A group of independent pharmacies filed a lawsuit against OptumRx alleging various unfair/illegal business practices, such as reimbursements below cost,  price manipulations, discriminatory treatment. Mark Cuker of the Jacobson Law Group filed the case in Pennsylvania and Illinois on behalf of independent pharmacies, and he is looking into filing a similar action in California.

This is not the first case filed by Mark, in which he represents the interest of independent pharmacies. In 2015, he filed a similar action against Catamaran for breach of contract and bad faith in setting prices for prescription drugs. Most of the pharmacies, however, had an arbitration clause in their contracts with Catamaran. Only one pharmacy had no arbitration clause and continued with the litigation.

Later in the proceedings, the Court found that the factual allegations were enough to establish a plausible claim that the MAC pricing appeals were not reasonable and were conducted “arbitrarily, capriciously, or in a manner inconsistent with the reasonable expectations of the parties.”

Subsequent to the court’s decision, the pharmacy added two additional claims against OptumRx: (1) setting reimbursement prices below acquisition costs; (2) failure to set a single reimbursement for similar drugs. The case is currently in its discovery stage.

The present 2020-case against Optum also alleges below-cost reimbursements, which are arbitrary and unilaterally set by Optum unrelated to the actual wholesale price. The lawsuit also alleges unfair business practices relating to (1) billing plans for brands but reimbursing pharmacies for generic; (2) paying independent pharmacies less than what it pays large chains or its own mail order pharmacy. We will continue covering the case as it advances through litigation.

Mark also plans to bring a similar action in California, which is a favorable forum due to our strong precedent on “Unfair Competition and Unfair Business Practices” litigation, as well as California’s MAC law. If you are interested in participating in such an action in California, please contact Mark Cuker at (215) 531-8522.

 

Recently, I’ve been inundated with offers to purchase N95 masks and PPE, as well as with offers to order COVID test-kits. Most of these offers come through my firm’s website and I suspect it is because my website has “pharmacy” written all over it. After reading the APhA’s article on new scams targeting pharmacies, I realized that a reason why I receive these offers is because I work with pharmacies. Apparently, pharmacies are dealing with more scams during the COVID-outbreak due to  their unique position to distribute needed medications, offer treatment, and advise on prevention. Therefore, many scammers or substandard companies (e.g. unlicensed wholesalers) target pharmacies hoping that their offers could not be resisted due to the desperate situation many communities experience.

Below is the summary of the APhA’s article regarding scams targeting pharmacies.  The article explains red flags and prevention techniques. First of all, potential scammers may reach your pharmacy offering to sell:

  1. Fake or substandard N95 masks
  2. COVID-19 vaccine
  3. COVID test-kits
  4. Drugs preventing or treating COVID infections

Note: I would like to add offers to assist with small business loans.

The APhA reminds of the following red flags to spot a scam:

  1. An offer that is too good to be true;
  2. Offering products that are in short supply;
  3. Offers from unknown sources;
  4. Requesting personal or confidential information.

To verify whether you received a legitimate offer, verify if a product offered for sale is FDA approved ( you can check FDA’s approval for drugs here).

To avoid pharmacy scams, discuss the red flags with your staff and explain reporting requirements (to FDA, FTC, and FCC).

Remember, you can spot most of scams by paying close attention to the way the offer is made (professionalism, price, method of communication, sense of urgency, etc.). Always verify the source and keep in mind state and federal laws/regulations that come into play (such as HIPAA, wholesale licensed distribution, etc.).

Recently I was reviewing client’s compliance on sending advertisements via fax.  Because the pharmacy industry is still extensively utilizing fax machines (and e-faxes), I decided to remind how to properly send promotional materials through fax.

First of all, a recent case prompted my compliance review. Last year, a doctor filed a legal action against a pharmacy who advertised its services and products by fax. Dr. Katz brought a class action against Benzer pharmacy for violating the Telephone Consumer Protection Act (“TCPA”).

The TCPA forbids sending unsolicited advertisement for goods or services via facsimile without the recipients’ prior express invitation and to recipients with whom the sender does not have an established business relationship. The TCPA requires that even if you send fax advertisements to those with whom you have an established business relationship, the fax must include an opt-out notice. In order to comply with the TCPA’s Opt-Out Notice requirements, each fax advertisement must include all of the following:

  • Clear and conspicuous language on the first page stating that recipients may opt out from receiving any further fax communication;
  • A toll free phone number (or any other no-cost method) that the recipient may use to submit an opt-out request.

