Just the mention of the word inspection can make a pharmacy owner, manager and the entire pharmacy staff anxious. Previously we had discussed in depth the issues involved in being prepared for pharmacy compliance audits. Yet a recent actual inspection that one of our clients just experienced shows exactly how being unprepared for an upcoming inspection can quickly turn into a crisis and dramatically affect your business. Without focusing on the name of the pharmacy involved, nor the name of the pharmacy network that performed the inspection, let’s take a moment to review what actually transpired and the results that the pharmacy was forced to address and deal with due to their lack of pro-actively being prepared.
Actual Recent Pharmacy Inspection Case Study –
The pharmacy was attempting to enroll in a specific pharmacy network as a specialty pharmacy. After filling out all the necessary application paperwork, the pharmacy was accepted on the basis that the pharmacy network would conduct a site visit, at which time the network would review that the credentialing requirements were all met. The inspection took place in late May and the pharmacy’s application was denied on the basis that pharmacy operation “was unable to satisfy the credentialing requirements”. In the opinion of the inspector, the pharmacy did not possess a reasonable amount of inventory to fill routine prescriptions required by the pharmacy network “within the community with items on hand”.
The issue really centered on the fact that at the exact same time the pharmacy was moving to a new location. As the Vice President of Pharmacy Operations shared with us here at HCC, ” Our visit was 2 days prior to our move and we therefore had a majority of medications in boxes which we informed the inspector of. We had inventory and could have put any and all inventory needed in stock but no such guidance or criteria was given.”
The result was that not only was the application denied, but the pharmacy was informed that the decision would stand for a six month period starting on the date that the pharmacy inspection actually took place. This means that the pharmacy could resubmit a new application at the end of November of 2017. Additionally to having to complete and resubmit the application, the pharmacy would have to pay the application fees again and be subject to another site visit. As the Vice President of Pharmacy Operations succinctly asked us here at HCC, “Is there any recourse to have another visit on our new site to prove our model and preparedness with all medications present?”. HCC is at this time in communication with the network provider on the pharmacy’s behalf, seeking to help the client get a quick resolution.
The main point of sharing this recent case study is that most pharmacies don’t realize the importance of getting expert help in preparation for credentialing, audits and applications in order to avoid these types of issues.
Compliance Audits and Inspections
A pharmacy audit or inspection assesses a pharmacy’s level of compliance in regards to procedures stipulated by regulatory or contractual arrangements. Basically pharmacy compliance audits can be placed into two categories:
- Third Party Provider or Pharmacy Network Audits – Every pharmacy that is a contract provider of prescription services is subject to a clause in its provider agreement that allows an audit of the pharmacy’s records, including hard-copy prescriptions, signature logs, computerized records of refills, and invoice records.
- Regulatory Agency Audits – Pharmacies obviously are subject to audits conducted by state or federal licensing agencies such as the DEA and State Board of Pharmacy.
To help you prepare and know what to expect during an inspection, HCC recommends that you consider the following topics that are generally seen in typical audits and then ask yourself the following questions: Do we have policies and procedures in place AND do we have documentation of adherence to the procedures in place?
Audit criteria that are routinely seen in a pharmacy inspections and compliance audits include:
– Purchasing and dispensing of controlled substances
– Accuracy of claims including quantity, dispensing date, dispensing intervals, and prescriber information
– Product selection criteria for generic versus brand utilization
– Assuring that special inventory controls exist for government mandated discount programs
– Proper administration of a benefit plan
– Assuring that rebates and risk-sharing provisions in a benefit plan are working properly
– Compliance with contractual requirements for Point of Dispensing programs
– Accuracy of invoice preparation
– Compliance with formulary requirements
– Suspicion of fraud and abuse
It is safe to assume that eventually your pharmacy will be the subject of a pharmacy inspection or audit at some point in the future. With over 27 years of experience in Pharmacy Consulting on a national level, Healthcare Consultants can help make sure that when the time for an inspection or audit does arrive, you are ready! If you are pro-active and prepared, an audit or inspection is simply a routine procedure and the results limited to minor recommendations for improvement.
Don’t let “being to busy making a living” or any other reason result in your being unprepared for an inspection or audit. The outcome may lead to potential issues and problems that can result in serious threats to your pharmacy! As the old cliché says: An ounce of prevention is worth a pound of cure! Contact us online or call us today for a Free Consultation at 800-642-1652 to discuss how we can help you.