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Pharmacy Audits

Pharmacy Audits

Pharmacy AuditsOver a year ago a pharmacy audit in Colorado resulted in a payment of almost $64 million in a settlement by DaVita, Inc. DaVita is known for being a major provider in the dialysis field and in the treatment of patients with severe and chronic renal diseases. The company additionally owns a division that supplies numerous pharmaceuticals to both patients and providers. Following an audit of their pharmacy division, DaVita was accused of numerous billing improprieties in regards to several federal government health care programs. The pharmacy division also was cited for paying what are considered illegal financial inducements to DaVita’s patients. As reported then by the Kansas City Star, the United States Justice Department accepted a settlement of $63,700,000 from the company after the pharmacy division’s audits resulted in the criminal activities coming to their attention.

DaVita’s pharmacy division was alleged to have billed Medicaid, Medicare and several other federal programs for prescriptions and drugs that never actually were dispensed or delivered to any patients. Additionally, they were cited for billing improprieties regarding medications that were returned unused and also  for prescriptions that didn’t satisfy program requirements. DaVita also was cited for its pharmacy being in violation of federal “anti-kickback” laws for paying illegal financial incitements to patients.

New DEA Audit Data From a Tennessee Pharmacy

Just a few days ago the Wall Street Journal (WSJ) announced that the US Drug Enforcement Agency (DEA) has released their audit data that was collected during an agency audit of a grocery store pharmacy located in Knoxville, Tennessee. According to the Wall Street Journal article just released on September 19th of 2019, the Food City Pharmacy purchased almost a million tablets OxyContin in 2008 alone. This is the third-largest annual amount of OxyContin purchased anywhere in the entire United States. It’s interesting to note that the DEA’s audit data was actually obtained by the NY Times from the lawyers that were representing several local municipalities in their lawsuits against Purdue Pharma and several other pharmaceutical “players” in allegedly maintaining the supply of opioids that has lead to the CDC’s declaration of the opioid crisis in the USA.

Residents and business owners located near the Food City Pharmacy had actually started to complain to the local police and authorities all the way back in July of 2008. The focus of the local residents’ complaint was that the drugstore’s parking lot was actually a center for drug dealers and crime ever since the store had began to fill prescriptions for a nearby pain clinic. The story even appeared in a local newspaper article.

Finally in 2016, the grocery store pharmacy was cited from the DEA audit by the Tennessee State Board of Pharmacy for the dispensing of opioids “in a manner inconsistent with Tennessee’s laws and regulations, including the dispensing of Opioids to patients who’d driven long distances to get to the pharmacy, accepting postdated prescriptions, and failing to check the state Rx and prescription monitoring database before actually dispensing any controlled substances”.

Be Prepared For A Pharmacy Audit

In the first case cited above, DaVita’s management team admitted to ignorance in regards to the practices that the audit of the pharmacy division revealed. Yet according to the US Department of Justice, DaVita was “guilty as charged and responsible for the actions of all of their employees and staff”. Don’t let this happen to you.

In the second case cited above regarding the DEA audit performed on the Tennessee grocery store pharmacy, it’s pretty easy to see that a pharmacy audit by the DEA that took place “all the way back” in 2008 can still be making headlines almost eleven (11) years afterwards.

Pharmacy audits are being seen more frequently than ever before and many experts state that it’s a safe assumption that your pharmacy will be audited every two years at a minimum. In today’s world of Big Data and Social Media, an audit that reveals improprieties in your pharmacy is public information and can literally cost you tens of thousands of dollars, even if you are able to combat any allegations that are made and prove your innocence. The bad publicity alone that we have seen many pharmacies experience leads to both the loss of customers and revenue that could easily have been avoided. The key to avoiding a bad inspection or audit? Get prepared NOW!

Types Of Pharmacy Audits

Pharmacy compliance audits assess 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:

  1. Third Party Provider Audits – A pharmacy that operates as a contract provider of prescription services for a third party is subject to a clause in its provider agreement that allows an audit of the pharmacy’s prescription records. This is inclusive of “hard” copy Rx’es, patient signature logs, computerized records of refills, plus all of the pharmacy’s invoicing records.
  2. Regulatory Agency Audits – Pharmacies are subject to audits by both state or federal licensing agencies such as their geographical State Board of Pharmacy and federal agencies such as the FDA and DEA.

Be Proactive and Get Prepared Now

HCC’s is a nationally renowned Pharmacy Consulting firm that has been helping pharmacy owners be prepared for audits since 1989. With 30+ years in the business, our in-house consultants have the experience required to assess your business and make recommendations in regards to any improprieties in your pharmacy operations. Our regulatory experts can perform mock inspections and identify areas of potential violations, weaknesses and concern. Our consultants will, upon completion of the audit, prepare both a Gap Analysis and a Corrective Actions Plan and then discuss these in detail with you and your team. If significant issues are found, our consultants are available to assist in the implementation of the corrective actions and perform a re-inspection to confirm compliance has been achieved. HCC will also make sure that your pharmacy’s Policies and Procedures are current and up to date as required by all inspectors.

Our experts are also available to review your prescription filling and billing processes to identify areas that may put you at risk of a payer audit and recoupment demands. HCC’s consultants will work with you and your team to correct areas of concern and develop risk mitigation strategies to prepare your pharmacy for the unexpected, but inevitable, audit.

Don’t wait until you get the audit notice or find the auditor at your doors. Known nationally as one of the industry leaders in providing a full range of professional pharmacy consultation services to its vast array of clients, HCC is owned and operated by pharmacists. Healthcare Consultants can provide proven expertise and experience in all facets of pharmacy operations, including retail, hospital and all specialty pharmacy venues. Contact us online or call us today for a Free Consultation at 800-642-1652 to discuss how we can help you.

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