Week 7: Medicaid, Medicare. EMTALA, and Anti-Trust Statutes

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Other Pharmacy Related Provisions of the Medicare Modernization Act (MMA) and Medicare Improvements for Patients and Providers Act (MIPPA) - drugs excluded from coverage

1. Non‐prescription drugs (OTC) 2. Drugs for the treatment of anorexia, weight loss or weight gain o Exception: drugs used to treat AIDS wasting and cachexia due to other diseases are not considered to be for cosmetic purposes and therefore are NOT excluded for these conditions. 3. Drugs used to promote fertility 4. Drugs used for cosmetic purposes or hair growth (Note: drugs to treat acne, psoriasis, rosacea and vitiligo are not considered cosmetic) 5. Drugs used for the relief of cough and cold symptoms 6. Drugs used for the treatment of sexual or erectile dysfunction (e.g., Viagra, Cialis, Levitra, and Caverject) except as medically necessary and approved by the FDA to treat conditions other than sexual or erectile dysfunction (i.e., Cialis for BPH) 7. Prescription vitamins and minerals (except prenatal vitamins, fluoride preparations, niacin products, and Vitamin D analogs when used for medically accepted indication) 8. Outpatient drugs that the manufacturer requires testing or monitoring 9. DESI drugs 10. Brand drugs (i.e., drugs with a FDA application type "NDA" or "BLA") that are not under a manufacturer discount agreement 11. Drugs purchased in another country 12. Drugs that may be covered under Part A or Part B of Medicare, even if coverage is not actually available

False Claims to either Medicare or Medicaid

False claims to either program made by pharmacies/pharmacists may result in serious disciplinary action (including expulsion from the Medicare, Medicaid programs and Federal Qualified Health Centers), imprisonment and fines. If found guilty of fraud - exclusion based on OIG list (available at: https://oig.hhs.gov/exclusions) - up to 10 years

Monopoly

only one supplier of a service, or a single business holding greater than 40% of the market share

AZ HB 2040 "Pharmacy Board, Definitions, Reporting" - awaiting governor's signature 4/11

Added definitions to the definition of pharmacy in ARS 32‐1901 and throughout. o ARS 32‐1901 (6): Automated Prescription‐Dispensing Kiosk" means a mechanical system that is operated as an extension of a pharmacy, that maintains all transaction information within the pharmacy operating system, that is separately permitted from the pharmacy and that performs operations that either: (a) accept a prescription or refill order, store prepackaged or repackaged medications, label and dispense patient‐specific prescriptions and provide counseling on new or refilled prescriptions. (b) dispense or deliver a prescription or refill that has been prepared by or on behalf of the pharmacy that oversees the automated prescription‐dispensing kiosk. o ARS 32‐1901 (20) "Day." Means business day. o ARS 32‐1901 (72) "Pharmacy." Added (b) includes a "satellite pharmacy." o ARS 32‐1901 (88) "Revocation" or "Revoke". Means the official cancellation of a license, permit, registration or other approval authorized by the board for a period of two years unless otherwise specified by the board. A request or new application for reinstatement may be presented to the board for review before the conclusion of the specified revocation period upon review of the executive director. Question - is the two‐year revocation a minimum? o ARS 32‐1901 (90) "Satellite Pharmacy." Means a work area located within a hospital or on a hospital campus that is not separated by other commercial property or residential property, that is under the direction of a pharmacist, that is a remote extension of a centrally licensed hospital pharmacy and that is owned by and dependent on the centrally licensed hospital pharmacy for administrative control, staffing and drug procurement and that is not required to be separately permitted. o ARS 32‐1930 "Types of permits; restrictions on permits; discontinuance of pharmacy permit." Section (A) (2) If approved by the board, a pharmacy, limited service pharmacy, automated prescription‐dispensing kiosk, full service wholesale drug, third‐party logistics provider, nonprescription drug wholesale, and drug manufacturer's permit Section (D) An automated prescription‐dispensing kiosk may not contain or dispense a controlled substance as defined in section 36‐ 2501 and the controlled substances act (PL91‐513; 84 Stat 1242, 21 USC Section 802). o ARS 32‐1931 "Permit fees"(C) (4) a limited service pharmacy permit or an automated‐dispensing kiosk permit, not more than five hundred dollars.

