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Pharmacy Compliance Consulting

Regulations and Pharmacy Compliance Consulting Programs for Pharmacies Across the United States

Lynette Byrd
Attorney Lynette S. Byrd
Pharmacy Compliance Team Lead
Former DOJ Attorney
envelope iconContact Lynette directly

Pharmacies are under attack. Law enforcement agencies across the country are investigating pharmacies for compliance and alleged healthcare fraud and physician kick-back schemes. Of particular scrutiny are compound pharmacies that have billed high amounts to Tricare, Medicare, and the Department of Labor health programs. In light of this climate of dangerous investigations, pharmacies and their executives are well advised to pursue a strong and effective pharmacy compliance consulting program to obviate impressions of any wrongdoing. How that can be done is subject of this brief overview.

The Risk of No Compliance

When investigators inspect premises or request records from pharmacies by way of OIG subpoenas, one of the first things they look for is the existence of an effective compliance program. In a great number of cases, OIG and FBI agents in charge of pharmacy investigations find either no compliance program or, what they call “window-dressing,” that is a program merely on paper. Because in many fraud investigations the difference between civil recoupment of overcharged amounts and actual criminal charges is just a fine line, pharmacy owners are silly not to have the safety net of a compliance program in place. Oberheiden, P.C. provides effective compliance consulting to pharmacies across the US.

Without any doubt, a realistic and professionally set up compliance program will significantly reduce the risk of criminal exposure. Compliance programs are designed to establish, monitor, and enforce proper conduct and to demonstrate to auditors and the government that no bad intent— which is needed for criminal prosecutions— ever existed among the pharmacy’s owners and decision-makers.

Fantastic lawyer - so dependable. We've worked with Nick for over 4 years and he is the best at what he does.
Denver F.
Denver F.
Attorney Lynette Byrd was so kind and helpful with my case. I would highly recommend her legal services.
Marcel L.
Marcel L.
Nick Oberheiden is an excellent attorney. He is hardworking, smart and intelligent.He takes a proactive approah on cases. He has dedicated team of former federal lawyers and investigators that are available to get results on cases. I recommend him highly.
Chris Q
Chris Q
Dr. Nick is acutely aware of the intricacies and subtleties of the relevant legal issues, and he is also gifted at explaining the issues in simple, easy-to-understand language. He has an outstanding rapport with the prosecutors - a critical talent for an Attorney trying to prevent prosecution or minimize criminal... exposure of his clients. He is a master of multi-tasking, so you can be rest assured that he is always up-to-date with your representation. I believe that his European background allows him to view the totality of your case from an extra “dimension,” which allows him to craft exceedingly effective strategies and proffers. His caring and empathetic attitude goes a long way in helping you to keep up your spirits through the process. I could not have hoped for a better outcome. I unreservedly recommend him - he is a true Master of the trade!read more
When your freedom, family, or fortune are at stake - it's best you meet Nick Oberheiden. Respected by the judges, his peers, colleagues, and clients - Nick is known to get results. Putting his keen intellect aside, one cannot help but appreciate his genuine desire to protect his clients and prevail. His cell number... is in my phone for good reason. And if I ever need him, I know he'll be there - ready to more
Michael D. W.
Michael D. W.
I've had the pleasure of working with Nick over the last few years. Without a doubt, Nick is the best federal criminal defense attorney I've ever worked with. I wouldn't hesitate to recommend Nick and his team to any friend or family member. Keep up the great work.
Gerrid S.
Gerrid S.

5 Key Compliance Areas for Pharmacies that Bill Federal Benefit Programs

What does it take for a pharmacy to be federally-compliant? While there are numerous aspects to federal compliance, most pharmacies’ obligations can be condensed into five key areas:

1. DEA Registration Compliance

Registering with the U.S. Drug Enforcement Administration (DEA) entails a host of compliance obligations. Pharmacies must go to great lengths to ensure that their storage, labeling, and dispensing practices are fully compliant with the federal Controlled Substances Act (CSA), and they must be prepared to demonstrate their compliance in the event of a DEA inspection or investigation.

2. Prescription Drug Fraud

Pharmacies can face a broad range of prescription drug fraud allegations in DEA and other federal agency investigations. From dispensing medications pursuant to invalid prescriptions to accepting illegal compensation from prescribing physicians, pharmacies must ensure that all aspects of their business operations are structured to avoid allegations of fraud.

