The Hidden Costs of Pharmacy Compliance: Top Issues and Technology-Based Solutions

 

Compliance mandates affect a wide range of pharmacy operations and collectively, they impose significant costs on the nation’s pharmacies.  This includes monetary costs as well as the drain on staff resources needed to address compliance requirements.

Mandates come from multiple sources including federal, state, and local legislative bodies; regulatory agencies including the Centers for Medicare & Medicaid Services (CMS) and the Food and Drug Administration (FDA); state pharmacy boards and increasingly, from pharmacy benefit managers (PBMs).  Regardless of the source, pharmacies are responsible for ensuring complete, accurate and timely implementation.

This includes absorbing the costs associated with compliance, which can include various registration, licensing, and permit fees.  Pharmacies also face costs incurred from increasingly common compliance audits.  “The average audit,” according to reporting from Pharmacy Times “cost pharmacies $23,978,”  during 2020.  This was a 35 percent increase over the previous five years.

Failure to meet compliance requirements can come at a steep cost.  Consider, for example, the $825,000 fine imposed on one national chain  for violating auto-refill requirements.  Or the $1.5 million fine imposed on another for a range of issues including understaffing, dispensing errors, and expired medications, among other issues.

Or pharmacies that have been fined as much as $2.25 million for HIPAA violations.

There are many reasons why pharmacies run afoul of compliance requirements.  While some cases involve blatantly illegal or fraudulent actions, most violations are honest mistakes, often caused by unawareness or poor recordkeeping.  PBA Health cites common mistakes that include:

  • Not maintaining hard copies of prescriptions.
  • Filling unauthorized refills or failing to document refills.
  • Dispensing incorrect quantities.
  • Use of incorrect DAW codes.
  • Use of incorrect prescription origin codes.
  • Failing to include accurate dispensing directions.
  • Failure to maintain signature logs.
  • Improper dispensing of controlled substances.

 

As challenging and potentially costly as proper compliance certainly is, technology-based solutions can offer some much-needed relief.  Technology providers, including PrimeRx, have kept pace with changing compliance requirements, and offer solutions that automate and simplify key compliance processes.  Pharmacies can seamlessly manage significant volumes of compliance requirements with confidence about data accuracy, and with minimal staff time expended on tedious data entry.

The following discussion will highlight several areas in which technology, namely the PrimeRx pharmacy management system, can help pharmacies facilitate compliance.  Regulations and mandates are unavoidable parts of pharmacy operations, but with a high-performing technology system in place, they no longer have to be a drain on pharmacy efficiency or finances.

Issue:  Automatic Refills
Prescription refills are a vital source of revenue for the pharmacy.  And automatic refill programs provide a logical way to ensure patients remain adherent with their medications while helping pharmacies improve their bottom line.  However, auto refill programs have become a hot potato for regulatory action following a backlash that ensued when consumers were unknowingly registered to receive medications they did not want.

Today, regulations and statutes are in place that carefully control auto refill programs.  According to 2022 research from the Centers for Medicare & Medicaid Services, 27 states have policies in place prohibiting the “auto-refill process that occurs at the POS.”  While some states ban the use of auto-refill programs entirely, others impose specific requirements intended to ensure programs are voluntary, and require pharmacies to obtain patient consent prior to enrollment.

Specific state requirements vary but according to Mazina Law, may include:

  • A process for obtaining patients’ written consent to auto-refills.
  • A written policy and procedure that describes the pharmacy’s auto-refill program.
  • Written materials provided to patients that summarize the auto-refill program, and provide clear instructions for withdrawing from the program. Such materials must be available in multiple languages.
  • A completed drug regimen review for all prescriptions filled through the refill program.
  • A written notification to the patient confirming that a medication will be filled through the refill program. Notification must be provided each time a medication is refilled.
  • Ability for patients to withdraw a specific medication from the auto refill program, or to leave the program entirely.
  • Immediate discontinuation of auto refill program participation when a patient enters a nursing facility.
  • Regular confirmation (at least annually) that a patient wishes to continue to participate in the auto-refill program.
  • Ability to issue a full refund for medications filled through the program that are not wanted by the intended patient.

 

It’s easy to see how pharmacies can run afoul of auto-refill program requirements.  Full compliance is essential though, because penalties for any mistakes can be harsh.  According to Mazina Law, “non-compliance can lead to potential claims and actions against the pharmacy under the False Claims Act (which is very time-consuming and expensive to defend).”

