Contracted
Pharmacy Services Model Agreement
(C)
Contract Pharmacy Services Revised
Final Mechanism
Covered entities that wish to utilize contract pharmacy services to dispense
section 340B outpatient drugs are encouraged to sign and have in effect a contract
pharmacy service agreement between the covered entity and the pharmacy. This
mechanism is designed to facilitate program participation for those eligible
covered entities that do not have access to appropriate ``in-house'' pharmacy
services. See Appendix for suggested contract provisions.
(1)
The following is a suggested model
agreement format:
(a)
The covered entity will purchase
the drug and assume responsibility
for establishing its price, pursuant
to the terms of a PHS grant (if applicable)
and any applicable consumer protection
laws.
A
``ship to, bill to'' procedure may be
used in which the covered entity purchases
the drug, the manufacturer bills the
entity for the drug that it purchased,
but ships the drug directly to the contract
pharmacy. See section 1 of Appendix.
(b)
The contractor will provide all pharmacy
services (e.g., dispensing, record keeping,
drug utilization review, formulary maintenance,
patient profile, counseling). Each covered
entity which purchases its covered outpatient
drugs has the option of individually
contracting for pharmacy services with
the pharmacy of its choice. The limitation
of one pharmacy contractor per entity
does not preclude the selection of a
pharmacy contractor with multiple pharmacy
sites, as long as only one site is used
for the contracted services. [The OPA
will be evaluating the feasibility of
permitting these covered entities to
contract with more than one site and
contractor.]
(c)
The covered entity health care provider
will inform the patient of his or her
freedom to choose a pharmacy provider.
If the patient does not elect to use
the contracted service, the patient may
obtain the prescription from the covered
entity and then obtain the drug(s) from
the pharmacy provider of his or her choice.
When
a patient obtains a drug from a retail
pharmacy other than the entity contract
pharmacy, the manufacturer is not required
to offer this drug at 340B pricing.
(d)
The contractor may provide the covered
entity services, other than pharmacy,
at the option of the covered entity (e.g.,
home care, reimbursement services). Regardless
of the services provided by the contractor,
access to 340B pricing will always be
restricted to only patients of the covered
entity.
(e)
The contractor and the covered entity
will adhere to all Federal, State, and
local laws and requirements. Additionally,
all PHS grantees will adhere to all rules
and regulations established by the grant
funding office.
Both
the covered entity and the contract pharmacy
are aware of the potential for civil
or criminal penalties if the covered
entity and/or the contract pharmacy violate
Federal or State law. [The Department
reserves the right to take such action
as may be appropriate if it determines
that such a violation has occurred.]
(f)
The contractor will provide the covered
entity with reports consistent with customary
business practices (e.g., quarterly billing
statements, status reports of collections
and receiving and dispensing records).
See Section 2 of Appendix.
(g)
The contractor, with the assistance of
the covered entity, will establish and
maintain a tracking system suitable to
prevent diversion of section 340B discounted
drugs to individuals who are not patients
of the covered entity. Customary business
records may be used for this purpose.
The covered entity will establish a process
for a periodic random (sample) comparison
of its prescribing records with the contractor's
dispensing records to detect potential
irregularities. See Section 3 of Appendix.
(h)
The covered entity and the contract pharmacy
will develop a system to verify patient
eligibility. [The Department's draft
guidance defining covered entity ``patient''
is set forth in an August 3, l995, Federal
Register notice. See 60 FR 39762.]Both
parties agree that they will not resell
or transfer a drug purchased at section
340B pricing to an individual who is
not a patient of the covered entity.
See section 340B(a)(5)(B). The covered
entity understands that it can be removed
from the list of covered entities because
of its participation in drug diversion,
a 340B(a)(5) prohibition, and no longer
be eligible for 340B pricing. See Section
4 of Appendix.
(i)
Both parties will not use drugs purchased
under section 340B to dispense Medicaid
prescriptions, unless the contract pharmacy
and the State Medicaid agency have established
an arrangement to prevent duplicate discounting.
