Proposed New Law Creates “Safe Pharmacies” Aimed to Fight Controlled Substance Abuse and Includes Other Anti-Fraud Measures

Executive Summary

Recently, legislation was introduced in Congress that seeks to combat the growing problem of prescription drug abuse.  United States Representative Gus Bilirakis (R-FL), along with his co-sponsor Representative Ben Lujan (D-NM), introduced H.R. 3392, the Medicare Part D Patient Safety and Drug Abuse Prevention Act of 2013, in a bipartisan effort to strengthen program integrity measures within the Part D program, in part by giving Medicare prescription drug plans additional tools to fight fraud and waste.

Background and Discussion

The Centers for Disease Control and Prevention has declared prescription drug abuse a national epidemic, finding that prescription drug abuse claims more than 15,000 lives each year and costs the United States health care system $72 billion per year.  Elected officials at all levels of government, often in collaboration with stakeholders from the health care industry, are seeking to combat the rising rate of abuse, fraud and waste associated with prescription drugs through various legislative and regulatory measures, such as encouraging the use of prescription drug monitoring programs and implementing prescribing standards for controlled substances.H.R. 3392 comes on the heels of several Department of Health and Human Services’ Office of Inspector General (“OIG”) reports released in the last two years, which identified vulnerabilities in the Medicare Part D program following its investigation of questionable prescribing practices, inappropriate controlled substances refills, apparent invalid prescribers and high percentages of controlled substances billings.  For more information on these past reports, read our archived articles from Nov. 13, 2013; Sept. 28, 2012; and May 14, 2012.In response, H.R. 3392 (full text available here) proposes the following:

1. Safe Pharmacy Access ProgramMedicare prescription drug plan sponsors (“Plan Sponsors”) may be required to have procedures in place designed to identify certain Part D beneficiaries filling prescriptions for controlled substances that have been designated by the government as frequently abused.  The identified individuals would be required to fill such prescriptions at a contracted pharmacy in a safe pharmacy network, taking into account an individual’s residence, work location and other factors.  Pharmacies would be required to meet certain drug safety criteria in order to be part of a safe pharmacy network.
2.  Suspended Reimbursement During an Investigation of FraudPlan Sponsors would be granted authority to suspend payments and clean claim notifications to a pharmacy pending an investigation of a credible allegation of fraud, as defined by the proposed bill, against the pharmacy.
3. Greater Access to Records by MEDICs and Enhanced Communication Between MEDICs and Plan SponsorsMedicare Drug Integrity Contractors (“MEDICs”) would be authorized to obtain prescription and medical records directly from entities, such as pharmacies, drug plans and physicians.  Also, if a Plan Sponsor refers information to a MEDIC for an investigation, the MEDIC must acknowledge receipt of the complaint and report back to the Plan Sponsor regarding its investigation findings within 45 days.  Additionally, the bill would create uniform annual reporting criteria for MEDICs.
4. E-Prescriptions for Controlled SubstancesCoverage for controlled substances under Part D would require the use of e-prescribing.

Practical TakeawaysPharmacies should be aware of this bill and its potential to restrict the ability of pharmacies to bill Medicare Part D for certain patients’ controlled substances prescriptions.H.R. 3392 was assigned to the House Committee on Energy and Commerce and to the Committee for Ways and Means for its initial hearing.  Hall Render will continue to monitor its progression through the legislative process and other federal or state legislative and regulatory measures aimed at curbing the prescription drug abuse problem.If you have any questions or would like additional information about this topic, please contact Susan Bizzell at 317.977.1453 or sbizzell@wp.hallrender.com, Nicholas Gonzales at 414.721.0486 or ngonzales@wp.hallrender.com or your regular Hall Render attorney.Special thanks to Hannah Brown, Law Clerk, for her assistance with the preparation of this article.