Here’s How Community Pharmacies Can Generate a Significant Increase in Revenue Through the 340(B) Program

The 340B Program, administered by Health Resources and Services Administration (“HRSA”), requires drug manufacturers participating in Medicaid to provide outpatient drugs to “covered entities” at significantly reduced prices. Generally, covered entities are facilities whose patients are from the most vulnerable populations, live in low-income households, are frequently uninsured and they include certain nonprofit hospitals and federal grantees/clinics. Some examples include but are not limited to federally qualified health centers (“FQHC”) or FQHC look-alikes, state-operated AIDS drug assistance programs, Ryan White Comprehensive AIDS Resources Emergency (CARE) Act clinics and programs, tuberculosis clinics, black lung clinics, Title X family planning clinics, sexually transmitted disease clinics, hemophilia treatment centers, urban Indian clinics and native Hawaiian health centers. 

Under the 340B program, covered entities can purchase outpatient medications from manufacturers at a discounted rate (between 20% to 50%) that is predetermined through an agreement between the manufacturer and the secretary of Health & Human Services. The covered entity will then administer or dispense discounted medications through entity-owned or contracted pharmacies. Said differently, independent pharmacies are able to contract with 340B-covered entities to dispense prescription medication to the covered entities’ qualified patients. Such a relationship provides a community pharmacy with the opportunity to provide real value to a patient seeking access to prescription medication while also adding an additional income stream to its existing business model. Covered Entities may establish agreements either through multiple contracts with individual pharmacies or through a single contract with a chain pharmacy that identifies the specific pharmacy locations that will support the Covered Entity’s 340B program. Based on the regulatory and legislative requirements necessary to minimize fraud and abuse within the program, contract pharmacies may be compensated at a higher dispensing rate to meet such standards and provide indigent care. In the above scenario, if the patient has insurance, the pharmacy will bill the insurance and receive reimbursement for the medication at standard rates. But because the medication was purchased at a discount, this results in an increased reimbursement amount, otherwise referred to as “340B savings”. 

The 340B program has had a great impact on access to HIV treatment and prevention services in the United States and stands to benefit many other vulnerable populations as well. If you operate a pharmacy and are interested in learning more about contracting with a covered entity in your community, please reach out to the Florida Healthcare Law Firm, we’d be happy to help.

Can Non-Physicians Engage in the Corporate Practice of Medicine in Florida?

Can Non-Physicians Engage in the Corporate Practice of Medicine in Florida?

The corporate practice of medicine (“CPOM”) is a legal doctrine that generally prohibitsunlicensed individuals and entities practicing in healthcare, including medicine, podiatry, dentistry, optometry, and chiropractic care. The CPOM prohibition aims to prevent unlicensed individuals or entities from influencing professional healthcare treatment decisions that heighten the risk of a provider dividing his or her loyalty between generating profits and administering quality care.

Florida is one of only a few states that do not specifically prohibit physicians from engaging in the practice of medicine through a corporate structure, with certain exceptions. For example, dentistry (Florida Statute §466.0285)and optometry (Florida Statute §463.014) practices still require those professionals to own the dental or optometry practice entirely, while Florida law does not prohibit the CPOM for physician practices. Notwithstanding the tools available for non-physicians to engage with the management and business aspects of a practice, such as a Management Services Organization, non-physicians still can have an ownership interest in a healthcare practice, subject to certain conditions.

The Corporate Practice of Medicine in Florida for Physician Practices.

In Florida, non-physicians can both own a medical practice on their own or jointly own a medical practice with other physicians.However, Florida requires entities with non-physician owners to register the practice as a health care clinic and a physician must be employed as a medical director to direct and supervise the clinical aspects of the practice.In other words, a physician may be employed by or contracted by non-physician owned entities for the delivery of healthcare services. For this arrangement, the non-physicians must not be engaged in the diagnosis and treatment of patients and cannot exercise any control over the physician’s professional judgment or the way he or she renders medical care to patients.

Florida’s Health Care Clinic Act requires health care clinics to obtain a license, unless an exemption applies.TheActmandates that facilities with non-physician owners to obtain a health care clinic license.

What Is a Clinic Under the Act?

Florida’s Health Care Clinic Act defines a “clinic” as “an entity where health care services are provided to individuals and which tenders charges for reimbursement for such services” (i.e., governmentpayors, such as Medicare and Medicaid, or private commercial insurance). The Act provides for exemptions that allow certain facilities to operate withoutobtaining a health care clinic license. If exempt,the Agency for Health Care Administration (“AHCA”)allows health care clinics to apply for a Certificate of Exemption.However, non-physicians with ownership interests in healthcare clinics do not fall under any exemption.

Healthcare providers must be careful to comply with the CPOM doctrine.While non-physicians may engage in the CPOM, it is important to ensure that the practice complies with the applicable laws and regulations. Violating the Health Care Clinic Act is a felony and could result in loss of license and repayment of all revenue for billed services, as well as other fines and penalties.

Does your practice store medical records via an electronic medical records platform?

“As of 2021, nearly 4 in 5 office-based physicians (78%) and nearly all non-federal acute care hospitals (96%) adopted a certified EHR. This marks substantial 10-year progress since 2011 when 28% of hospitals and 34% of physicians had adopted an [electronic medical records platform (“EMR”)]” says the Office of the National Coordinator for Health Information Technology. With a majority of the countries’ health care providers creating, accessing, storing, and transmitting personal health information (“PHI”) via the internet of things, the safety of our PHI is at the highest risk of nefarious use by hackers.

As of July 1, 2023, Florida Governor Ron Desantis signed into law Senate Bill 264.Although the majority of the bill outlines restrictions by foreign actors relating to real property; the end of the bill addresses changes to Florida Statute 408.051,“Florida Electronic Health Records Exchange Act”.

Section 408.051(3) has been amended to state as follows:

“SECURITY AND STORAGE OF PERSONAL MEDICAL INFORMATION. In addition to the requirements in 45 C.F.R. part 160 and subparts A and C of part 164, a health care provider that utilizes certified electronic health record technology must ensure that all patient information stored in an offsitephysical or virtual environment, including through a third-party or subcontracted computing facility or an entity providing cloud computing services, is physically maintained in the continental United States or its territories or Canada. This subsection applies to all qualified electronic health records that are stored using any technology that can allow information to be electronically retrieved, accessed, or transmitted”.

More likely than not your EMR platform is storing your data either on a physical server overseas or via the cloud which is controlled by a foreign country (not including Canada).If you are found not to be in compliance you could be at risk forcompensatory damages.

With this change there are many priority items that now must be taken into consideration if are to comply with the new law. Although it is unclear if a grace period will be offered, or what position the court will take towards these types of future lawsuits, one thing is for sure, PHI is one of the highest concerns of 2023 from a patient’s perspective.

We’ve seen shifts in PHI access, and the simplification of the medical records request procedure under the “21st Century Cures Act”, the federal and state governments are fixed on patient access and safety relating to their PHI.

I’ll leave you with a few questions: 1. Do you know if your EMR platform stores the information via the cloud or at a physical location? 2. When was the last time you updated your patient data privacy practices? 3. Did a healthcare lawyer prepare your policies and procedures relating to PHI? 4. Does your practice use a call center, and is that call center located within the United States, its territories, and/or Canada?