Chapter 6
Federal Regulation of
Pharmacy Practice
Objectives
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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
Objectives (cont’d)
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Describe the application of the
Sherman Antitrust Act to Pharmacy
Practice
Describe the application of the
Robinson-Patman Act to pharmacy
practice.
OBRA-90
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Three major areas
– Rebates
– Demonstration Projects
– DUR
OBRA-90 (cont’d)
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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)
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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)
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DUR
Process has 3 components
– Retrospective review
– Educational programs
– Prospective review
OBRA-90 (cont’d)
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Prospective Review has 3 components
– A screen of prescriptions before
dispensing
– Patient counseling by the pharmacist
– Pharmacist documentation of relevant
information
HIPAA
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Goal is to improve the efficiency and
effectiveness of the health care system
Targets four aspects of health information
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Transaction and code sets
National provider identities
Security
Privacy
HIPAA (cont’d)
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Who must comply?
“Covered Entities
– Health Plans
– Health Care Clearing Houses
– Health Care Provide
Conducting financial or administrative
transactions electronically
HIPAA (cont’d)
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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.
HIPAA (cont’d)
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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)
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Use and Disclosure
PHI can be used for treatment, payment,
and operations (TPO)
Minimum Necessary Requirement
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Patient
Other providers involved with the treatment
Authorized by the patient
When required by HHS for compliance and
enforcement
– When required by law
MEDICARE
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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
MEDICARE (cont’d)
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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.
MEDICARE (cont’d)
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Conditions of Participation
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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
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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.
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Fraud and Abuse Statute
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False statement of material fact in any
application
Antikickback provision
Enforced by the Office of Inspector
General (OIG)
Sherman Antitrust Act
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Protects competition
Makes unlawful every contract,
combination, or conspiracy in restraint
of trade
Prohibits monopolies, attempts to
monopolize, or conspiracies to
monopolize
Sherman Antitrust Act
(cont’d)
Types of per se violations
 Price fixing
 Boycotting
 Tying arrangements
 Exclusive contracts
 Joint ventures
Robinson-Patman Act
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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)