Internet protocol address numbers o Biometric identifiers o Full-face photographic images, etc. Considerations for Pharmacy Students in Early and Advanced Experiences Unless the patient gives specific authorization, all patient identification information should be removed Pharmacy students should refrain from discussing patients in public places Other Permissible Use and Disclosure of PHI The privacy regulations allow the pharmacy to disclose PHI for governmental-type reasons, including: o Public health activities o Judicial and administrative proceedings o Law enforcement purposes o Serious threat to health or safety o As required by law The pharmacist should always contact the privacy officer and an attorney before releasing information Breach of PHI If a breach has occurred the pharmacy must notify the affected individual(s) by first-class mail (or electronically, if the individual has agreed) within 60 days after the breach is discovered o The pharmacy may have to notify DHHS of breaches depending on the number of individuals affected Þ more than 10 o If more than 500 individuals are affected, the pharmacy must also notify the media within 60 days after discovery and must notify DHHS immediately Disposal of PHI Covered entities must develop and implement reasonable policies and procedures for disposal Marketing, Sale of PHI, and Patient Authorizations HIPAA requires an individual’s written authorization before his or her PHI can be sold or used for marketing o Authorizations must be detailed and customized for the particular use or disclosure intended, contain an expiration date, and be signed by the patient o A patient may not be denied treatment for refusing to sign an authorization Marketing means to make a communication to an individual about a product or service that encourages the individual to purchase or use that product or service o Exceptions to marketing include communication about general health issues as well as communications made: § For the treatment of an individual § Face-to-face § For case management or care coordination § To direct or recommend alt tx, therapies, HCPs, or settings of care § Health-related services If pharmacy wanted to mail patients a communication about a non-health-related product or service, individual authorization would be required If there is financial remuneration related to the communication, then even treatment-related communications constitute marketing Marketing exception for refill reminders and other communications about a drug or biologic currently being prescribed to the individual Sale of PHI occurs when a covered entity discloses PHI for remuneration as opposed to encouraging an individual to purchase or use a product or service A pharmacy would not be permitted to exchanged PHI for direct or indirect remuneration without obtaining prior authorization Aligning HIPAA with FTC and FCC Regulations Pharmacies must also ensure that their disclosure statements to consumers are not deceptive under the FTC Act Health information must be in plain language, describe to consumers how their health information will be used, and not create a deceptive or misleading impression Pharmacies must also ensure compliance with TCPA when instituting refill reminder or other company programs that involved automated phone calls to patients Automated or prerecorded calls must deliver a healthcare messages; the calls should make clear that it relates to a prescription drug that the pharmacy provides; the call should note it is being made on behalf of the pharmacy; and pharmacies should only call patients with whom they already have an established relationship and the message should relate to a prescription the patient had previously Business Associates The pharmacy must have a business associate contract with the entity in order to share PHI, and all PHI is subject to the minimum necessary requirement Under HITECH, business associates are now directly responsible and accountable to maintain and protect PHI in the same manner as covered entities and are subject to HIPAA enforcement authority Training Programs DHHS estimates that workers receive on average 1 hour of training The pharmacy must document that each worker has completed training > HIPPning Policies and Procedures Pharmacies must develop policies and procedures to implement the HIPAA privacy standards  This includes identifying a privacy officer to oversee the pharmacy’s privacy compliance program and enumerating the privacy officer’s responsibilities The policies and procedures must provide for the imposition of sanctions against any worker who violates the privacy rules or the pharmacy’s policies and procedures Penalties and Enforcement Unintentional violations can result in fines of $100 per violation up to $25,000 per person for all violations in a calendar year Violations due to reasonable cause and not willful neglect can result in fines of $1,000 per occurrence, but no more $50,000 for all violations in a calendar year Willful neglect violations that are corrected within 30 days can result in fines of $10,000 with an annual cap of $250,000 Fines for willful neglect violations not corrected within 30 days can be up to $50,000 per violation with an annual cap of $1,500,000 Violations that are intentional or that involved fraud are subject to more severe penalties, including prison HITECH now allows state attorney generals in addition to DHHS to