The TCPA provides for statutory damages in the amount of $500 – $1,500 per violation.

In the Benzer Pharmacy case, the pharmacy was fax-blasting advertisements of its services to many prescribers with whom it had no prior contact or established business relationship (red flag No. 1). In addition, its faxes had no opt-out language (red flag No. 2).  As a result, the pharmacy is now in the middle of a very expensive litigation (to remind, this is a class action with many complex legal issues).

To avoid similar problems, review how and to whom you send faxes, and whether any of your faxes could be classified as “advertisement.” Does your fax (if it is an advertisement) contain an opt-out notice on the first page of the fax? If so, does the notice list a toll-free number to opt out. Do you send faxes only to the established business contacts?

California bonus: If you are located in California, even more stringent rules apply (no surprises here). California law requires an express permission to fax advertisement even if you are faxing to your established business contacts.

 

Pharmacists – being the most accessible healthcare providers – can prove to be invaluable during the current pandemic.  With the passage of the Public Readiness and Emergency Preparedness Act (PREPA), pharmacists now can order and provide COVID-testing. Many pharmacies have already started providing testing through their drive-up stations and home visits to quarantined patients.

Why is this a crucial time for pharmacists?

Because pharmacists are not recognized by the federal government as health care providers, they could not be reimbursed by Medicare or Medicaid for providing medical services. Without the PREPA, pharmacists would not have been able to offer COVID-testing. With the passage of PREPA, the federal government specifically acknowledged the role pharmacists play in public-health emergencies. See “Guidance for Licensed Pharmacists, COVID-19 Testing, and Immunity under the PREP Act.” Please note that it is still unclear how pharmacies should bill for testing.

Another constructive move was the inclusion of pharmacists in Helping Emergency Responders Overcome Emergency Situations (HEROES) Act of 2020. Initially it did not include pharmacists, which changed after various pharmacists advocacy groups stepped in.

These developments and acknowledgement of pharmacists as healthcare providers on the federal level may change the playing field in terms of pharmacy reimbursement (where pharmacies may be reimbursed for direct patients care services) and potentially could lead to a provider status.

Thank you to all the pharmacists and other healthcare providers that are on the frontlines of the pandemic!

 

 

On March 10, 2020, CMS issued guidance to Part D sponsors urging them to relax some of the requirements that could disrupt access to medications due to the coronavirus outbreak. It recommended that Part D sponsors take the following steps:

  • Relax “Refill-Too-Soon” and provide maximum extended day supply;
  • Reimburse beneficiaries for prescriptions obtained from out-of-network pharmacies;
  • Allow and reimburse pharmacies for home or mail deliveries;
  • Waive prior authorization for drugs to treat or prevent COVID-19.

Most of PBMs are following this guidance or discussing the guidance with plan sponsors. For example:

Express Scripts, Inc (ESI) published a notice to pharmacies explaining the following changes due to COVID-19:

  • Pharmacies may override early refills. ESI cautions that overrides will be monitored and may be audited. It also requires that all documentation of the circumstances for the Refill Too Soon (RTS) override to be documented on the prescription or within the prescription’s annotation notes.
  • Signature requirements. Pharmacies within the ESI network are not required to obtain signatures from patients during the COVID-19 pandemic, unless required by law (such as for home dialysis drugs/devices, sale of products containing ephedrine, pseudoephedrine & PPA that could be used to manufacture methamphetamine). ESI recommends to document delivery or dispensing in other ways, such as log entry, the cash register receipt that includes prescription numbers, a text message or email from the patient, a note on the hard copy, or an electronic annotation.

OptumRx

  • Mail orders. Due to the COVID-19 pandemic, on March 10, 2020, OptumRx suspended its mailing prohibition. This suspension applies directly to retail pharmacies who require shipping or mailing of medications via common carrier to members and does not apply to central fill operations.
  • Signature requirements. Additionally, OptumRx has temporarily waived the signature requirement of mailed medications. It recommends to include the verbiage “Impacted by COVID-19” on the delivery logs. If medications are picked up, then the signature logs of impacted claims should be documented with the verbiage “Impacted by COVID-19” and initialed by the pharmacy staff. It further clarifies that audit teams have been instructed to waive the signature requirement for delivered and picked up prescriptions filled on and after March 1, 2020 with the aforementioned documentation.