3. Women in Labor

All laboring patients are considered unstable and are thereby deemed to have an emergency medical condition. Stabilization may be achieved in any one of the following 3 ways: o The physician declares the labor to be false. o Labor ceases. o The infant and placenta are delivered. Transfer rules apply equally to women in labor. Therefore, a woman in labor who has not been stabilized (achieved delivery of infant and placenta) may be transferred only if the benefits of transfer outweigh the risks.

examples of fraud include:

Billing for nonexistent prescriptions Billing for the brand drug when a generic was dispensed Billing for prescriptions that are filled and never picked up Splitting prescriptions in order to receive additional dispensing fees Inappropriate use of dispense‐as‐written codes

Legality of Exclusive Contracts

Exclusive contracts are generally legal under anti‐trust laws o A contract in which a seller agrees to sell its product only to a particular buyer (think suppliers for Apple products)

Other Pharmacy Related Provisions of the Medicare Modernization Act (MMA) and Medicare Improvements for Patients and Providers Act (MIPPA) - 1. covered drugs and plan formularies established

Part D drugs must be: o Approved by the FDA for sale in the US o Available only by prescription o Medically necessary and for a "medically accepted indication" Cover "all or substantially all" drugs in these 6 categories: 1. Antidepressant medications 2. Antipsychotic drug medications 3. Anticonvulsant medications 4. Antineoplastic drugs (used by cancer patients) 5. Immunosuppressant (used by transplant patients) 6. Antiretroviral (used by patients with HIV). Cover at least 2 options all other drug categories (includes barbiturates and benzodiazepines) Also covers: o Biologicals o Insulin and insulin syringes o Smoking cessation drugs

electronic prescribing (e-prescribing)

Participation at this time is voluntary; CMS using a carrot (incentives) and stick (penalties) at this time CMS rules preempt state laws that restrict e‐prescribing.

AZ HB 2041 - "Pharmacy board, definitions" - awaiting governor's signature 4/11

Removes "graduate intern" designation from ARS 32‐1901 "Definitions; ARS 32‐ 1901.01 "Definition of unethical and unprofessional conduct; permittees; licensees; and ARS 32‐1923 "Intern and intern preceptors; qualifications; licensure; purpose of internship", ARS 32‐1927 "Pharmacists; pharmacy interns; disciplinary action" Changed language in ARS 32‐1925 "Renewal of license of pharmacists, interns, and pharmacy technicians; fees; expiration dates; penalty for failure to renew; continuing education." Specifies that licenses and permits must be designated as odd or even in the licensing database for renewal by way of verbiage or numerical value (will allow ASBP to change how licenses and permits are categorized for renewals) ARS 32‐1927.02 "Permittees; disciplinary action." Added Q. If the board approves a permit and the business fails to become operational within nine months after the date the permit is granted, the permit is no longer valid. The Board may grant a onetime extension.

Medication Therapy Management

Requires plans to provide coverage for medication therapy management programs Pharmacists are named as one of the providers of MTM services

Impermissable Activities Under the "Own Use" Doctrine

Sale of drugs to: o Former patients for obtaining refills o Medical staff for resale in their practice o Walk‐in customers who have no connection with the hospital

Permissable Activities Under the "Own Use" Doctrine

Sale of drugs to: o Inpatients, ER patients, and outpatients (who receive treatment or consultation on premises) for use on hospital premises. o Inpatients or ER patients on discharge and for personal use away from the premises. o Outpatients for personal use away from the premises o Hospital employees and their dependents, students at the hospital and their dependents, and medical staff of the hospital and their dependents, all for their own personal use.

Pharmacy reimbursement: MIPPA requires

That plans pay electronic pharmacy claims within 14 days of submission and 30 days for claims submitted by other means. Plans update their drug cost databases weekly to reflect accurate market prices

late enrollment penalty for part D

The late enrollment penalty is an amount added to an enrollee's Part D premiums. Enrollees may owe a late enrollment penalty if: o Don't join a Medicare drug plan when first eligible for Medicare and didn't have other creditable prescription drug coverage o Don't have Medicare prescription drug coverage or other creditable prescription drug coverage for 63 days or more in a row. Penalty = (1% of national base premium) * number of full, uncovered months enrollee eligible but didn't have drug coverage. This is added to the monthly premium.

What is an Automated Prescription-Dispensing Kiosk: Tele-health

"The delivery of healthcare services, where distance is a critical factor, by all healthcare professionals using information and communication technologies for the exchange of valid information for diagnosis, treatment and prevention of disease and injuries, research and evaluation, and for the continuing education of healthcare providers, all in the interests of advancing the health of individuals and their communities." (WHO) "the use of electronic information and telecommunications technologies to support remote clinical healthcare, patient and professional health‐ related education, public health and health administration" (US Department of Health and Human Services)

Tele-pharmacy

"the provision of pharmacist care by registered pharmacies and pharmacists located within U.S. jurisdictions through the use of telecommunications or other technologies to patients or their agents at distances that are located within U.S. jurisdictions" and provides definitions of related terms (i.e., coordinating pharmacy, remote pharmacy, remote dispensing site). (The Model State Pharmacy Act and Model Rules of the National Association of Boards of Pharmacy (Model Act))

Own Use Doctrine

"what may be regarded as used by the hospital in the sense that it such use is part of and promotes the hospital's intended institutional operation in the care of persons who are patients".