bring civil actions in federal court to enforce HIPAA Although HIPAA provides for civil and criminal penalties against pharmacies when there is a violation, it does not create a private cause of action for individuals to sue Pharmacists should be aware that improper disclosure of PHI could be used in state court actions, including negligence and invasion of privacy lawsuits Health Information Technology Infrastructure HIT is generally considered the critical element in improving the quality and efficiency of the nation’s healthcare system Cost appears to be the most significant barrier The objectives of establishing HIT infrastructure are to protect the privacy of PHI, reduce medical errors, reduce costs by improving administrative efficiency, improve coordination among healthcare providers and improve the provision of public health services and emergency response systems Prescribers and hospitals (not pharmacies) will receive financial incentives to adopt EMR technology ONCHIT is responsible for developing HIT standards and regulations in conjunction with DHHS and 2 appointed committees o HIT Policy Committee o HIT Standard Committee ONCHIT and DHHS are also responsible for developing and regulating national and regional HIT research centers and providing grant funding to educational institutions (including pharmacy schools) to incorporate HIT into clinical education and to develop medical informatics education programs TAKE-AWAY POINTS HIPAA regulates four aspects of health information: (1) transaction and code sets, (2) national provider identities, (3) security, and (4) privacy. Covered entities, such as pharmacies as well as business associates must comply with HIPAA. PHI is protected by HIPAA. PHI includes all forms of health information that (1) relate to past, present, or future physical or mental health; the provision of care; or payment for care; and (2) identify the patient or could reasonably be expected to identify the patient. De-identified information is not PHI. “Notice of Privacy Practices” must include how the pharmacy intends to use and disclose information, the pharmacy’s obligation to notify the patient of a breach of unsecured PHI, a statement that the individual can restrict certain disclosures to a health plan when they pay for the treatment out of pocket in full, a description of the legal duties of the pharmacy to protect PHI, a statement regarding uses and disclosures that require authorization, a statement of the patient’s rights and how they can exercise those rights, a statement that the patient may complain to DHHS and how to file a complaint, and contact information for a company representative to contact with privacy concerns. “Notice of Privacy Practices” must be provided in paper form on the day the pharmacy first provides service, unless the patient consents to electronic transmission. The notice must also be posted in a prominent and visible location and made available upon request as well as posted on the company website, if they have one. Pharmacies must make a good faith effort to distribute and obtain a written acknowledgment of receipt of their “Notice of Privacy Practices.” Only one signed acknowledgment is required for each patient. PHI can be used and disclosed for TPO; however, pharmacies are only permitted to disclose the minimum amount of PHI necessary to accomplish the objective. Exceptions to the minimum necessary requirement include communications to the patient; communications regarding the treatment of the patient with other providers involved in the treatment; when authorized by the patient; when required by DHHS; and when required by law. Complete disclosure of PHI to the patient is required to be given if requested by the patient. In general, covered entities have 30 days to act on requests. Patients have a right to request an accounting and disclosure of PHI. Pharmacies are not liable for incidental uses and disclosures of PHI, provided they applied “reasonable safeguards.” In addition to TPO, pharmacies may disclose PHI for governmental-type reasons, including public health activities, law enforcement purposes, and as required by law. Pharmacies are required to address breaches of unsecured PHI with limited exceptions and notify affected individuals.  Proper disposal of PHI is required under HIPAA. Pharmacies have been involved in violations for improper disposal of PHI in dumpsters and open containers. Sale of PHI and use of PHI for marketing with limited exceptions requires individual authorization. Exceptions to marketing include communications about general health issues; for patient treatment; face-to-face; for case management or care coordination; to direct or recommend alternative treatments, therapies, and more; and about health-related services offered by the entity. In addition to meeting HIPAA requirements for PHI, pharmacies must also comply with FTC and FCC regulations regarding unfair and deceptive business practices, telemarking, and advertising. Penalties for HIPAA can be severe and could be the basis for lawsuits in state court. & Ø Federal Antitrust Laws (PDF pg. 446) The Sherman Antitrust Act Concerted Activity Section 1 of the act makes unlawful every contract, combination, or conspiracy in restraint of trade o Enacted to prevent individual competitors from entering into agreements that would reduce competition and thereby adversely affect the consumer’s welfare o