Chapter 6 Federal Regulation of Pharmacy Practice

1. Chapter 6Federal Regulation of Pharmacy Practice

2. Objectives • Understand the provisions and requirements of OBRA-90 • Describe the requirements of HIPAA • Identify the basic and pharmacy-related provisions of Medicare and Medicaid • Recognize the application of the Medicare/Medicaid fraud and abuse laws

3. Objectives (cont’d) • Describe the application of the Sherman Antitrust Act to Pharmacy Practice • Describe the application of the Robinson-Patman Act to pharmacy practice.

4. OBRA-90 • Three major areas • Rebates • Demonstration Projects • DUR

5. OBRA-90 (cont’d) • Rebates • Manufactures required to provide drugs to Medicaid at their “best price.” • “Best price” is the lowest price at which the manufacturers sell the product to any customer.

6. OBRA-90 (cont’d) • Demonstration Projects • Determine if the outcomes of patient care improve and the costs decrease when pharmacists are paid to provide DUR services to patients.

7. OBRA-90 (cont’d) • DUR • Process has 3 components • Retrospective review • Educational programs • Prospective review

8. OBRA-90 (cont’d) • Prospective Review has 3 components • A screen of prescriptions before dispensing • Patient counseling by the pharmacist • Pharmacist documentation of relevant information

9. HIPAA • Goal is to improve the efficiency and effectiveness of the health care system • Targets four aspects of health information • Transaction and code sets • National provider identities • Security • Privacy

10. HIPAA (cont’d) • Who must comply? • “Covered Entities • Health Plans • Health Care Clearing Houses • Health Care Provide Conducting financial or administrative transactions electronically

11. HIPAA (cont’d) • Protected Information • Electronic information • All forms of health information that • relate to past, present, or future physical or mental health; the provision of care; or payment for care • Identify the patient or could reasonably be expected to identify the patient.

12. HIPAA (cont’d) • Notice of Privacy Practices • Intended use and disclosure of the information • Legal duties of the pharmacy to protect the confidentiality of PHI • Patient’s rights • Complaints • Contact person • Acknowledgement of Notice

13. HIPAA (cont’d) • Use and Disclosure • PHI can be used for treatment, payment, and operations (TPO) • Minimum Necessary Requirement • Patient • Other providers involved with the treatment • Authorized by the patient • When required by HHS for compliance and enforcement • When required by law

14. MEDICARE • Title XVIII of the Social Security Act • Provides for federal health insurance for those older than 65 years of age and for certain disabled individuals, regardless of age. • Part A—hospitalization insurance • Part B—medical expenses

15. MEDICARE (cont’d) • Prescription Drug Benefit Program • Discount cards until 2006 • Disease Management Programs termed medication therapy management programs—pharmacists to receive payment to those patients with multiple chronic diseases and take multiple covered drugs which will likely exceed annual drug costs as determined by HHS.

16. MEDICARE (cont’d) • Conditions of Participation • Pharmacist supervision • Drugs locked up • No outdated drugs • Limited access to pharmacy when pharmacist not on duty • Drug problems reported to proper individuals or entities • Abuses and losses of controlled substances reported • Drug therapy information available to professional staff • Formulary system

17. MEDICAID • Title XIX of the Social Security Act • Provides for the health care costs of certain categories of indigents including • The blind • The aged • Members of families with dependent children • Based on individual’s income and assets.

18. Fraud and Abuse Statute • False statement of material fact in any application • Antikickback provision • Enforced by the Office of Inspector General (OIG)

19. Sherman Antitrust Act • Protects competition • Makes unlawful every contract, combination, or conspiracy in restraint of trade • Prohibits monopolies, attempts to monopolize, or conspiracies to monopolize

20. Sherman Antitrust Act (cont’d) Types of per se violations • Price fixing • Boycotting • Tying arrangements • Exclusive contracts • Joint ventures

21. Robinson-Patman Act • Unlawful to discriminate in price between purchasers of like products when the effect of the discrimination may substantially injure competition, unless the discrimination is cost justified • Pharmaceutical manufacturers sell products at different prices to different buyers (often termed preferential or differential pricing)