Caremark.

Caremark announced that it is working with plans to offer 90-day supply for non-specialty medications. It also sent a notice to pharmacies that Caremark will be temporarily allowing pharmacies to document the word “COVID” on its signature log with delivery date and delivery time for retail pharmacy patients that choose not to directly sign. If the pharmacy is delivering the Covered Item directly to the patient’s home, document by writing “COVID Delivery” when capturing direct signature is not possible.

 

Pharmacies may also reach out to PBMs and PSAOS regarding additional waivers or individual waivers depending on the pharmacy’s community and needs.

Federal law requires an in-person medical evaluation before a practitioner may prescribe a controlled substance. Some exceptions, however, exist. One of them is a declared public health emergency.

On January 31, 2020, the Secretary of the Department of Health and Human Services issued such a public health emergency.

On March 16, 2020, the Secretary and the Acting DEA Administrator announced that practitioners may prescribe controlled substances via Telehealth in all areas of the United States. Accordingly, as long as the Secretary’s designation of a public health emergency remains in effect, DEA-registered practitioners in all areas of the United States may issue prescriptions for controlled substances to patients without an in-person evaluation provided all of the following conditions are met:

  • The prescription is issued for a legitimate medical purpose by a practitioner acting in the usual course of his/her professional practice;
  • The telemedicine communication is conducted using an audio-visual, real-time, two-way interactive communication system; and
  • The practitioner is acting in accordance with applicable Federal and State laws.

The practitioner may issue a prescription either electronically (for schedules II-V) or by calling in an emergency schedule II prescription to the pharmacy, or by calling in a schedule III-V prescription to the pharmacy.

DEA further clarifies: If the prescribing practitioner has previously conducted an in-person medical evaluation of the patient, the practitioner may issue a prescription for a controlled substance after having communicated with the patient via telemedicine, or any other means, regardless of whether a public health emergency has been declared, so long as the prescription is issued for a legitimate medical purpose and the practitioner is acting in the usual course of his/her professional practice. In addition, for the prescription to be valid, the practitioner must comply with applicable Federal and State laws.

 

 

So far, the California State Board of Pharmacy has issued the following waivers relaxing some requirements due to the coronavirus outbreak:

  1. Sterile compounding renewal requirements for facilities located within a hospital

This waiver provides that a sterile compounding pharmacy whose license expires on or before May 1, 2020, may have its license renewed without being subject to the renewal requirements. The sterile compounding facility must be located within a hospital or satellite location regulated by the California Department of Public Health and issued a General Acute Care Hospital License and be in good standing with the Board of Pharmacy.

  1. Drug acquisition from an unlicensed supplier

This waiver provides that a California-licensed pharmacy may receive dangerous drugs and dangerous devices from an unlicensed pharmacy, wholesaler, or third-party logistics provider located in another state to alleviate a temporary shortage of a dangerous drug or device that could result in the denial of health care as long as:

  • The unlicensed location is appropriately licensed in its home state, and documentation of the license verification is maintained by the California pharmacy.
  • The pharmacy maintains documentation of the temporary shortage of any dangerous drug or device received from any pharmacy, wholesaler, or third-party logistics provider not licensed in California.
  • The pharmacy complies with all record-keeping requirements for each dangerous drug and device received from any pharmacy, wholesaler, or third-party logistics provider not licensed in California.
  • All documentation and records required above shall be maintained and readily retrievable for three years following the end of the declared emergency.
  • The dangerous drug or device was produced by an authorized FDA registered drug manufacturer.

3.     Staffing Ratio of Pharmacists to Intern Pharmacists and Technicians

The ratio of pharmacists to intern pharmacists and to technicians may increase to allow for one additional pharmacy intern or technician for each supervising pharmacist as long as the pharmacy documents the need for the ratio modification due to the COVID-19 public health emergency. Examples of documentation may include, but are not limited to, an increased prescription volume or limitation on staff availability because of quarantine.