Seems to preclude any contract or combination because every contract in some way restrains trade o Courts only invalidate unreasonable restraints to competition o A single competitor cannot violate o Can violate of two or more independent pharmacies agree to reject a third-party prescription plan, BUT it is permissible for each pharmacy independently to reject that third-party plan o It is NOT illegal for a chain pharmacy to reject a third-party plan, even if it owns hundreds of pharmacies, because the chain is considered one legal entity Section 2 of the act prohibits monopolies, attempts to monopolize, or conspiracies to monopolize o Places limitations on individual businesses that constitute monopolies o It is illegal for business to exploit its monopoly power for the purpose of harming competition rather than for legitimate business The purpose of the Act is not to protect competitors but rather - protect competition Of the defendant does not possess adequate market power, the plaintiff is not likely to have the grounds for an antitrust action Market Power Market power is the amount of business that the defendant controls of all the available business the defendant controls of all the available business in the geographic area o Is the ability of a business to raise prices above those that would be charged in a competitive market or the ability to exclude competition o Conduct that may be unreasonably anticompetitive or restrictive in one market may have little effect in another The threshold for market power depends on the facts of each situation o Generally speaking, a market share of more than 40% may raise monopoly concerns Monopoly Power Generally speaking, a market share of more than 40% may raise monopoly concerns Rule of Reason and Per Se Rule Under the Rule of Reason analysis, a court determines whether the defendant’s activity is reasonable by balancing the procompetitive and anticompetitive effects of the activity o The court considers the purpose, nature, duration, effect, and justification of the activity as well as the market power of entities involved o The court attempts to determine whether the net effect of the defendant’s action is to promote competition or suppress it Under Per Se, the courts traditionally classified certain types of activities to be unreasonably anticompetitive o If a defendant’s activity falls under one of these classifications, the court will usually invalidate the activity without the need to hear additional evidence and regardless of any justification by the defendant o Price fixing: an explicit or implicit agreement among competitors to affect price or the allocation of services in price fixing § An example would be when competing pharmacies all decide to underprice each other thus deprives the consumer of competition that would probably result in lower prices or better services o Boycotting: often occurs innocently when one pharmacist owner or manager asks other pharmacy owners whether they plan to accept or reject a particular third-party prescription program § The group may then decide to stick together and reject the third-party plan unless its reimbursement level is raised o Tying Arrangements: conditioning the purchase of one product on the purchase of another; however, only when the seller can force the buyer the purchase the tied product is such an arrangement illegal Prescription Benefit Managers (PBMs): are companies that contract with health plans to manage the prescription benefit component of the plan, with the primary objective of lowering costs of the plan o Generally attempt to accomplish this objective by performing several activities such as negotiating discounts with drug manufacturers, developing drug formularies typically favoring generic drugs, contracting with community pharmacy providers, processing claims from pharmacies, engaging in prospective and retrospective DUR, and dispensing to patients through their own mail-order facilities o Could steer patients to the affiliated chain pharmacy either directly or indirectly  o Have been accused of a lack of transparency because they share very little financial data with plans, pharmacies, and beneficiaries § Results in the public not knowing the extent of the rebates and discounts that PBMs receive from drug manufacturers and whether any of that is actually passed on to reduce healthcare costs § Conceals some important information, including whether a PBM has a contract to favor a particular manufacturer’s product, even though it might be more costly than a competitor’s, and what price the health plan pays to the PBM for the prescription vs what the PBM pays the pharmacy for the prescription o Largely unregulated Exclusive contract: a seller agrees to sell its product or service only to a particular buyer o Generally legal o Antitrust problems may arise if an exclusive contract unreasonably restrains competition o Often, the market share of the contracting parties is the determining factor Joint venture: occurs when two or more independent entities integrate into a new organization for the purpose of increasing business or entering a new market o Generally legal, unless the market share of the new organization unreasonably harms competition PSAOs: contracts with several pharmacies to represent them in third-party program bidding and negotiating o Unites several pharmacies under one administrative roof o Offer several services, which