Pharmacy Accreditation Exemption

A pharmacy that meets all the following criteria may file an accreditation exemption statement to supply DMEPOS without accreditation -the total billings by the pharmacy for DMEPOS are less than 5% of total pharmacy sales for the previous 3 years -the pharmacy has been enrolled as a DMEPOS supplier and has had a provider number for at least 5 years -no final adverse actions were imposed in the past 5 years -the pharmacy submits an attestation that it meets the first three criteria to the NSC -the pharmacy agrees to submit requested materials during the course of an audit of randomly samples parmacies selected annually

EMTALA (Aka emergency medical treatment and labor act)

EMTALA was enacted in 1986 by Congress to ensure that emergency services are accessible to the public regardless of their ability to pay. Enacted in response to "patient dumping" where a hospital refuses admission to persons lacking health insurance.

EMTALA BASIC REQUIREMENTS FOR MEDICARE‐PARTICIPATING HOSPITALS: Medical Screening Requirement

For any person who comes to a hospital emergency department, "the hospital must provide for an appropriate medical screening examination . . . to determine whether or not an emergency medical condition exists" Emergency department is defined by regulation to be ANY department or facility of the hospital (including anywhere on hospital property; parking lot, sidewalk, driveway and hospital owned urgent care facilities), regardless of whether it is located on or off the main campus that meets at least one of the following elements: o It is licensed by the state as an emergency room, OR o It is held out to the public as a place that provides care for emergency conditions on an urgent basis without appointment; OR o It provides at least one‐third of all out‐patient visits for the treatment of emergency medical conditions on an urgent basis. Appropriate medical screening examination is the process of determining whether an emergency medical condition exists. Triage does not constitute an appropriate medical screening examination. Emergency medical condition is a condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in: o Placing the health of the individual (or unborn child of a pregnant woman) in serious jeopardy, or o Serious impairment to bodily functions; or o Serious dysfunction of any bodily organ or part

Separation of "Outpatient pharmacy stock" and "inpatient pharmacy stock"

Hospitals and other exempt entities may have some areas of activities that DO NOT qualify for NPIA exemption. Let's look at an example: Hospital A is a non‐profit that provides inpatient pharmacy services and also has an outpatient pharmacy that provides prescriptions to all hospital employees, medical staff, and anyone person who chooses to fill their prescriptions there (regardless if they have been a patient or not. Inpatient pharmacy = is covered by the exemptions listed in NPIA Outpatient pharmacy = in this case IS NOT covered by the exemptions listed in NPIA and therefore may not purchase medications as an exempt NPIA entity; the outpatient pharmacy must purchase medications at general market prices NOTE: therefore, the two inventories (inpatient and outpatient) may not intermingle; the outpatient pharmacy may not purchase from the inpatient pharmacy at the NPIA exempted rates.

2. Stabilizing Treatment

If the screening examination reveals an emergency medical condition, the hospital must "stabilize the medical condition" before transferring or discharging the patient. Stabilize = medical treatment of the condition is provided as necessary to assure that no "material" deterioration of the condition is likely to result from or occur during the transfer or, with respect to a pregnant woman, to deliver. Until the medical condition is stabilized - transfers to other facilities are restricted by law.

Medicaid

Legislation Social Security Act Amendments of 1965 (Tital XVIX of the Social Security Act of 1935) created Medicaid Medicaid provides for the health care costs of the: -poor -blind -disabled, and -those on welfare (members of families with dependent children)

Durable Medical Equipment, Prostetics, Orthotics, and Supplies (DMEPOS)

MMA mandated that HHS establish and implement quality standard for DMEPOS suppliers (including pharmacies) Process: 1. Pharmacy Accreditation -accredited by CMS approved independent national accreditation organization (AO) -cost = ~$2599 - 4799/3 year accreditation cycle example: NABP DMEPOS single pharmacy accreditation fees 2. Pharmacy Accreditation Exemption -for the exemption, pharmacies that meet ALL of the following criteria may file an accreditation exemption statement to supply DMEPOS without being accredited

