STATE OF MAINE
118TH LEGISLATURE
FIRST REGULAR AND FIRST SPECIAL SESSIONS
Final Report
of the
COMMISSION TO STUDY THE
USE OF PHARMACEUTICALS
IN LONG-TERM CARE SETTINGS
March 1998
Members:
Michael J. Fiori, Chair
Senator Peggy A. Pendleton
Representative Thomas Kane
Representative Wendy Pieh
Laurel Coleman
John H. Grotten
Robert E. Carroll, Jr.
Kathryn G. Pears
Scott A. Richards
Ed Latham
Staff:
Deborah Friedman, Legislative Analyst
Office of Policy and Legal Analysis
Rooms 101/107/135, 13 State House Sta.
Augusta, Maine 04333
(207)287-1670
TABLE OF CONTENTS
Executive Summary
Introduction .............................................................................................
1
Reimbursement Formulas ....................................................................... 2
Consulting Pharmacists, Fees, Potential Conflicts ................................. 4
Rules on Dispensing of Medication ........................................................ 8
Vertical Integration and Conflict of Interest ........................................... 9
The Practice of Over-Prescribing ............................................................. 10
Stocking Patterns for Standard, Nonchargeable Medical Supplies .......... 11
APPENDICES *(Available in printed report only)
A. Legislation authorizing the Commission: Resolves 1997, chapter 71
B. Excerpts from the Maine Medical Assistance Manual
· 80.07-5. Dispensing Practices
· 80.09. Reimbursement
C. Federal Regulation Regarding Drug Regimen Review by
Consulting Pharmacists (42 CFR sec. 483.60)
D. American Society of Consultant Pharmacists,
Policy Statement on Inappropriate Business Practices
E. Article, “Consultant Pharmacist Business Practices:
Navigating for a Safe Harbor”, The Consultant Pharmacist, Vol. 8, No. 2 (Feb. 1993)
F. Arthur N. Lerner, Esq., Medicare and Medicaid Safe Harbors: Fraud and Abuse Issues for Consulting Pharmacy,
Paper presented by Arthur N. Lerner, Esq., to the American Society of Consultant Pharmacists Sixth Annual Conference,
March 1995
G. Excerpt from the State Of Maine Department of Human Services Principles of Reimbursement for Long-term care
Facilities
H. Letter from Department of the Attorney General Regarding Lack of State
Anti-kickback Law
I. Excerpt from the Maine Medical Assistance Manual Regarding Routine Supplies
J. Executive Summaries of Three Reports by the Office of Inspector General
on Prescription Drug Use in Nursing Homes, November 1997
· Report 1: An Introduction Based on Texas
· Report 2: An Inside View by Consultant Pharmacists
· Report 3: A Pharmaceutical Review and Inspection Recommendations
K. Example of Geriatric Pharmaceutical Care Guidelines
EXECUTIVE SUMMARY
The Commission to Study the Use of Pharmaceuticals in Long-Term Care Settings was created by Resolves 1997, chapter
71. Commission membership included representatives of long-term care recipients, long-term care pharmacists, long-term
care pharmacy providers, a physician and a nurse with long-term care experience, 2 members of the Joint Standing
Committee on Health and Human Services and one other legislator, and a pharmacist or designee from the Department
of Human Services with expertise in Medicaid reimbursement. The Commission was directed to examine the use of
pharmaceuticals in long-term care settings. The six topics the Commission was directed to examine and the findings
and recommendations with regard to each are as follows:
· Resolve Issue #1: Examine the reimbursement formulas given to long-term care pharmacy providers including fees for service and capitation rates for services
The Commission makes no recommendations on the issue of reimbursement formulas for long-term care pharmacy providers,
but asks the Legislature to consider the issues presented in the full report.
· Resolve issue #2: Examine the payment of a consultant fee to providers of long-term care pharmacy services and whether there is an inherent conflict of interest between providing consulting and dispensing services
The Commission recommends that a system of monitoring be put into place to ensure that long-term care facilities
are complying with federal law by entering into appropriate contracts with consultant pharmacists. Contracts must
provide for proper and adequate reimbursement for the services of the consultant pharmacist, to guard against inappropriate
activity under which a pharmacy offers to provide the consulting service for unreasonably low compensation in order
to obtain the dispensing services contract and make up for the losses through drug costs and filling fees.
The Commission recommends that Maine enact an anti-kickback statute similar to federal law that prohibits fraudulent
business practices.