4.     Remote Processing

Pharmacists are permitted to conduct remote processing. Pharmacy interns and pharmacy technicians are also permitted to conduct nondiscretionary tasks related to remote processing.

The waiver provides that:

  • a California-licensed pharmacy may allow staff to engage in remote processing provided the pharmacy has policies and procedures that outline the authorized functions to be performed.
  • Policies and procedures must include methods for protecting the confidentiality and integrity of patient information and must expressly prohibit the printing or storage of protected health information on a device that is outside of the licensed pharmacy.
  • A pharmacy must ensure that any pharmacist performing remote processing shall have secure electronic access to the pharmacy’s patient information system and to other electronic systems that an on-site pharmacist has access to when the pharmacy is open.
  • Each remote entry record must comply with all record keeping requirements for pharmacies, including capturing the positive identification of the pharmacist involved in the remote review and verification of a medication order or prescription.
  1.     Signature requirement for receipt of delivery of drugs

This waiver applies only to the signature requirement for the pharmacist accepting delivery. It waives the signature requirement for the receipt of the delivery of drugs as required by California law under the following conditions:

  • The delivery personnel confirm that the employee accepting the delivery is a pharmacist.
  • The delivery personnel input the pharmacist’s name and license number conveyed to them by the pharmacist directly into their signature capture device in lieu of the pharmacist physically signing the tablet as part of the delivery process.

6.     Requirement for consulting pharmacist to make quarterly visits to clinic

It waives the requirement for a consulting pharmacist to perform quarterly visits to a clinic under the following conditions:

  • The consulting pharmacist, using his or her professional judgment, determines that the quarterly inspection is not required during the declared emergency.
  • When making such a determination, it may be appropriate to consider prior consultation report findings, potential impact to patients receiving care in the clinic, etc.
  • A consulting pharmacist performs a desk audit of the clinic’s procedures and records in lieu of the visit.
  • A consulting pharmacist generates a report outlining any findings resulting from the desk audit and provides that report to the professional director or his or her designee.
  • The consultant receives confirmation to his or her satisfaction, that the corrections outlined in the findings of the audit have been made.
  1.    Reuse of personal protective equipment (PPE)

The waiver allows masks and gowns to be reused by staff performing sterile compounding under the following conditions:

  • The pharmacist-in-charge has made a determination that the current and potential stock of PPE on hand is insufficient to maintain the single-use provisions established in USP 797.
  • The pharmacy has developed a policy that details the conditions under which PPE may be reused.  Such policies shall be consistent with standards of practice used during emergency situations.
  • Documented training on the policy is provided to all staff.
  • Master formulas are evaluated to determine if changes are necessary to the criteria for establishing beyond-use dating.
  • Surface sampling schedule was reviewed for the possible need to increase the frequency.
  • Documentation is maintained indicating the duration of time the pharmacy is operating under the waiver approval.
  1.    Provision related to use of alcohol sanitizer before donning sterile gloves

This waiver allows for hand cleaning with the use of non-persistent activity alcohol sanitizer prior to donning sterile gloves.

The waivers could be found on the California Board of Pharmacy website. 

Many prescribers’ offices are closed due to the coronavirus outbreak, leaving many pharmacies unable to obtain fill authorizations for patients.

Under California law, pharmacies may refill prescriptions without prescriber authorization if:

 

  • the prescriber is unavailable to authorize the refill;
  • in the pharmacist’s professional judgment, failure to refill the prescription might interrupt the patient’s ongoing care and have a significant adverse effect on the patient’s well-being.

Under Cal. Bus. & Prof. Code 4064, when dispensing under the above circumstances, the pharmacist must

  • inform the patient that the prescription was refilled pursuant to emergency-fill regulations;
  • inform the prescriber within a reasonable period of time of any refills dispensed pursuant to this section;
  • make every reasonable effort to contact the prescriber and document the attempts to contact the prescriber’s office.

In case of a follow-up audit or an inspection, documentation would be essential in showing that the pharmacy complied with California law in dispensing medications without obtaining prescriber’s authorization (especially in cases of controlled substances). Therefore, pharmacies are advised to make a note in the patient profile that the drug was dispensed per Cal. Bus. & Prof. Code 4064 and “The drug is essential to sustain the life of the patient or continue therapy for a chronic condition of the patient” or “Failure to dispense or sell the drug to the patient could result in harm to the health of the patient.”