3. Prescription Drug Diversion

Prescription drug diversion has received blame for contributing to the nation’s opioid epidemic; and, for this reason, combatting diversion is a top federal law enforcement priority. With this in mind, pharmacies must adopt comprehensive controls, policies, and procedures to ensure that their medications end up in the hands of patients who truly need them.

4. Electronic Prescription Compliance

Electronic prescriptions are continuing to play an increasing role in pharmaceutical practice. The DEA has established comprehensive regulations governing pharmacy electronic prescription applications, and pharmacists and pharmacy owners have affirmative obligations to ensure that all electronic prescriptions they fill are valid.

5. Federal Program Billing Compliance

Like all healthcare providers that bill the federal government for reimbursements, pharmacies must maintain strict compliance with the applicable program billing rules and regulations. Billing and coding mistakes can have severe consequences, and pharmacies must ensure that they have adequate internal and external controls in place.

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Special Areas of Concern with Regard to Pharmacy Compliance

In addition to the areas of compliance that are common among virtually all pharmacies that bill Medicare, Medicaid, Tricare, and other government healthcare benefit programs, certain pharmacies will face additional compliance obligations as well. For example, our pharmacy compliance attorneys have particular experience in the areas of:

1. Specialty Pharmacy Compliance

Due to the nature of their practice, specialty pharmacies face a number of unique compliance obligations. We represent specialty pharmacies with regard to federal benefit program and private pharmacy benefit manager (PBM) compliance.

2. Compound Pharmacy Compliance

Compound pharmacies face unique compliance obligations as well. We help compound pharmacies across the country bill the federal government with confidence while maintaining full compliance with the Controlled Substances Act.

Elements of a Pharmacy Compliance & Regulation Program

A healthcare compliance program must convince the government or auditor that the company and its key executives not just have a program in place, but that they are actually serious about following its self-imposed policies and standards. It is of critical importance to properly document each compliance effort and to set up mechanisms designed to demonstrate the company’s zero tolerance against unlawful behavior and operations. Each compliance program should consist of the following three features: policy, training, and enforcement.

  • Written Policies and Procedures
  • Compliance Officers
  • Compliance Training
  • Open Communication Channels
  • Internal Monitoring
  • Policy Enforcement

With respect to policies, the company should have waterproof documentation of its policies and standards of ethics. Such a collection may include Employment Manuals, Code of Conducts, and other corporate documents that outline the company’s expectation of its employees and affiliates.

  • Company & Operating Agreement
  • Employment Agreement
  • Independent Contractor Agreement
  • Marketing Agreement
  • Review of Marketing Materials
  • Code of Conduct
  • Employment Manual
  • Training Materials

The policies that define a company’s ethical goals must be conveyed to a company’s executive and staff. Regular compliance training on topics such as fraud and abuse laws, anti-kickback laws, Stark Law, or HIPAA and OSHA are mandatory elements of any serious compliance program in the healthcare industry.

FAQs: Developing a Pharmacy Compliance Program

Q: Do pharmacies need separate compliance programs that are specific to Medicare, Medicaid, and Tricare?

Pharmacies do not necessarily need separate compliance programs for Medicare, Medicaid, and Tricare; however, they must ensure that their programs address all pertinent billing rules and regulations. Each federal benefit program has its own unique set of requirements, and pharmacies that bill more than one program need to maintain program-specific compliance in order to avoid liability for fraudulent practices.

When we work with pharmacies that bill multiple programs, we structure their policies and procedures in such a way that they are integrated, comprehensive, and easy to follow. A compliance program is useless if it cannot be implemented effectively, so we make sure our clients have practical resources that they can efficiently deploy across all aspects of their pharmacy operations.

Q: Is it sufficient to buy an off-the-shelf pharmacy compliance program?

No, it is not. Unfortunately, there are a lot of these products out there, and they are often marketed as a “quick” solution to pharmacy compliance. However, the reality is that compliance programs need to be custom-tailored to pharmacies’ operations, and off-the-shelf products simply do not offer the flexibility or comprehensiveness that is required.