The Commission urges long-term care facilities staff and their residents to educate themselves about the qualifications
and services offered by consultant pharmacists and about the potential for improved outcomes, quality assurance
and decreased pharmaceuticals costs from consultant pharmacists who offer a quality of service above and beyond
the minimum requirements. The Commission supports a market-driven philosophy for the provision of consultant services
and encourages consultant pharmacists to offer the highest quality of services.
· Resolve Issue #3: Examine the determination of new rules pertaining to dispensing pharmaceuticals in long-term care facilities, such as minimum supply, and fees charged for the same medication dispensed in the same month
The Commission recommends that the Department of Human Services periodically review its guidelines for dispensing
medications for a Medicaid resident, with consideration given for the changing needs of physicians and staff to
manage acute-care residents. Those residents may have multiple changes in medication therapies over short periods
of time.
The Commission recommends that long-term care facilities be made aware of problems and possible solutions to problems
relating to minimum supply, and that they work with all disciplines to ensure that the most reasonable, cost-effective
dispensing practices are offered and maintained.
· Resolve Issue #4: Examine conflict of interest created by concurrent ownership of long-term care facilities and of pharmacies or other related health care providers that provide services to residents
The Commission recommends that the Department of Human Services review the current prohibition against paying
a filling fee to pharmacies that own and provide services to nursing homes, to determine whether the current economic
situation justifies a continuation of the prohibition.
· Resolve Issue #5: Examine whether there is a practice of overprescribing in long-term care facilities
The Commission was unable to determine whether there is a practice of overprescribing in long-term care facilities
in Maine. The Commission does recommend the development of pharmaceutical care guidelines for geriatric residents
in long-term care facilities. Once developed, these guidelines would offer geriatric-focused clinical information,
assist in providing appropriate pharmaceutical care, and recommend acceptable and unacceptable drug products by
clinical indication. Such guidelines can be a valuable tool in enhancing the quality of care and improving outcomes
while providing more cost-effective drug therapy.
· Resolve Issue #6: Examine whether there are potential cost savings and other benefits from more efficient patterns for stocking standard, nonchargeable medical supplies
The requirement to provide house stock items is an issue that must be enforced on the nursing home level. Long-term
care pharmacy providers should be aware that these items are not billable to Medicaid residents. Private paying
residents should be reminded of their right to purchase these items from a pharmacy of their choice.
INTRODUCTION
The Commission to Study the Use of Pharmaceuticals in Long-Term Care Settings was created by Resolves 1997, chapter
71. Commission membership included representatives of long-term care recipients, long-term care pharmacists, long-term
care pharmacy providers, a physician and a nurse with long-term care experience, 2 members of the Joint Standing
Committee on Health and Human Services and one other legislator, and a pharmacist or designee from the Department
of Human Services with expertise in Medicaid reimbursement. The Commission was directed to examine the use of
pharmaceuticals in long-term care settings, and to examine specifically:
· Reimbursement formulas for long-term care pharmacy providers;
· Consulting fees to providers of long-term care pharmacy services and whether a conflict of interest exists between providing consulting and dispensing pharmacy services;
· Rules for dispensing of pharmaceuticals in long-term care facilities;
· Conflict of interest created by concurrent ownership of long-term care facilities and pharmacies or other related health care providers;
· Possible overprescribing in long-term care facilities; and
· The potential for cost savings and other benefits from more efficient patterns of stocking standard, nonchargeable medical supplies.
The Commission was convened on January 5, 1998 and was asked to expedite its study and complete its work by
January 23, 1998. At the first meeting of the Commission, members elected Michael J. Fiori as Commission chair.
During its two January meetings, commission members discussed the various issues listed in the Resolve creating
the study. Through those discussions, members gained a greater understanding of the legal and practical considerations
governing each issue and developed some specific recommendations. Following its last meeting, the Commission prepared
this report that, after review be commission members, was issued in March of 1998.
This report is a summary of Commission discussions and recommendations, prepared by Michael Fiori, Commission
Chair, with approval of the full Commission. Attached as appendices are supporting materials.
REIMBURSEMENT FORMULAS
· Resolve Issue #1: Examine the reimbursement formulas given to long-term care pharmacy providers including fees for service and capitation rates for services
Non-Medicaid reimbursement.
