Chapter 6 Federal Regulation of Pharmacy Practice

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

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

OBRA-90 Three major areas Three major areas –Rebates –Demonstration Projects –DUR

OBRA-90 (cont’d) Rebates 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.

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

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

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

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

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

HIPAA (cont’d) Protected Information Protected Information Electronic information Electronic information All forms of health information that 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.

HIPAA (cont’d) Notice of Privacy Practices 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

HIPAA (cont’d) Use and Disclosure Use and Disclosure PHI can be used for treatment, payment, and operations (TPO) PHI can be used for treatment, payment, and operations (TPO) Minimum Necessary Requirement 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

MEDICARE Title XVIII of the Social Security Act 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. 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 A—hospitalization insurance Part B—medical expenses Part B—medical expenses

MEDICARE (cont’d) Prescription Drug Benefit Program Prescription Drug Benefit Program Discount cards until 2006 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. 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.

MEDICARE (cont’d) Conditions of Participation 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

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

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

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

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

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 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) Pharmaceutical manufacturers sell products at different prices to different buyers (often termed preferential or differential pricing)