Rebates and Prescription Drug Reimbursement

OBRA '90 created the Medicaid Drug Rebate Program. Allows for generation of funds for state Medicaid programs If manufacturers want their drugs on the Medicaid formulary, they must agree to rebate the difference between their best price and the lowest price at which they sell the product to any customer, to each state Medicaid agency. Essentially means that Medicaid programs won't have to pay top dollar for prescription medications. Approximately 600 pharmaceutical companies currently participate in this program. All fifty states and the District of Columbia cover drugs under the Medicaid Drug Rebate Program. If a pharmaceutical manufacturer is going to participate in the Medicaid Rebate Program, they must also sign up to participate in these two programs: Section 340B Drug Pricing - pricing used for community health centers (low‐ income, federally qualified underserved populations Federal Supply Schedule - VA pricing

Eligibility for Part D Coverage - Must live in service area the medicare drug plan

PDPs • Medicare Part A OR • Medicare part B MA-PDs •Medicare part A and B note: people with end-stage-renal disease may not enroll in MA-PDs

Pharmacy access

PDPs and MA-PDs must ensure that beneficiaries have convenient access to a network of pharmacies "any willing provider" requirement - though patients may have a higher co-pay or coinsurance if use a non-preferred pharmacy

The Sherman Anti-Trust Act

Passed in 1890; 2 sections (Section 1 - restraint of trade; Section 2 - monopolies) Sherman Anti-Trust Act - Section 1 Makes every contract, combination, or conspiracy in restraint of trade unlawful A single competitor cannot violate Section 1 o Example: A chain pharmacy (e.g. Rite‐Aid) can reject a third party plan 2 or more competitors can violate Section 1 if they have an informal or formal agreement between them o Example: 2 or more independent pharmacies together agree to reject a third‐ party plan o Example: 1996 Merck‐Medco lawsuit against Rite‐Aid, Giant, NeighborCare and EPIC Sherman ANti-Trust Act - Section 2 Prohibits monopolies, attempts to monopolize, or conspiracies to monopolize Just being a monopoly is NOT illegal o It is illegal for a monopoly to exploit its power for the purpose of harming competition

Robinson-Patman Act (1936)

Passed in 1936 Makes it unlawful for a manufacturer to charge 2 different prices to 2 purchasers who are getting the exact same product in the exact same quantity and are considered competing buyers.....if it substantially injures competition o Volume discounts are allowed Was passed to protect small business grocery stores against chain operators who were engaging in unfair purchasing operations Therefore, hospital in‐patient pharmacies are not considered competitors of retail pharmacies

Plan and Provider Marketing Limitations

Pharmacies can: Inform patients of the plans in which they participate Distribute plan marketing materials and applications Display brochures and posters about particular plans, provided they include all plans in which they participate Distribute CMS approved plan finder information and any information from the CMS website (www.cms.gov) and the Medicare website (www.medicare.gov) Pharmacies CANNOT: Direct, urge, or steer patients to a particular plan Compare different plan benefits unless created by CMS Collect or accept Medicare enrollment applications Accept compensation for conducting enrollment or marketing activities

Fraud and Abuse

Pharmacies must: Have policies and procedures in place to identify fraud, waste and abuse Certify that the data they submit are true, accurate and complete Keep records for 10 years Check employees against an exclusion list of persons issued by the Office of the Inspector General (OIG)

medicaid coverage

Required coverage of services includes: Inpatient and outpatient hospital services o Prescription drugs in these settings ~ Medicare Part B drugs Physician, midwife and nurse practitioner services Lab and x‐ray services Nursing facility and home health care for individuals age 21+ Early and periodic screening, diagnosis, and treatment for children under age 21 Family planning services and supplies Rural health clinic/federally qualified health centers Optional coverage includes: Prescription drugs (outpatient) ~ Medicare Part D Dental care Durable medical equipment Personal care services

Legitimate tying arrangement

Roche (the makers of Accu‐check ® blood glucose meters and strips) sold the following: o One box that tied the purchase of the meter and strips together o Boxes of strips (without meter) in varying package sizes of 25 strips, 50 strips, 100 strips.