each pharmacy member must agree to provide o Without this, independent pharmacies and small chain pharmacies would be powerless to compete for third-party program business To reduce antitrust risks, the PPO should be open to any pharmacy that wishes to join it o Each pharmacy member should be allowed to participate in other PPOs and in other third-party plans that have not contracted with the PPO in question o All precautions must be taken to ensure that the PPO is procompetitive for the patient, not simply to obtain higher fees for pharmacies To obtain a better price for sellers, some competitors may form a cooperative to pool their purchasing power o Participation in a purchasing cooperative is often the only way that many pharmacies can compete o The courts generally regard cooperatives favorably because they usually result in lower prices for consumers o Could violate the Sherman Antitrust Act if it expelled a member to prevent the member from competing with the other cooperative members and that member had no access to another purchasing cooperative o Problems could also arise if a purchasing cooperative that represented a significant market share for competing sellers exclusively contracted with a seller o Cooperatives with market power should be cautious about refusing to purchase particular products or refusing to do business with particular sellers because these activities could be construed as boycotts Noerr-Pennington Doctrine: individual and collective efforts to influence government action are immune from antitrust liability o The doctrine protects efforts to induce legislative, judicial, or administrative o Pharmacists and pharmacy organizations, can collectively lobby a state legislature or state Medicaid agency to convince it to offer a higher dispensing feed for Medicaid prescriptions The Robinson-Patman Act Makes it unlawful for sellers to discriminate in price between purchases of like products when the effect of the discrimination may substantially injure competition, unless the discrimination is cost justified Savings to the manufacturers through economies of manufacture, sale, or delivery may justify such a price difference between buyers An injured competitor has a cause of action against both the seller who discriminated and the buyer who knowingly purchased the products at the discriminatory price The act was passed in an effort to protect independently owned grocery stores against unfair purchasing practices by chain operations Applies only if the price discrimination occurs between competing buyers; otherwise, there can be no injury to competition A plaintiff must show that the discriminatory prices received by the competitor caused the plaintiff to suffer injury in the form of diverted sales and declining profits, usually because the competitor is able to offer low prices to customers o Can demonstrate injury by introducing into evidence the financial records of the plaintiff and the competitor and manufacturer o It also is admissible to have witnesses testify that they ceased shopping at the plaintiff’s pharmacy and began shopping at the defendant’s pharmacy because of the lower prices offered by the competitor Nonprofit Institutions Act: exempts nonprofit schools, colleges, universities, public libraries, churches, and charitable institution from the Robinson-Patman Act when the purchases are for their “own use” Permissible activities under “own use” doctrine to include sale of drugs to: o Inpatients, emergency room patients, and outpatients (defined as patients, other than inpatients or emergency room patients, who receive treatment or consultation on the premises) for use on hospital premises o Inpatients or emergency room patients on discharge and for personal use away from premises o Outpatients for personal use away from the premises o Hospital employees and their dependents, students at the hospital and their dependents, and medical staff of the hospital and their dependents, all for their own personal use  Regarding the listing of take-home prescriptions as a permissible activity, the Court held that the prescription must ne for a “limited and reasonable time, as a continuation of, or supplement to, the treatment that was administered at the hospital” o Impermissible activities include the sale of these drugs to: § Former patients obtaining refills § Medical staff for resale in their practice § Walk-in customers who have no connection with the hospital When the hospital engages in an impermissible activity, it has not necessarily violated the Robinson-Patman Act o The hospital has simply lost its “own use” exemption and can now be scrutinized under the act o A plaintiff must still establish that competitive injury occurred For both the seller and the buyer, a defense to an alleged violation of the Robinson-Patman Act is the meeting competition provision in the act o Under this clause, price discrimination is justified if the price established in good faith to meet equally low price of a competitor Manufacturers commonly negotiate the price of brand name drugs with hospital pharmacies, HMOs, mail-order pharmacies, and others o The manufacturers contend they must offer discounts to these buyers because they utilize restrictive formularies and can determine which drugs they will prescribe and dispense o These buyers have the owner to exclude a manufacturer’s product if they do not receive favorable