The level of pharmacy services reimbursement by third-party payors (payors other than Medicaid) is driven by
the market. Generally, the third party pharmacy benefit manager “dictates” the reimbursement level to the pharmacy
or pharmacist.
There is controversy in the industry over the low rates of reimbursement offered by third party plans. Prescription
department margins have dropped significantly in the past 5 to 10 years, jeopardizing the sustainability of many
pharmacies. As a consequence, many pharmacies have had to increase their volume of business in order to survive.
Medicaid reimbursement
Medicaid reimbursement includes a formula for reimbursement for the drugs themselves and a $3.35 filling fee.
The Medicaid filling fee has not been increased in approximately 8 years.
While several Commission members agreed that the pharmacist deserved an increase in the filling fee, it is recognized
that a fee increase would require approval from the Health Care Financing Administration (HCFA) if the proposed
increase were “outside the prevailing market.”
The State of Maine prescription filling fee/formula is currently lower than approximately half of the states.
Adding to the concern about the filling fee is the fact that Maine has recently begun deducting a 25-cent “processing
fee” from the $3.35 filling fee, which nets to the pharmacy a $3.10 filling fee. The legality of this deduction
is currently being challenged by at least one large chain pharmacy organization in Maine and several pharmacy associations.
The federal Health Care Financing Administration has not issued a final ruling on the challenge, but has preliminarily
stated that the deduction cannot be termed an “administrative fee” or other such terminology.
Differential Packaging Costs
Long-term care facilities utilize “unit-dose” packaging, usually some form of “blister-pack” packaging. This
makes it possible to return unused medications for a partial credit to the Medicaid program or private paying patient.
This type of packaging also improves safety and nursing home outcomes by ensuring that the proper dosage is given.
Unit-dose packaging uses more expensive material and requires more of the pharmacist’s or technician’s time than
the traditional “bottle and vial” packaging used in retail pharmacies. The preparation of the medications involves
wrapping each tablet or capsule in individual blisters, providing delivery reports, providing narcotic count sheets
and breaking tablets for unusual doses. It has been estimated by several long-term care pharmacy providers that
the process requires 2 to 3 times more time to prepare, but there is no consideration in the Maine program for
this increased cost to the pharmacy providers. They are paid the same fee that is given for traditional retail
pharmacy packaging. Some other states do have a fee differential for unit-dose packaging.
The Department of Human Services recently adopted a rule allowing for higher rates of reimbursement to a pharmacy
that uses a unit-dose dispensing system that results in no return of drugs. Those pharmacies will receive a 2.5%
higher rate of reimbursement as an incentive to initiate such a system and to defray the added costs. The current
reimbursement cap is average wholesale price (AWP) minus 10%; under this program, the cap is AWP minus 7.5%.
The Department believes that the savings to the State from not having to process returns or prepare the financial
reporting will offset the added expense. Cost savings have not yet been determined for the project, which began
in the spring of 1997. (See Appendix B, section 80.09-A of Chapter II of the Maine Medical Assistance Manual)
Capitation rates
Capitation rates and formulas were briefly discussed, but it was concluded that since the reimbursement is market-driven
no company is now precluded from offering capitation or using capitation rates or formulas.
· Recommendations/Considerations: The Commission makes no recommendations on the issue of reimbursement formulas for long-term care pharmacy providers, but asks the Legislature to consider the issues presented in the discussion.
CONSULTING PHARMACISTS, FEES, POTENTIAL CONFLICTS
· Resolve issue #2: Examine the payment of a consultant fee to providers of long-term care pharmacy services and whether there is an inherent conflict of interest between providing consulting and dispensing services
Commission members decided that this issue involves 3 areas to be considered: whether there is an inherent conflict
of interest when pharmacies provide both consulting and dispensing services; the reimbursement rates and practices
of consultant pharmacists in Maine; and guidelines and criteria for consultant pharmacists to long-term care settings.
Federal requirements for consultant pharmacists
Federal Medicaid law requires long-term care facilities to employ the services of a licensed pharmacist to review
drug regimens and perform other designated services. 42 Code of Federal Regulations, section 483.60. These consultant
pharmacists practice under federal and state regulations. These regulations are fairly general in nature, but
require that a pharmacist:
1) Be hired under a written contract as a consultant to the facility;
2) Perform routine inspections of the pharmaceuticals storage areas;
3) Perform drug-regimen reviews of the residents’ charts;
4) Check emergency and starter dose boxes;
5) Review medication administration techniques;
6) Provide in-services, attend policy meetings, etc.; and
7) Provide written reports of their activities, findings and recommendations.