PrimeRx Auto-Refill Capabilities
The PrimeRx pharmacy management system helps pharmacies meet auto-refill program regulatory requirements with capabilities that include:

  • Refill Consent Opt-In: Pharmacies can transmit email and text messages to patients asking for consent to participate in the pharmacy’s auto-refill program.  Once the patient verifies consent, the response is added to the patient’s record and stored within PrimeRx.
  • Information Dissemination. Pharmacies can transmit required program information and documentation directly to each patient. This may include specific details about the program, information about how to withdraw a specific medication, and how to unsubscribe from the program entirely.
  • Automated Messages: PrimeRx can automatically alert a patient when an auto-refill prescription is due to be filled.  The system will again alert the patient when the prescription is ready for pickup.  Should a patient fail to pick up a medication within a pre-determined time, the system will generate a “gentle” reminder that the pickup is waiting.
  • Refill Consent/Default Settings. PrimeRx allows pharmacies to set a “refill consent” reminder as a default setting.  With this setting enabled, the pharmacist will be asked to confirm that patient consent has been received each time an auto-refill prescription is added to the queue.  The system records how the patient consent was obtained (written, SMS text, telephone).
  • Records Management. Pharmacists can quickly access all auto-refill program records.  PrimeRx is easily searchable and can generate reports on a broad range of auto-refill related activities including  patient consent records, program withdrawal requests, and medications dispensed via the refill program.

 

Issue:  Controlled Substances
The National Institutes of Health defines controlled substances as “drugs or medications that possess the potential for being misused and are considered to be substances that have a substantially high risk of resulting in substance use disorder.”

Federal Compliance – Controlled Substances Act
The Controlled Substances Act (CSA) was enacted by the U.S. Congress in 1970 and signed into law by President Richard Nixon.  Among its many provisions, the law establishes federal requirements regarding controlled substances and authorizes the Drug Enforcement Agency (DEA) to enforce those requirements.

The law divides drugs and other materials considered to be controlled substances into five “schedules.”  According to the DEA, a controlled substance is placed in its respective schedule based on whether it has an accepted medical use, and its relative abuse potential and likelihood of causing dependence.  A brief overview includes:

  • Schedule I Controlled Substances: Schedule I substances have a high potential for abuse, and have no currently accepted medical use in treatment in the U.S.  Examples cited by DEA include heroin, LSD, marijuana, and ecstasy.
  • Schedule II Controlled Substances: Schedule II substances have a high potential for abuse which may lead to severe psychological or physical dependence.  Examples include morphine, opium, oxycodone, cocaine and amphetamine.
  • Schedule III Controlled Substances. Schedule III substances have a potential for abuse less than substances in Schedules I or II, and abuse may lead to moderate or low physical dependence or high psychological dependence.  Examples of Schedule III narcotics include Vicodin and Tylenol with codeine.  Also included are buprenorphine products used to treat opioid addiction.
  • Schedule IV Controlled Substances: Schedule IV substances have a low potential for abuse relative to substances in Schedule III.  Examples of brand name Schedule IV substances include Darvon, Xanax, Klonopin, Valium, Ativan and Restoril.
  • Schedule V Controlled Substances: Schedule V substances have a low potential for abuse relative to substances listed in Schedule IV and consist primarily of preparations containing limited quantities of certain narcotics.  Schedule V examples include cough preparations such as Robitussin AC and Phenergan with Codeine.

 

Every pharmacy that handles controlled substances must be registered with the DEA and maintain strict records of all controlled substance transactions.

With regard to reporting, DEA makes clear that federal law is intended to work in tandem with state laws.  DEA works in cooperation with state professional licensing boards and law enforcement officials to ensure that controlled substances are prescribed, administered, and dispensed for a legitimate medical purpose, in the usual course of professional practice.

The DEA maintains a “Pharmacist’s Manual” that details the pharmacy’s role in ensuring compliance with CSA provisions.  The Manual was most recently updated in 2022.  According to Pharmacy Audit Assistance Service (PAAS) National, required forms must now be completed and submitted online.  Paper copies of forms including new pharmacy registrations, and pharmacy license renewals, will no longer be accepted.

Other pharmacy-specific provisions of the law include significant recordkeeping requirements for “each controlled substance purchased, received, stored, distributed, dispensed, or otherwise disposed of.”  These records include receipts, invoices, inventory records, dispensing records (prescriptions, Schedule V logbooks), and distribution records (returns to vendors, sales to other registrants, and records of transfers to other pharmacies).

Pharmacies must also meet requirements for storing prescription records.  All prescription records must be readily retrievable for DEA inspections.  Electronic records must be maintained for two years “in an application that meets the requirements of the Controlled Substances Act.”