prices o Community retail pharmacies, argue the manufacturers, do not have this power and do not affect market share, thus no reason to negotiate them TAKE-AWAY POINTS The Sherman Antitrust Act contains two sections: Section 1 prohibits concerted action that unreasonably restrains trade; and Section 2 prohibits exploitation of monopoly power for the purpose of harming competition. A violation of Section 1 requires a formal or informal agreement between competitors. The amount of market power a defendant possesses is generally critical to an antitrust analysis. The percentage of market power a business must have to be deemed a monopoly depends upon the facts of each situation, but market shares of more than 40% generally raise monopoly concerns. Courts generally apply one of two types of analyses when evaluating whether an activity violates the Sherman Act: the rule of reason or the per se rule. Under a “rule of reason analysis” courts will balance the pro- and anticompetitive effects of the defendant’s conduct. Courts will apply the “per se rule” to certain activities such as price fixing, boycotting, and tying arrangements. Price fixing is an explicit or implicit agreement among competitors to affect price or the allocation of services. Boycotting is an agreement among competitors not to deal with another party. A tying arrangement is one where the purchase of one product is conditioned on the purchase of another and when the seller can force the buyer to purchase the tied product. Pharmacies have not been successful suing third-party and managed care plans under the Sherman Act, because courts have applied the “rule of reason analysis,” not the per se rule, finding that the relationship between the pharmacies and the plans is contractual and not resale price maintenance. PBMs are middlemen that manage the prescription drug portion of a health plan and have raised antitrust concerns based on who owns them and the apparent lack of transparency of their activities. The legality of a joint venture arrangement usually depends upon the degree of market share involved and the purpose of the venture. Because PPOs consist of competitors, they must be careful to not engage in prohibited activities such as price fixing or boycotting. PSAOs (PPOs) are critical to allowing independent and small chain pharmacies to compete for third-party prescription plans. Purchasing cooperatives are generally procompetitive; however, if a cooperative has significant market share, it must be cautious about excluding or expelling members as well as how it conducts business with sellers. Individual and collective actions to influence government action are immune from antitrust liability. The Robinson-Patman Act prohibits the discrimination in price between purchasers of like products when the effect might substantially injure competition, unless that discrimination is cost justified. Price discrimination is illegal under Robinson-Patman only if it occurs between competing buyers. The Nonprofit Institutions Act exempts nonprofit entities from the Robinson-Patman Act when the purchases are for the entity’s “own use.” In the Portland Retail Druggists decision, the U.S. Supreme Court specified what activities by a hospital pharmacy constitute “own use” and what activities do not. A federal court has determined that Kaiser, as an HMO, is a nonprofit institution and the use of its products for its enrollees (ambulatory or inpatient) constitutes “own use.” A defense to price discrimination, called the meeting competition defense, exists when the seller in good faith extends a particular price to a buyer to meet what the seller believes is the price offered to the buyer by a competitor seller. Community retail pharmacies are precluded from the low prices that brand name drug manufacturers offer to managed care plans, PBMs, and mail-order firms on the basis that community retail pharmacies cannot affect market share. Litigation efforts by community pharmacies under both the Sherman Antitrust Act and Robinson-Patman Act litigation have not achieved much success. Module 8 64B16-28.100 Pharmacy Permits – Applications and Permitting This section addresses the application and permitting requirements of business Application & Permitting Requirements for your (pharmacy) business establishments regulated under Chapter 465, F.S. Any establishment that is Apply to FL Board of Pharmacy (BOP) required to have a permit shall apply to the board for the appropriate permit on forms indicated in this rule. Applications and forms referenced in this section $250 Initial Permit Fee Required w/ Application (payable to FL may be accessed or downloaded from the web at BOP) http://www.doh.state.fl.us/mqa/pharmacy or may be obtained by contacting the Board the Board of Pharmacy, at 4052 Bald Cypress Way, Bin #C04, Tallahassee, Florida 32399-3254, or (850)488-0595. Inquiries regarding the status of the application or license verification may be obtained at http://www.FLHealthsource.com. The application must be accompanied with a $250 initial permit fee, payable to the Board. (1) All Permits: A permit is valid only for the name and address to which it is issued. The name in which the permit is issued must be the name in which the (1) All Permits: Permit is valid only for the name & address of the company is doing business, i.e., the name that appears on purchase and sales permit is issued to (i.e. the name