The level of service required of the consultant pharmacist is determined by the particular licensing status of
the facility, e.g., skilled nursing facility, intermediate care nursing facility and boarding care.
Reimbursement to consultant pharmacists
Payment to consultant pharmacists is often negotiable, and covers 2 types of services -- the “special services”
which relate to the care of an individual resident, and “routine services” relating to the facility generally,
e.g. review of medication storage areas and in-service education.
Federal law requires a monthly review by a licensed pharmacist of the drug-care regimen of each patient. Maine’s
Medicaid reimbursement principles provide for a special services allowance of up to $2.50 per resident review per
month for each review performed in addition to any pharmacist consultant fees. This “cognitive services fee” is
essentially a pass-through for the nursing home in the per diem rate.
Payment for services other than the drug-regimen review is more controversial. Most larger providers of these
services charge approximately a $1.00 per resident per month “consulting fee” for all other services performed.
For Medicaid residents, facilities are reimbursed a certain rate per diem for which the total care of the resident
is covered. This includes dietary, social services, nursing, room rate and activities. Out of these per diem
monies come reimbursement to the consultant pharmacist for services other than drug-regimen review.
In recent years, some facilities have negotiated with some pharmacies to provide the entire consultant pharmacist
package, including drug-regimen review, for the $2.50 drug-regimen review special service fee. In these instances,
there is no other reimbursement to the consultant pharmacist. In essence, the facility is paying no fee for routine
service by the consultant pharmacist, e.g., in-service education, physical review of medication stations and med
carts, and maintenance of emergency drug and starter-does kits. This allows the facility to retain more of its
per diem monies to be used for other services.
This practice by both facility and pharmacy may be in violation of federal law. The federal anti-kickback law
prohibits a person from offering or receiving remuneration in exchange for ordering, recommending, arranging or
referring a service covered by Medicare or Medicaid. 42 USC §1320a-7b. According to a 1995 paper presented
to the American Society of Consultant Pharmacists by Arthur N. Lerner, Esq, provision of consulting services to
long-term care facilities at no or reduced charge in consideration for status as preferred dispensing pharmacy
to inpatients of the facility could be found to violate the federal anti-kickback law.
Facilities defend the practice by stating that they are paying a $2.50 consultant pharmacist fee per resident
per month and long-term care pharmacy providers use this as a competitive edge to induce contracts from facilities.
Current hourly rates for pharmacists in Maine, without benefits, range from $27 - $32 per hour. The amount of
time a consultant pharmacist spends in a facility doing required work varies considerably among facilities and
professionals, but 6 to 12 hours per month for a facility with 50 to 100 residents is a reasonable estimate.
In recent years, the Office of Inspector General (OIG) of the federal Department of Health and Human Services
has adopted “safe harbor” regulations to further define the scope of the federal Medicare and Medicaid fraud and
abuse statutes. These provisions were first published in the Federal Register on November 5, 1992 in interim final
form. Since that time, there have been many business practices of pharmacists that have received increased scrutiny
by federal and state watchdog agencies.
The American Society of Consultant Pharmacists has issued a “Policy Statement Regarding Inappropriate Business
Practices in Long-Term Care Pharmacy” which comments on activities considered to be inappropriate and possibly
illegal. Among the activities falling into this category, according to the ASCP, is “offering or providing a health
facility consultant pharmacist services at no charge, below-market value or below cost in exchange for obtaining
or maintaining the business of the facility. (See Appendix D)
State anti-kickback laws exist with respect to the Medicaid program in nearly every state, according to Arthur
Lerner. These laws largely mirror the federal law. In addition, more states are beginning to enact anti-kickback
laws with respect to non-governmental payors.
In Maine, there is no anti-kickback statute. (see Appendix H for a copy of the letter from the Department of
the Attorney General)
Conflict of Interest
The question has been raised whether there is a conflict of interest when the providers of pharmacy dispensing
are also the providers of consultant pharmacy services in long-term care facilities. Commission members felt that
it would be unlikely for the pharmacist to control utilization of medication in a way that benefited the pharmacy,
since the pharmacist does not prescribe the medication. The pharmacist dispenses orders as received from the medical
practitioners.