Nonprofit institutions Act (NPIA) (1938)

This Act provides an exemption from the Robinson‐Patman Act to the following types of institutions when purchases are for "own use": Nonprofit schools Public libraries Universities Not considered competitors of retail pharmacies Churches Charitable institutions

Part D

Two ways to get Part D Medicare Drug Coverage: -original medicare coverage •Part D as Separate Stand Alone Policy •Medicare Prescription Drug Plans (PDPs) -medicare advantage plan (HMO/PPO) •Part D as part of the medicare advantage plan • medicare advantage plan with drug coverage (MA-PDs)

Price fixing

an agreement (written, verbal, or inferred from conduct ‐‐ explicit or implicit) among competitors or a single business to affect the price or allocation of services whether prices are fixed at a minimum, maximum, or within some range; usually done in necessity services

Boycotting

an agreement among competitors not to deal with another party

Tying Arrangements

conditions the purchase of one-product (the "tying" item) on the purchase of another (the "tied" item) This arrangement is ONLY illegal when the seller can force a buyer to purchase the tied product. A tying arrangement is presumed to be illegal where: o The tying and tied products are separate goods (rather than components for a single product) o The availability of the tying item is conditioned on the purchase (or rental or license of the tied item, as the case may be), and o The business imposing the tie is in a position to use its strength in the market for the tying to harm competition in the market for the tied product EXAMPLE Drug maker required patients to purchase its blood monitoring services along with its medicine to treat schizophrenia. The drug maker was the only producer of the medicine, but there were many companies capable of providing blood‐ monitoring services to patients using the drug. FTC and DOJ claimed that tying the drug and monitoring services together raised the price of medical treatment and prevented independent providers from monitoring patients taking the drug. Drug maker settled the charges by agreeing NOT to prevent other companies from providing blood‐monitoring services

Automated-dispensing machines

decentralized medication distribution systems that provide computer‐controlled storage, dispensing, and tracking of medications. Range from machines like Pyxis and Omnicell to the MedAvail and ScriptPro kiosks.

Cover Outpatient RXs (standard benefit parameters)

deductible = $405 initial coverage limit = $3750 in total drug costs catastrophic coverage threshold = $8418 in estimated total drug costs

Federal Anti-Trust Laws

designed to protect competition and keep prices low

eligibility requirements

determined by an individual's income and assets dual eligible: medicare and medicaid eligible

Deciding if an activity violates the Sherman Act - Section 1 and/or 2

in deciding a violation, the courts apply the rule of reason or the per se rule rule of reason: Is the net effect of the action promoting competition or suppressing it? This question is answered by examining: o The pro‐competitive and anti‐ competitive effects of the activity o The purpose, nature, duration, effect, and justification of the activity o Market power of the parties involved per se rule Essentially, "if you did it, you are guilty of doing it" If an agreement is illegal under anti‐ trust rules it is a per se offense. Violations include price fixing, boycotting, and tying arrangements (see below for further information)

the medicaid program

joint state/federal partnership -CMS -AHCCCS (AZ)

Medicare - open enrollment period - for this coming cycle

october 15-dec 7, 2018 new coverage begins january 1, 2019

Medicare - Legislation

social security act amendments of 1965 (title XVIII of the social security act of 1935) created medicare medicare is health insurance for: -people age 65 or older -people under 65 with certain disabilities -people of any age with end-stage renal disease (ESRD) (ESRD is permanent kidney failure requiring dialysis or a kidney transplant -people who have been exposed to environmental health hazards and developed health-related consequences as a result the different parts of medicare help cover specific services if the person meets certain conditions

Medicare - administrative agency

the center for medicare and medicaid services (CMS) (formerly the health care financing administration; HCFA)

Collusive price fixing

when 2 or more businesses join together and price fix to benefit themselves

Medicare Part B (medical insurance)

• Monthly premium (Std premium = $134/mo in 2018, based on income) • Helps cover doctor services, outpatient care , durable medical equipment & home health care. • Helps cover some preventive services to help maintain a person's health and to keep certain illnesses from getting worse (e.g., x‐rays, lab tests, durable medical equipment, colostomy care, diabetic supplies, etc) • Generally pays 80% of the Medicare‐ approved amount for covered services

Medicare Part D (Prescription Drug Coverage)

• Monthly premium = (Possible surcharge ($13.00 ‐ $74.80) + your plan premium) • Run by private companies approved by Medicare, which can either be Medicare Advantage Plans or separate Medicare Prescription Drug Plans. • Helps cover the cost of prescription drugs. • Each plan can vary in cost and drugs covered.

Medicare Part C (Medicare Advantage Plans)

• Montly premium (varies by plan) • Includes all benefits and services covered under Part A & Part B • Most plans include Medicare prescription drug coverage (Part D) as part of plan • Run by Medicare‐approved private insurance companies. • May include extra benefits and services for an extra cost

Medicare Part A (hospital insurance)

• No cost to eligible beneficiaries • Helps cover inpatient care in hospitals (includes critical access hospitals, inpatient rehabilitation facilities, and long‐term care hospitals). • Helps cover skilled nursing facility (not custodial or long‐term care), hospice, and home health care services. • Only covers drugs given to patients while they are in the hospital


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