(j)
Both parties understand that they are
subject to audits (by the Department
and participating manufacturers) of records
that directly pertain to the entity's
compliance with the drug resale or transfer
prohibition and the prohibition against
duplicate Medicaid rebates and 340B discounts.
See section 340B(a)(5).
The
contractor will assure that all pertinent
reimbursement accounts and dispensing
records, maintained by the contractor,
will be separate from the contractor's
own operations and will be accessible
to the covered entity, the Department,
and the manufacturer in the case of a
manufacturer audit.
(k)
Upon request, a copy of this contract
pharmacy service agreement will be provided
to a participating manufacturer which
sells covered outpatient drugs to the
covered entity. All confidential propriety
information may be deleted from the document.
[end
of page 43555]
In
negotiating and executing a contracted
pharmacy service agreement pursuant
to these guidelines, contractors and
covered entities should be aware of
and take into consideration the provisions
of the Medicare and Medicaid anti-kickback
statute, 42 U.S.C. 1320a-7b(b). This
statute makes it a felony for a person
or entity to knowingly and willfully
offer, pay, solicit, or receive remuneration
with the intent to induce, or in return
for the referral of, Medicare or a
State health care program business.
State health care programs are Medicaid,
the Maternal and Child Health Block
Grant program, and the Social Services
Block Grant program. Apart from the
criminal penalties, a person or entity
is also subject to exclusion from participation
in the Medicare and State health care
programs for a knowing and willful
violation of the statute pursuant to
42 U.S.C. 1320a-7(b)(7).
The
anti-kickback statute is very broad.
Prohibited conduct covers not only
remuneration intended to induce referrals
of patients, but also includes remuneration
intended to induce the purchasing,
leasing, ordering, or arranging for
any good, facility, service, or item
paid for by Medicare or a State health
care program. The statute specifically
identifies kickbacks, bribes, and rebates
as illegal remuneration, but also covers
the transferring of anything of value
in any form or manner whatsoever. This
illegal remuneration may be furnished
directly or indirectly, overtly or
covertly, in cash or in kind and covers
situations where there is no direct
payment at all, but merely a discount
or other reduction in price of the
offering of a free good(s).
Arrangements
between contractors and covered entities
that could violate the anti-kickback
statute would include any situation
where the covered entity agrees to
refer patients to the contractor in
return for the contractor agreeing
to undertake or furnish certain activities
or services to the covered entity at
no charge or at a reduced or below
cost charge. These activities or services
would include the provision of contracted
pharmacy services, home care services,
money or grants for staff or service
support, or medical equipment or supplies,
and the remodeling of the covered entity's
premises. For example, if a contractor
agreed to furnish covered outpatient
drugs in return for the covered entity
referring its Medicaid patients to
the contractor to have their prescriptions
filled, the arrangement would violate
the anti-kickback statute. Similarly,
if the contractor agreed to provide
billing services for the covered entity
at no charge in return for the covered
entity referring its patients to the
contractor for home or durable medical
equipment, the statute would be violated.
Pursuant
to the authority in 42 U.S.C. 1320a-7b(b)(3),
the Secretary of HHS has published
regulations setting forth certain exceptions
to the anti-kickback statute, commonly
referred to as "safe harbors." These
regulations are codified at 42 C.F.R.100.952.
Each of the safe harbors sets forth
various requirements which may be met
in order for a person or entity to
be immune from prosecution or exclusion
for violations of the anti-kickback
statute.
[end
of page Federal Register excerpts]
Two
of the safe harbors that may pertain
to arrangements between contractors
and covered entities involve discounts
and personal services or management
contracts.
Covered
entities that elect to utilize the
contracted pharmacy mechanism must
submit to the Office of Pharmacy Affairs
a self certification that they have
signed an agreement with the contracted
pharmacy containing the aforementioned
provisions. |