Under the federal regulation governing drug-regimen review, 42 CFR §483.60, the consultant pharmacist is
required to notify the facility, nursing staff and physician if there are any irregularities, such as drug interactions,
over-utilization and insufficient lab data to justify optimal usage of medications.
In general, Commission members felt that many of the questions surrounding conflict of interest are answered when
good standards of practice are adhered to. Long-term care pharmacists practice in conformity with federal and
state laws and rules. Some consultant pharmacists may enjoy a competitive advantage by increasing their knowledge
and skills in this specialty practice by membership and participation in organizations and associations, such as
the American Society of Consultant Pharmacists. Other pharmacists may attain certification from national professional
organizations as a geriatric pharmacy practitioner through further study and examination.
Recommendations/Considerations
We recommend that a system of monitoring be put into place to ensure that long-term care facilities are complying
with federal law by entering into appropriate contracts with consultant pharmacists. Contracts must provide for
proper and adequate reimbursement for the services of the consultant pharmacist, to guard against inappropriate
activity under which a pharmacy offers to provide the consulting service for unreasonably low compensation in order
to obtain the dispensing services contract and make up for the losses through drug costs and filling fees.
We recommend that Maine enact an anti-kickback statute similar to federal law that prohibits fraudulent business
practices.
We do not believe there is a need to develop requirements for the practice of consultant pharmacy beyond the current
federal and state laws and rules. We urge long-term care facilities staff and their residents to educate themselves
about the qualifications and services offered by consultant pharmacists and about the potential for improved outcomes,
quality assurance and decreased pharmaceuticals costs from consultant pharmacists who offer a quality of service
above and beyond the minimum requirements. The Commission supports a market-driven philosophy for the provision
of consultant services and encourages consultant pharmacists to offer the highest quality of services.
RULES ON DISPENSING OF MEDICATION
· Resolve Issue #3: Examine the determination of new rules pertaining to dispensing pharmaceuticals in long-term care facilities, such as minimum supply, and fees charged for the same medication dispensed in the same month
The Maine Medical Assistance Manual provides rules to ensure that minimum supplies of medications are dispensed
and that fees charged for the medication are appropriate. Given the fact that the characteristics and needs of
nursing home residents have changed since adoption of the rules, those rules need to be reexamined and updated.
Nursing home admission criteria were modified several years ago to change the function of most facilities to care
for only severely ill patients and to shift many others to boarding care facilities. Consequently, the medication
need or usage profile has changed considerably. Current Medicaid rules require a minimum supply of 30 days in
most cases. In the Medicare setting, particularly in rehabilitation, patients may stay 2 to 4 days or in many
cases less than 30 days. To decrease waste and the effort involved in return of medication, a maximum supply of
fewer than 30 days, perhaps 14, might be considered.
If the minimum supply for Medicaid residents were increased, pennies may be saved at the front end, but dollars
would be wasted in the long-run because of the increase in medications that would have to be destroyed because
they become out of date. USP guidelines dictate that expiration dating be 25% of the manufacturer’s date on the
outside of the bottle, or 6 months, whichever is less. The more medication is dispensed, the more that becomes
out of date and is destroyed. Second, long-term care facilities do not have the space to store an increased supply
of medication. Finally, pharmacy inventory would need to be increase to supply the excessive amounts.
Recommendations/Considerations
We recommend that the Department of Human Services periodically review its guidelines for dispensing medications
for a Medicaid resident, with consideration given for the changing needs of physicians and staff to mange acute-care
residents. Those residents may have multiple changes in medication therapies over short periods of time. Pharmacists
should be made aware of the current guidelines and any changes to them.
We recommend that long-term care facilities be made aware of problems and possible solutions to problems relating
to minimum supply, and that they work with all disciplines to ensure that the most reasonable, cost-effective dispensing
practices are offered and maintained.
VERTICAL INTEGRATION
AND CONFLICT OF INTEREST
· Resolve Issue #4: Examine conflict of interest created by concurrent ownership of long-term care facilities and of pharmacies or other related health care providers that provide services to residents
To protect federal programs from paying excessive amounts for services and products, federal law provides that
payment may be made only for transactions that are made at “arm’s length.” In an attempt to advise the Department
of Human Services how to comply with this requirement, the Maine Attorney General prepared a list of transactions
that should not be considered arm’s length. As a result of this advice, the Department does not pay a filling
fee for services provided by pharmacies that also own and provide services to nursing homes (vertically integrated
companies).