on the purchase & sales invoices) invoices. (a) Permit only for 1 entity at a Single Location ® A contiguous (a) A permit shall be issued only to a single entity at a single location. The area (e.g. no roads going through it), Area ≤ ½ Mile from central u service provided by the permit shall be consistent with the issued permit. A location of the permit single location shall be defined as: (b) Can change the name on the permit if you notify the BOP using 1. A contiguous area under the control of the permit holder. For purposes of this original Form DH-MQA 1227 “Pharmacy Permit Name Change rule, a public thoroughfare will be considered to have not broken the area of Form” contiguity; and, 2. An area not more than one half (1/2) mile from the central location of the (c) Each Applicant must file Fingerprint Cards & $48 Fee for each - permit. person who submits an application (b) The name in which a permit is issued may be changed upon notification to Non-Resident Pharmacy Registration applicant does not need the board. To change the name in which a permit is issued the person or to submit fingerprints w/ application establishment must file with the board an original Form DH-MQA 1227 (d) Must pass an On-Site - Inspection before permit will be issued if “Pharmacy Permit Name Change Form” effective December 2010, which is initial application, change in ownership, or change of incorporated by reference herein, and is available at address http://www.flrules.org/Gateway/reference.asp?No=Ref-02297 or on the web at (e) Applicant’s written Policies & Procedures for preventing http://www.doh.state.fl.us/mqa/pharmacy. (c) Each applicant must file with the board a legible set of fingerprint cards and a Controlled Substance (CS) dispensing for fraudulent $48 fee for each person who submits an application meeting the requirements in representations or invalid practitioner-PT relationship must Section 465.022(3), F.S. An applicant may register demographic information be attached to the application and purchase fingerprint cards (FD-258) at http://http://www.fldoh.sofn.net/. If an m applicant chooses not to purchase a fingerprint card, the applicant must make sure the police or agency that rolls the fingerprints uses a FD-258 fingerprint card. A Non-Resident Pharmacy Registration applicant is not required to submit a legible set of fingerprints upon application. (d) Passing an on-site inspection is a prerequisite to issuance of a new permit, whether based on an initial application, change of ownership, or change of address. At the time of the on-site inspection, the board inspector will document the applicant’s compliance with all applicable rules and statutes. (e) Each applicant must attach to the application the applicant’s written policies and procedures for preventing controlled substance dispensing based on fraudulent representations or invalid practitioner-patient relationships. (2) Community Pharmacy Permit required for every location that (2) Community Pharmacy Permit as authorized by Section 465.018, F.S., is compounds, dispenses, stores, or sells drugs, or where Rxs are required for every location where medicinal drugs are compounded, dispensed, filled or dispensed outpatient stored, or sold or where prescriptions are filled or dispensed on an outpatient basis. Applicants for a community pharmacy permit must complete an (a) Form DH-MQA 1214, “Community Pharmacy Permit application for a permit using an original Form DH-MQA 1214, “Community Application and Information” required for Community Pharmacy Permit Application and Information,” effective August 2012 which is Pharmacy Permit incorporated by reference herein and is available at (b) If Dept. Manager change ® Permittee & New Rx Dept. Manager http://www.flrules.org/Gateway/reference.asp?No=Ref-02298. shall notify BOP within 10 days of change (a) Applicants for a Community Pharmacy Permit must: - (c) Policy & Procedures shall contain how to ¯ CS dispensing if 1. Comply with all permitting requirement found in subsection (1) of this rule; and, it’s a bullshit Rx or bullshit Practitioner-PT relationship ® Shall 2. Designate a prescription department manager as required by Section provide: 465.018, F.S.; 1. How to guard against bullshit Practitioner-PT relationships (b) The permittee and the newly designated prescription department manager 2. How to guard against filling bullshit/fake Rxs for CSs shall notify the board within 10 days of any change in the prescription 3. How to ID Rxs that are communicated/transmitted legally department manager using an original Form DH-MQA PH10, “Prescription 4. How to ID forged/altered Rxs Department Manager Change,” effective December 2010, which is incorporated by reference herein and is available at http://www.flrules.org/Gateway/reference.asp?No=Ref-02299. (c) The policy and procedure manual for Community Pharmacies shall contain the procedures implemented to minimize the dispensing of controlled substances based on fraudulent representations. The policy and procedural manual shall provide the following: 1. Provisions to identify and guard against invalid practitioner-patient relationships. 2. Provisions to guard against filling fraudulent prescriptions for controlled substances. 3. Provisions to identify prescriptions that are communicated or transmitted legally. 