 

PrimeRx Compliance Capabilities
PrimeRx  helps pharmacies seamlessly track and document medications, while ensuring patients receive required medications and materials.  System capabilities include:

  • Record and document management. All prescriptions are safely stored within PrimeRx and easily accessible.  This includes prescriptions that are received electronically, as well as those that arrive via hard copy or fax.  Paper prescriptions are seamlessly digitized and added to a patient’s record.  The system also stores all  transaction records, including prescription details and patient payment information.
  • Account management. Extensive records can be maintained for each patient.  This includes the ability to record notes and updates following a patient interaction.
  • Prescriber validation. Before a pharmacy can process a prescription for a controlled substance, the pharmacist must first validate the prescriber’s DEA authority.  PrimeRx integrates with the Prescriber Validation Service (PVS) to seamlessly perform this credential check as a routine part of filling a controlled substance prescription.  PVS provides real-time access to prescriber National Provider Identification (NPI) and DEA credentials, as well as state licensing information and authorization activity.
  • Inventory management. PrimeRx helps pharmacies manage their controlled substance inventory holdings, as required by the Drug Supply Chain Security Act (DSCSA).  This includes the ability to track each medication based on unique elements including drug lot/expiration numbers, GTIN numbers, NDCs, and serial numbers.  PrimeRx also supports the DSCSA requirement that all product identifiers be accessible in 2D barcode format. [See below for more information about the DSCSA.]
  • Records/Reports. Users can generate reports based on specific needs, including sales by particular drug, fast/slow sellers, daily/weekly/monthly/annual sales, expired medications, rejected claims, prescriptions left in bins, controlled substances, overall inventory levels, and many other possibilities.


Partial Filling Schedule II Controlled Substances
The Controlled Substances Act was modified in 2016 with passage of the Comprehensive Addiction and Recovery Act (CARA).  According to a rule summary posted in the Federal Register, CARA includes a provision that allows “for the partial filling of prescriptions for schedule II controlled substances under certain conditions.”    Those conditions include:

  • Partial filling must not be prohibited by State law.
  • The prescription must be written and filled in accordance with the Controlled Substances Act.
  • The cumulative quantity dispensed from all partial fills must not exceed the total quantity prescribed.
  • The remaining portion of a partially filled prescription must be filled within 30 days of the written date of the prescription. For  emergency oral prescriptions, the remaining portion must be filled within 72 hours (3 days).

In announcing the new rule, the DEA explained that partial filling could reduce prescription drug costs for patients who do not need to continue on drug therapy.  The agency also reasoned that partial filling would “help to reduce the risk that the patient might develop physical dependence or an addiction,” or that a member of the household might gain access to the drugs.

The partial filling regulation took effect in August 2023.

The partial filling regulation imposes several new compliance requirements on pharmacists.  According to the DEA, those responsibilities include:

  • The quantity dispensed must be notated on the face of a written prescription, in the written record of an emergency oral prescription, or in the record of an electronic prescription.
  • When the prescription has been received electronically, the quantity dispensed, date dispensed, and name of the dispenser must be linked to the record of the electronic prescription.
  • Pharmacies have the option to fulfill recordkeeping requirements for paper or emergency oral prescriptions using the pharmacy’s electronic recordkeeping system.


PrimeRx Facilitates Partial Fill Compliance
PrimeRx includes capabilities that allow pharmacies to execute partial fill requests and satisfy all compliance requirements.  When a pharmacist enters a prescription for a Class II medication, but with a dispensing quantity that is less than the order quantity, PrimeRx will prompt the user for required information.  The user will be asked to identify the authorizing party as well as the reason for the partial fill, in accordance with DEA requirements.

State Compliance – Prescription Drug Monitoring Programs (PDMPs)
According to the Centers for Disease Control (CDC), a prescription drug monitoring program (PDMP) is “an electronic database that tracks controlled substance prescriptions in a state.”  Health-care providers including physicians, nurses and pharmacists access statewide databases for a range of purposes including patient monitoring, research, and in some instances, law enforcement.

With so much data available, PDMPs have the potential to be highly effective tools in helping combat opioid abuse.  Pharmacists, for example, can identify patients engaged in “doctor shopping,” whereby prescriptions are obtained from multiple physicians, track use of medications that precede a patient’s relationship with a particular pharmacy, and detect possible fraud.

Every state maintains a PDMP that requires pharmacies to submit regular – in some cases daily – reports about controlled substance prescription activity.  Even if a pharmacy fills no prescriptions for a controlled substance, a zero-submission form may still be required.

Pharmacies are required to provide data on prescriptions dispensed including the name of the prescribing physician and their DEA number, the date the prescription was written, and where and when the prescription was dispensed.

To ensure consistency across each state’s PDMP, the American Society for Automation in Pharmacy (ASAP) was tasked with developing national standards.  ASAP released an updated standard, Version 5.0, in January 2024, which now serves as the foundation of each state’s prescription drug monitoring system.

PrimeRx – Seamless PDMP Reporting
PrimeRx automates the PDMP reporting process, allowing pharmacies to seamlessly comply with this important requirement.  PrimeRx has been updated with all Version 5.0 requirements which now include, among other things, reporting capabilities for cannabis and specific opioid treatments.