Commission members felt that, although there may have been problems in the past with overcharging, the current
economic climate justifies the department’s review of the prohibition against paying a filling fee. Presently,
many pharmacy providers (hospitals, retailers, etc) have access to buying groups to strengthen their buying power
The possibility that the factual situation has changed with respect to the purchasing power among groups . In
the late sixties or early seventies, this was not the case and the state was instrumental in passing the law to
prevent excess profits in vertically integrated companies.
Recommendations
We recommend that the Department of Human Services review the current prohibition against paying a filling fee
to pharmacies that own and provide services to nursing homes, to determine whether the current situation justifies
a continuation of the prohibition.
PRACTICE OF OVER-PRESCRIBING
· Resolve Issue #5: Examine whether there is a practice of overprescribing in long-term care facilities
The Commission is concerned about the potential for over-prescribing of medication, but was unable to determine
whether there is such a practice in Maine. None of the materials available to the Commission during its brief
study revealed evidence of this practice in Maine.
Concerns about over-prescribing and excessive length of therapy might be reduced by the use of disease state management
and pharmaceutical care guidelines. These guidelines could be developed by soliciting input from physicians and
others who prescribe medication, medical directors, administrators, directors of nursing, staff nurses and consultant
pharmacists. Once developed, the guidelines would be implemented using a team approach to involve those who write
prescriptions, consultant pharmacists and nurses.
There are several existing examples of geriatric pharmaceutical care guidelines that are being used in long-term
care facilities in other states and Canada. These were briefly discussed by the Commission. It is anticipated
that use of such guidelines would enhance the ability of health care practitioners to provide quality care, while
reducing costs, much as the use of drug management has in hospital settings.
It was also suggested that the use of guidelines might allow drug-regimen reviews to be performed prospectively,
e.g., at the time of admission, by an internal consultant pharmacist and followed up by an external consultant
pharmacist at the facility. For pharmacies employing this service, efficiencies and improved outcomes could result.
Recommendations/Considerations
We recommend the development of pharmaceutical care guidelines for geriatric residents in long-term care facilities.
Once developed, these guidelines would offer geriatric-focused clinical information, assist in providing appropriate
pharmaceutical care, and recommend acceptable and unacceptable drug products by clinical indication. Such guidelines
can be a valuable tool in enhancing the quality of care and improving outcomes while providing more cost-effective
drug therapy.
STOCKING PATTERNS FOR
STANDARD, NONCHARGEABLE MEDICAL SUPPLIES
· Resolve Issue #6: Examine whether there are potential cost savings and other benefits from more efficient patterns for stocking standard, nonchargeable medical supplies
Standard, nonchargeable medical supplies are those supplies not paid for separately by Medicaid. These “house
stock” items are expected to be covered under the per diem rate of reimbursement to the nursing home. The Medical
Assistance Manual lists the categories of items that are considered house stock, including laxatives, aspirin,
cough and cold syrups, etc. (See Appendix I) Medicaid residents must receive these items at no charge.
Most facilities also have a list of “standing order” items. These items are selected products from several categories,
e.g. pain medications, laxatives, antacids, that the facility may also provide to private paying patients without
charge, although they are not required to do so. Private paying residents have freedom of choice to obtain these
supplies from a pharmacy of their choice. Although these residents are informed of this right, they often do not
exercise it.
Recommendations/Considerations
The requirement to provide house stock items is an issue that must be enforced on the nursing home level. Long-term
care pharmacy providers should be aware that these items are not billable to Medicaid residents. Private paying
residents should be reminded of their right to purchase these items from a pharmacy of their choice.