4. Provisions to identify the characteristics of a forged or altered prescription. (3) Institutional Pharmacy Permits as authorized by Section 465.019, F.S., is (3) Institutional Pharmacy Permits ® use Form DH-MQA 1215, required for any location in any health care institution where medicinal drugs are “Institutional Pharmacy Permit Application and Information” compounded, dispensed, stored or sold. Applicants for a Institutional Pharmacy permit must complete an application for a permit using an original Form DH- MQA 1215, “Institutional Pharmacy Permit Application and Information,” (a) Applicants must: Comply w/ permitting requirements & effective August 2012, which is incorporated by reference herein and is designate a Consultant Pharmacist of record available at http://www.flrules.org/Gateway/reference.asp?No=Ref-02300. (b) Notify BOP within 10 days if change in Consultant Pharmacist (a) Applicants for an Institutional Pharmacy Permit must: 1. Comply with all permitting requirement found in subsection (1) of this rule; 2 and, 2. Designate a consultant pharmacist of record as required by Section 465.019, F.S. (b) The Board shall be notified in writing within 10 days of any change in the consultant pharmacist of record using an original Form DH-MQA 1184, “Change of Consultant Pharmacist of Record,” effective December 2010, which is incorporated by reference herein and is available at http://www.flrules.org/Gateway/reference.asp?No=Ref-02301. (4) Nuclear Pharmacy Permit as authorized by Section 465.0193, F.S., is (4) Nuclear Pharmacy Permit for Radioactive drugs ® Use Form DH- required for every location where radioactive drugs and chemicals within the MQA 1218, “Nuclear Pharmacy Permit Application and Information” classification of medicinal drugs are compounded, dispensed, stored, or sold. (a) Must designate a Nuclear Pharmacist Applicants for a Nuclear Pharmacy permit must complete an application for a (b) Notify BOP within 10 days if change in Rx Dept. Manager permit using an original Form DH-MQA 1218, “Nuclear Pharmacy Permit um Application and Information,” effective August 2012, which is incorporated by reference herein and is available at http://www.flrules.org/Gateway/reference.asp?No=Ref-02302. (a) Applicants for a Nuclear Pharmacy Permit must: 1. Comply with all permitting requirement found in subsection (1) of this rule; and, 2. Designate a nuclear pharmacist of record as required by Section 465.0193, F.S. (b) The permittee and the newly designated prescription department manager shall notify the board within 10 days of any change in the prescription department manager using an original Form DH-MQA PH10, “Prescription Department Manager Change,” effective December 2010. (5) Special Pharmacy Permits ® Not a Community, Institutional, (5) Special Pharmacy Permits as authorized in Section 465.0196, F.S., is required for any location where medicinal drugs are compounded, dispensed, Nuclear, or Internet Pharmacy stored, or sold and which are not a community pharmacy, institutional Includes Limited Community, Parenteral and Enteral, Closed pharmacy, nuclear pharmacy or internet pharmacy. Applicants for a Special- System Pharmacy, End Stage Renal Disease (ESRD), Limited Community, Special – Parenteral and Enteral, Special – Closed System Parenteral/Enteral Extended Scope, & Assisted Living Facility (ALF) Pharmacy, Special – End Stage Renal Disease (ESRD), Special – (a) Must designate an Rx Dept. Manager or Consultant Pharmacist Parenteral/Enteral Extended Scope, and Special – Assisted Living Facility (ALF) (b) Notify BOP within 10 days if change in Rx Dept. Manager - permits must complete an application for a permit using an original Form DH- (c) Notify BOP within 10 days if change in Consultant Pharmacist MQA 1220, “Special Pharmacy Permit Application and Information,” effective - (d) Type of Special Pharmacy Permits: August 2012, which is incorporated by reference herein and is available at http://www.flrules.org/Gateway/reference.asp?No=Ref-02303. 1. Limited Community: Institutional Class II that dispenses to (a) Applicants for a Special Pharmacy Permit must: employees, medical staff, ER PTs, any other PTs on 1. Comply with all permitting requirement found in subsection (1) of this rule; continuation of a course of therapy and, 2. Parenteral & Enteral: For IV, Enteral, & Cytotoxic Pharmacy 2. Designate a prescription department manager or consultant pharmacist of Services to outpatients – may be standalone or combined w/ record as required by Section 465.0196, F.S. Community Pharmacy or Special Closed System permits (b) The permittee and the newly designated prescription department manager Must also have 24-hr Telephone access shall notify the board within 10 days of any change in the prescription department manager using an original Form DH-MQA PH10, “Prescription 3. Closed System: Not open to public ® Rxs individually Department Manager Change,” effective December 2010. prepped for Nursing Homes, Jails, ALFs, Intermediate Care (c) The Board shall be notified in writing within 10 days of any change in the Facility/Mentally Retarded (ICF-MRs) or other custodial care consultant pharmacist of record using an original Form DH-MQA 1184, “Change facilities ® Cannot provide meds to inpatients in a hospital of Consultant Pharmacist of Record,” effective December 2010. 