In a case involving allegations of fraudulent billing of Medicare/Medicaid for invalid, unlawful and medically unnecessary prescriptions using collaborative practice agreements (CPAs), three Florida compounding pharmacies settled with the Department of Justice for $830,707.[1]
A CPA is a formalized written agreement between a pharmacist and another health care provider that allows the pharmacist to provide specific patient care services described in the agreement to the physician’s patients. These agreements, which exist in almost every state, must comport with the applicable state pharmacy law and requirements found within the state’s Pharmacy Practice Act. The agreements in question in this case were unlawful pursuant to Florida law in that they delegated prescribing authority where the same CPA was used to both write and fill prescriptions without any physician involvement. Additionally, the CPAs, many of which were allegedly expired, allowed the pharmacists to modify formulas for compounded prescriptions and delegate pharmacy functions to technicians.
Almost every state has different CPA provisions, including the terminology. In some states, these agreements are referred to as “collaborative pharmacy practice” or “collaborative drug therapy management (CDTM)” or “consult agreement.” CPAs are usually between an individual physician or health care provider and a pharmacist, not a physician and a pharmacy. However, in a handful of states, CPAs can be between a group of physicians and a group of pharmacists. A number of states, including New York, only permit CPAs in health care systems; CPAs are not permitted between physicians and community pharmacists in New York. In other states, CPAs are limited to certain activities such as immunizations or certain chronic diseases which they specify. Many states have special educational requirements for pharmacists eligible for CPAs (e.g. completion of a residency or Board certification and/or specific continuing education requirements). Some states allow pharmacists to initiate or discontinue drug therapy, others only permit dosage adjustments. In some states, a physician may not delegate the authority to initiate or prescribe a controlled substance to a pharmacist.[2] In Idaho, pharmacists are allowed to independently prescribe about 20 different medications for common illnesses such as the flu, urinary tract infections, and smoking cessation.[3] If the patient qualifies for independent prescribing and meets the treatment criteria, the pharmacist can write the prescription and dispense it provided that the pharmacist must notify the patient’s primary care provider within 24 hours and document follow-up with the patient.
It is important to be aware of the fact that CPAs include an added potential for practice liability for the pharmacists practicing under such agreements. Since each CPA is unique and each state has different requirements, the liability can vary greatly. Pharmacists have been sued for negligence under such agreements and higher malpractice insurance limits may be warranted.
Pharmacist billing for nondistributive services under CPAs are not well defined. In a fee-for-service environment, pharmacists can work as part of a physicians’ group practice and claims may be submitted for payment under the physician’s NPI; they may be recognized as a provider and bill directly; or patients can pay cash. Since pharmacists are not currently recognized as Medicare providers, they cannot bill Medicare Part B directly. Instead they must file a “level 2” visit claim (e.g. for a typical anticoagulation visit) and the reimbursement would return to the practice where the pharmacist is employed. Where the pharmacist is not directly employed by the medical group or is in an individual practice setting (e.g., community pharmacy), the pharmacist may establish provider status with payors and bill directly under the medical reimbursement system where applicable.[4]
How Frier Levitt Can Help
Before structuring and executing a CPA, pharmacists should have their agreement reviewed by an attorney familiar with applicable state pharmacy laws and the requirements for CPAs that must be met. CPAs should also be periodically reviewed for compliance with state pharmacy laws to ensure that the parties’ arrangement remains compliant both in the agreement and in practice. Billing scenarios are complex and Frier Levitt can assist. Contact Frier Levitt for assistance in preparing or revisiting preparing and/or your CPA.
[1] United States et al. ex rel. Morales v. Habana Hospital Pharmacy, Inc. et al., No. 17-CV-80871-KAM, S.D. Fla. 2017.
[2] Fl. s. 893.03 or 21 U.S.C. s. 812
[3] Progressive Pharmacy Laws. (n.d.). Idaho State University. Assessed September 3, 2022.
[4] Koch KE, “Trends in Collaborative Drug Therapy Management” Drug Benefit Trends 12(1):45-54, 2000.