APPENDICES
*(All appendices, except A, are available in printed report only)
A. Legislation authorizing the Commission: Resolves 1997, chapter 71
B. Excerpts from the Maine Medical Assistance Manual
· 80.07-5. Dispensing Practices
· 80.09. Reimbursement
C. Federal Regulation Regarding Drug Regimen Review by
Consulting Pharmacists (42 CFR sec. 483.60)
D. American Society of Consultant Pharmacists,
Policy Statement on Inappropriate Business Practices
E. Article, “Consultant Pharmacist Business Practices:
Navigating for a Safe Harbor”, The Consultant Pharmacist, Vol. 8, No. 2 (Feb. 1993)
F. Arthur N. Lerner, Esq., Medicare and Medicaid Safe Harbors: Fraud and Abuse Issues for Consulting Pharmacy,
Paper presented by Arthur N. Lerner, Esq., to the American Society of Consultant Pharmacists Sixth Annual Conference,
March 1995
G. Excerpt from the State Of Maine Department of Human Services Principles of Reimbursement for Long-term care
Facilities
H. Letter from Department of the Attorney General Regarding Lack of State
Anti-kickback Law
I. Excerpt from the Maine Medical Assistance Manual Regarding Routine Supplies
J. Executive Summaries of Three Reports by the Office of Inspector General
on Prescription Drug Use in Nursing Homes, November 1997
· Report 1: An Introduction Based on Texas
· Report 2: An Inside View by Consultant Pharmacists
· Report 3: A Pharmaceutical Review and Inspection Recommendations
K. Example of Geriatric Pharmaceutical Care Guidelines
Appendix A
Legislation Authorizing the Commission
CHAPTER 71
H.P. 122 - L.D. 146
Resolve, to Establish the Commission to Study the Use of
Pharmaceuticals in Long-term Care Settings
Sec. 1. Commission established. Resolved: That the Commission to Study the Use of Pharmaceuticals in
Long-term Care Settings, referred to in this resolve as the "commission," is established; and be it further
Sec. 2. Commission membership. Resolved: That the commission consists of the following 10 members:
1. One pharmacist representing long-term care pharmacy providers;
2. One long-term care pharmacist;
3. One pharmacist representing a retail pharmacy;
4. One pharmacist, or a designee, from within the Department of Human Services with expertise in Medicaid reimbursement;
5. Two members of the Joint Standing Committee on Health and Human Services and one other Legislator;
6. One member representing persons receiving long-term care;
7. One physician with experience in long-term care; and
8. One registered nurse with experience in long-term care.
The members of the commission are appointed jointly by the Governor, the President of the Senate and the Speaker
of the House; and be it further
Sec. 3. Appointments; meetings. Resolved: That all appointments must be made no later than 30 days following
the effective date of this resolve. The appointing authorities shall notify the Executive Director of the Legislative
Council upon making their appointments. When the appointment of all members is complete, the chair of the Legislative
Council shall call and convene the first meeting of the commission within 14 days after all appointments are made.
The commission shall select a chair from among its legislative members; and be it further
Sec. 4. Duties. Resolved: That the commission shall examine the use of pharmaceuticals in long-term
care settings. Specifically, the commission shall examine the following:
1. The reimbursement formulas given to long-term care pharmacy providers including fees for service and capitation
rates for services;
2. The payment of a consulting fee to providers of long-term care pharmacy services and whether there is an inherent
conflict of interest between providing consulting and dispensing services;
3. The determination of new rules pertaining to dispensing pharmaceuticals in long-term care facilities, such
as minimum supply, and fees charged for the same medication dispensed in the same month;
4. Conflict of interest created by concurrent ownership of long-term care facilities and of pharmacies or other
related health care providers that provide services to residents;
5. Whether there is a practice of overprescribing in long-term care facilities; and
6. Whether there are potential cost savings and other benefits from more efficient patterns of stocking standard,
nonchargeable medical supplies; and be it further
Sec. 5. Staff assistance. Resolved: That the commission shall request staff and clerical assistance from the
Legislative Council; and be it further
Sec. 6. Report. Resolved: That, no later than January 1, 1998, the commission shall submit a report,
together with any necessary implementing legislation, to the Joint Standing Committee on Health and Human Services
with a copy to the Executive Director of the Legislative Council. If the commission requires an extension, it
may apply to the Legislative Council, which may grant the extension; and be it further
Sec. 7. Reimbursement and compensation. Resolved: That the commission members who are Legislators are
entitled to receive the legislative per diem, as defined in the Maine Revised Statutes, Title 3, section 2 and
expenses for attendance at meetings of the commission. Other members are not entitled to compensation; and be
it further
Sec. 8. Meetings. Resolved: That the commission may meet up to 3 times; and be it further
Sec. 9. Appropriation. Resolved: That the following funds are appropriated from the General Fund to
carry out the purposes of this resolve.
1997-98
LEGISLATURE
Commission to Study the Use of Pharmaceuticals
in Long-term Care Settings
Personal Services $495
All Other 950
TOTAL $1,445
Provides funds for the per diem and expenses of members of the commission who are Legislators and miscellaneous
costs, including printing, of the Commission to Study the Use of Pharmaceuticals in Long-term Care Settings.
See title page for effective date.
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