PrimeRx automatically prompts a pharmacis to provide PDMP-required data each time a prescription is filled for a controlled substance.  The pharmacist responds to the prompts, usually by choosing the correct information from a drop-down menu.  Once all information is provided, the report is saved and transmitted to the appropriate state agency.

Issue:  Drug Supply Chain Security Act (DSCSA)
The Drug Supply Chain Security Act (DSCSA) establishes a single, nationwide electronic process to verify the safety of prescription medications, share data, and report instances of suspect or illegitimate drugs.  The new process, called a “track-and-trace-system,” replaces what had become a patchwork of state reporting requirements, and a series of disconnected, siloed technology systems.

The law was enacted in 2013 and established a timeline for specific deliverables and benchmarks.  The law’s final provisions, which require traceability at the unit level, are scheduled to take effect in  late 2024.

The DSCSA includes several provisions that directly affect pharmacists, who of course have a critical role in the nation’s drug supply chain.  A topline listing of pharmacy-specific provisions as provided by the Food and Drug Administration (FDA) includes:

  • Confirm the entities you do business with are licensed and registered.
  • Receive, store and provide product tracing information.
  • Investigate and properly handle suspect and illegitimate drugs.

 

PrimeRx has published a white paper, “The Drug Supply Chain Security Act (DSCSA) – Ensuring Full Pharmacy Compliance,” that provides background information about the law, as well as specific information about pharmacy requirements.

The paper also details PrimeRx capabilities that facilitate compliance with the DSCSA.  This includes direct integration with third-party technology provider InfiniTrak, an industry leader in developing DSCSA-specific track-and-trace solutions.

Key InfiniTrak capabilities include:

  • EPCIS-ready. The solution supports the DSCSA-mandated Electronic Product Code Information Services (EPCIS) data protocol. This avoids having to maintain access points with each wholesaler, supplier, etc.
  • Easy capture of transaction data elements including drug lot/expiration numbers, GTIN numbers, NDCs, and serial numbers.
  • Real-time verification of trading partner licensing authority.
  • Workflows that support the identification and verification of suspicious products, product quarantines, and guidance for notifying the Food and Drug Administration.
  • Ability to search for products by date, supplier, description, NDC, invoice number, lot, status, and type.
  • Ability to coordinate global location numbers (GLN) for interoperability.
  • Ability to store – and easily access – DSCSA compliance reviews and inspection documentation as needed.

 

PrimeRx capabilities:

  • 2D Barcodes: The DSCSA requires all product identifiers to be available in 2D format.  PrimeRx supports this requirement and allows users to capture data elements that include:
    • Drug Lot
    • Expiration Date
    • Serial Numbers
    • Global Trade Item Number (GTIN)
    • National Drug Code.
  • PrimeRx offers extensive recordkeeping capabilities that allow pharmacy managers to efficiently store documentation and information about all aspects of pharmacy operations.  Pharmacies can easily satisfy DSCSA requirements that records be maintained for a minimum of six years.
  • Report generation. In addition to storing this information, PrimeRx allows the pharmacy manager to generate detailed reports on a wide range of patient, inventory and operations topics.  This includes reports to satisfy FDA information requests regarding specific transactions, or drug investigations.  Should a pharmacy determine that a drug is illegitimate, PrimeRx can facilitate compliance with all FDA reporting requirements.
  • Compound medications are included in DSCSA track-and-trace requirements.  PrimeRx facilitates compliance with capabilities that include the ability to identify the lot number for each ingredient used in a medication. Pharmacies can also trace all medications tied to a particular lot and provide required transaction details.

 

For more information about the DSCSA, access PrimeRx’s white paper by clicking here.

Conclusion
The American Association of Colleges of Pharmacy (AACP) maintains a “Top Ten Reasons to Become a Pharmacist” list that includes statements like “I want to help people get well,” “I like to work directly with patients,” and “I want to be an important member of the healthcare team.”  Nowhere on the list though, does it say, “I want to deal with compliance issues.”

No one becomes a pharmacist to deal with compliance issues.  But unfortunately, compliance is an important part of the pharmacist’s responsibilities.  And good compliance is important, especially with regard to protecting the integrity of the drug supply chain.  As pharmacists become even more integral to patient healthcare, the volume of compliance mandates is steadily increasing.

Technology can help.  Pharmacy management systems such as PrimeRx automate and seamlessly manage many pharmacy compliance obligations.  This saves the pharmacy valuable time, improves accuracy, and helps minimize the risk of costly fines and penalties.

With a highly efficient technology solution in place, compliance no longer has to be a pharmacy pain point.  Instead, compliance becomes a pharmacy best practice, and one less thing for pharmacists to worry about.

References