Emergency dispensing of controlled substances (Schedule III – V) is usually limited to 72-hour supply or up to a thirty-day supply for a non-controlled dangerous drug.

California Law also provides that a “pharmacist may in good faith furnish a reasonable supply of dangerous drugs/devices to patients in emergency conditions without a prescription.” (Bus. & Prof. Code 4062 and Health & Safety Code 11167).

The Board of Pharmacy has issued a guidance on dispensing without prescription, recognizing that during emergencies or disasters, patients might not be able to produce prescription documents and it might be impossible to contact a prescriber. “To enable these patients to obtain medications needed to prevent the loss of life, intense suffering or interruption in therapy, the board advises pharmacists to exercise their professional judgment on whether to provide a reasonable quantity of medications to prevent untoward symptoms resulting from a lapse in therapy. To establish the legitimacy and accuracy of the requested medications, the pharmacist may want to consider the following:

  • Is the original prescription container(s) available?
  • Does the patient have any written prescriptions with him or her?
  • Can a prescriber with knowledge about the patient be reached?
  • Can the dispensing pharmacy be contacted? Other options to assist the patient can include a referral to an urgent care center for evaluation and new prescriptions, or to the local county emergency medical services center for a listing of available medical services in the area.”

When dispensing medications in an emergency situation, records must be maintained that include the name of the patient, the patient’s local address, the name of the prescriber, and the name, strength, dose, directions, and quantity of the medication(s) and dangerous devices dispensed and the date dispensed.

Take care and stay healthy!

 

 

We are very excited to announce a launching of a website for pharmacy compliance: RxPolicy. It assists pharmacies with ever-growing compliance requirements. Pharmacies can download the pharmacy operational manual in full with automatic yearly updates or can just pick one policy. Policies will be updated on a yearly basis and new policies and documents to be added to comply with new requirements. At the moment, we are covering only California and federal/PBM requirements but we are expanding into other states. California policies – which are sent to pharmacies in Word via a downloadable link – could be used as templates for pharmacies located in other states (policies must be edited to reflect different states’ requirements).

The idea to create a compliance platform arose when we had too many requests from clients to provide compliance documents required by new PBM manuals (such as a cultural competency training or PA agreements). Such documents are usually not a part of the pharmacy manual. There are other platforms providing compliance documents. Most of them, however, require yearly subscriptions and do not allow pharmacies to purchase only one policy. So we saw a need for a platform where pharmacies can obtain and customize various policies and documents. Each purchase comes with a 15-minute consultation to discuss customization.

Besides policies and procedures, additional documents are available from RxPolicy, such as prior authorization agreements, Board of Pharmacy inspection checklists, cultural competency training, and others. If you do not see what you are looking for, we want to hear from you.

 

 

 

 

In 2016, CMS published its Final Rule regarding Medicaid drug reimbursements for covered outpatient drugs. Under the Rule, each state Medicaid agency was required to adopt an actual acquisition cost (AAC) methodology for outpatient prescription drug reimbursement. To satisfy this requirement, California adopted CMS’s National Average Drug Acquisition Cost (NADAC) as the basis for AAC for drug ingredient reimbursement.

Per the Final Rule, the new reimbursement methodology became effective on April 1, 2017. California, however, did not update its claims processing system until much later (February 2019). As a result, the Department of Health Care Services (DHCS) plans to make retroactive adjustments (a.k.a. chargebacks) for impacted claims with dates of service from April 1, 2017 through the implementation date.

The implementation date, however, keeps changing. Originally, the DHCS announced the chargebacks in February 2019. But in May 2019, California pharmacies filed a lawsuit against the DHCS alleging irreparable harm to pharmacies and “a looming public health crisis” due to this new reimbursement methodology. Pending a hearing on the pharmacies’ injunction, the DHCS agreed to postpone the implementation of the chargebacks.

In October 2019, however, the DHCS informed California pharmacies of soon-to-be implemented chargebacks. As of today, the DHCS has not commenced the chargebacks. The California Pharmacists Association representing pharmacies in the underlying legal action recently announced that the DHCS is scheduled to resume the chargeback on February 13, 2020.  It is unclear whether the DHCS will further delay the recoupment.