4. ESRD: Dialysis products & supplies for self-administration at (d) The Board recognized the following types of Special Pharmacy permits: home or specified address 1. Special Limited Community Permit may be obtained by an Institutional Class 5. Parenteral/Enteral Extended Scope: For compounding PT- II Pharmacy that dispenses medicinal drugs to employees, medical staff, specific Parenteral/Enteral preparations in conjunction w/ emergency room patients, and other patients on continuation of a course of therapy. Institutional Pharmacy Permits compounding for hospitals 2. Special Parenteral and Enteral Permit is required to provide parenteral (IV), 6. ALF: Optional license for ALFs providing Unit-Dose enteral, and cytotoxic pharmacy services to outpatients. The applicant must be Packaging to deliver meds compliant with the Standard for Compounding Sterile Preparations found in Rule 64B16-27.797, F.A.C. Special – Parenteral and Enteral Pharmacy Permits may stand-alone or be used in conjunction with a Community Pharmacy or Special – Closed System Pharmacy Permit. The permittee must provide 24-hour telephone accessibility. 3. Special Closed System Pharmacy Permit is not open to the public and prescriptions are individually prepared for dispensing utilizing closed delivery systems, for ultimate consumers in health care institutions including nursing homes, jails, ALF’s, Intermediate Care Facility/Mentally Retarded (ICF-MR’s) or If dept manager changes. day other custodial care facilities when defined by AHCA rules which the Board may S within 10 notify approve. This permit may not provide medications to in-patients in a hospital. 4. Special Pharmacy – End Stage Renal Disease (ESRD) Permit is a type of > - special pharmacy which is limited in scope of pharmacy practice to the provision of dialysis products and supplies to persons with chronic kidney failure for self- administration at the person’s home or specified address. 5. Special Pharmacy – Parenteral/Enteral Extended Scope Permit is required for pharmacies to compound patient specific parenteral/enteral preparations in conjunction with institutional pharmacy permits, provided requirements set forth herein are satisfied. 6. Special – Assisted Living Facility (ALF) Permit is an optional facility license for those Assisted Living Facilities providing a drug delivery system utilizing medicinal drugs provided in unit dose packaging. (6) Internet Pharmacy Permit as authorized by Section 465.0197, F.S., is required for any location not otherwise licensed or issued a permit under this &only chapter, within or outside this state that uses the Internet to communicate with (6) Special Internet Pharmacy Permit: Any pharmacy that uses or obtain information from consumers and uses the information to fill or refill Internet to fill, dispense, etc. prescriptions or to dispense, distribute, or otherwise engage in the practice of pharmacy in this state. Applicants for an Internet Pharmacy permit must (a) Must designate an Rx Dept. Manager or Consultant Pharmacist complete an application for a permit using an original Form DH-MQA 1220, (b) Must notify BOP within 30 days of change in location, “Special Pharmacy Permit Application and Information,” effective August 2012. corporate officers, & pharmacist serving as Rx Dept. (a) Applicants for an Internet Pharmacy Permit must: Manager 1. Comply with all permitting requirement found in subsection (1) of this rule; thats day and, 2. Designate a prescription department manager or consultant pharmacist of one record as required by Section 465.0197, F.S. (b) As set forth in Section 465.0197, F.S., the permittee shall notify the board within 30 days of any change of location, corporate officers, and the pharmacist serving as the prescription department manager using an original Form DH- MQA PH10, “Prescription Department Manager Change,” effective December 2010. (7) Special Sterile Compounding Permit: Except those pharmacies which already hold an active standalone Special Parenteral/Enteral or Special Parenteral/Enteral Extended Scope Compounding permit, any pharmacy (7) Special Sterile Compounding Permit: Necessary to compound engaged in sterile compounding must obtain a special sterile compounding sterile products if no Special Parenteral/Enteral or permit by filing an application on form DH-MQA 1270, “Special Sterile Compounding Permit Application and Information,” effective May 2013, which is Parenteral/Enteral Extended Scope Compounding permit already incorporated by reference herein and is available at (a) Irrelevant since it’s way after March 2014 http://www.flrules.org/Gateway/reference.asp?No=Ref-03142. (b) Must designate an Rx Dept. Manager or Consultant Pharmacist (a) All applicants that hold an active pharmacy permit that are currently engaged (c) Notify BOP within 10 days if change in Rx Dept. Manager or in sterile compounding have 180 days from the effective date of this amendment Consultant Pharmacist (eff. 9/23/13) to obtain a Special Sterile Compounding Permit. All pharmacies, which obtain the permit within the 180 days, on or before March 21, 2014, are exempt from paying an additional application or license fee. (b) Applicants for a Special Sterile Compounding Permit must: 1. Comply with all permitting requirements in subsection (1) of this rule, 2. Designate a prescription department manager or consultant pharmacist of record. (c) The permittee and the newly designated prescription department manager of record or consultant pharmacist of record shall notify the board within 10 days of any change in the prescription departme