If your pharmacy is audited by the DEA or any other federal agency, simply having some compliance documents will not be enough to protect you. Instead, you will need to be able to demonstrate that both: (i) your pharmacy’s compliance program is fully comprehensive in light of its specific operations; and, (ii) you have effectively implemented the program so as to avoid billing errors, drug-related violations, and other compliance deficiencies.

Q: Who should I designate as my pharmacy’s compliance officer?

The answer to this question depends on a few different factors. Your pharmacy’s compliance officer should be intimately familiar with your pharmacy’s legal and regulatory obligations, and he or she should be in a position to monitor and enforce compliance without bias or self-interest. Additionally, serving in the compliance officer position takes time, so it is important to choose someone who can devote the time necessary. As we work to develop your pharmacy’s compliance program, we will also work with you evaluate your options and choose an appropriate compliance officer.

Q: What are the steps involved in monitoring compliance?

Monitoring compliance on an ongoing basis is just as important as developing your pharmacy’s compliance program. You need to be confident that your pharmacists and billing personnel (or third-party billing agency) are maintaining compliance, and you need to be able to promptly address any compliance deficiencies before they lead to exposure to civil or criminal enforcement proceedings.

Compliance monitoring involves various measures that are designed to identify billing violations or Controlled Substances Act violations as soon as they occur. This includes (but is not limited to) measures such as:

  • Regular reviews of billing records
  • Regular reviews of paper and electronic prescription records
  • Inspections to confirm pill counts
  • Periodic reviews of pharmacists’ and billing administrators’ day-to-day practices
  • Periodic in-depth audits of billing and prescription records

Q: What should pharmacies do when they uncover compliance deficiencies?

If your pharmacy’s monitoring efforts uncover a compliance deficiency (or if an employee or patient reports a potential issue), it will be necessary to remedy the issue as soon as possible. What is necessary in terms of remediation will depend on the nature and extent of the violation.

If there has been an isolated incident, then correcting the error and re-training the implicated employee may be sufficient. However, if there is a systemic issue, then more substantial action will be necessary. In all cases, taking remedial action (or failing to take all necessary remedial action) can have significant legal implications, so it is important to act on the advice of legal counsel.

Q: Do pharmacies need to update their compliance programs over time?

Yes, absolutely. When federal laws and regulations change, pharmacies must update their compliance programs in order to ensure that they are not adhering to outdated requirements. Likewise, when pharmacies expand their operations or begin working with new payors, they must carefully review their compliance policies and make any necessary additions or revisions.

Q: What are the most-important factors for choosing compliance counsel?

When choosing pharmacy compliance counsel, the most important factor is relevant experience. Federal healthcare compliance is a complex and nuanced area of legal practice, and pharmacy compliance is a subniche with its own unique and complicated requirements. At Oberheiden P.C., we pair our pharmacy clients with senior attorneys, former DEA agents, and other professionals who have devoted their careers to understanding the laws and regulations that apply to pharmacies and other providers, and we offer custom-tailored compliance solutions backed by extensive experience on both sides of federal pharmacy compliance enforcement matters.

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Your Compliance Consultants & Attorneys

Oberheiden, P.C. offers effective compliance programs, for pharmacies, to avoid or to mitigate government investigations. Our compliance attorneys bring in the experience of former government officials, former chief prosecutors for healthcare fraud from the Department of Justice, and team leaders and chief coordinators of the Medicare Fraud Strike Force. We have an impeccable track record when it comes to avoiding criminal charges in healthcare matters.

How To Select a Pharmacy Compliance Defense Attorney

Emergency Defense Package

We understand that some clients simply do not have the time to set up long-term compliance programs. Due to pending or imminent investigations, the goal of these clients is to accomplish as many compliance efforts as possible in a short amount of time.

We serve these clients with our “Emergency Defense Package”, by which we turn around corporate and compliance paperwork and set up OIG approved compliance programs within days from our engagement. The Emergency Defense Package is a proven protocol that summarizes decades of experience in healthcare investigations and it has been featured by news stations across the country.

Oberheiden, P.C.

This information has been prepared for informational purposes only and does not constitute legal advice. This information may constitute attorney advertising in some jurisdictions. Reading of this information does not create an attorney-client relationship. Prior results do not guarantee similar future outcomes. Oberheiden, P.C. is a Texas PC with headquarters in Dallas. Mr. Oberheiden limits his practice to federal law.

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