So, You Want to Be in the Pharmacy Business? Building from scratch, acquisitions & other considerations.

pharmacy businessBy: Michael Silverman

Like many entrepreneurial endeavors, owning a pharmacy requires careful planning and an astute risk versus reward analysis. However, unlike other industries, venturing into a healthcare business brings with it an entire new world of regulations, and rightly so. Pharmacies don’t sell widgets they sell prescription drugs, and to people whose well-being depends on it being done correctly. As such, there’s a host of state and federal laws a pharmacy must abide by, intended to safeguard patients and the healthcare system as a whole. Don’t let regulatory hurdles alone serve as an insurmountable deterrent from entering into what can be a profitable and fulfilling profession; proactive compliance is the key to success! Here’s an overview of the general steps necessary to become a pharmacy owner, be it from scratch or by acquiring an existing practice. For the purposes of this article, let’s assume it’s a community/retail pharmacy that will be located in Florida.

So what’s better – building from scratch or buying something that’s already out there? Typical lawyer answer – it depends! But I won’t stop there; here are some considerations that must be taken into account to make a proper decision: (1) how quickly does the business need to be up and running? It’s typically a faster process to commence business by acquiring an existing pharmacy rather than buying one, but that depends on (2) what is out there in the current marketplace? If a stock acquisition, all of the known and unknown liabilities will be inherited by the new owner; proper due diligence on the pharmacy’s past is essential.Continue reading

Level 2 Background Screening – Your License Depends on It!

level 2 background screening

level 2 background screeningBy: Susan St. John

Providers licensed or regulated by the Agency for Health Care Administration must make certain that their employees and/or contracted personnel have had Level 2 Background Screening (criminal history background check) pursuant to Florida Statutes and Administrative Code within 10 business days of being hired. Also, if a potential employee or contractor has not been employed within the previous 90 days, even if that individual previously had level 2 background screening, the individual will need to go through submitting fingerprints again. Further, each employee or contracted individual that is subject to Level 2 Background Screening must renew the background screening every 5 years to be eligible for employment or continued employment with an AHCA licensed or regulated provider.

Fingerprint Retention Period

The 5 year expiration from the date of retention of fingerprints is the date that the Florida Department of Law Enforcement (“FDLE”) will purge fingerprints from storage, meaning if fingerprint retention renewal has not occurred prior to this date, the whole screening process, that is fingerprinting, etc., starts over. There is no “grace period” if fingerprints have been purged, which means the individual is no longer “technically” eligible for employment with an AHCA licensed provider (and perhaps other providers licensed and regulated by other state agencies such as Department of Health, Department of Children and Families, or Department of Elder Affairs). Further if the provider is in the process of an AHCA survey, accreditation survey, or renewal licensure application, not having a current Level 2 Background Screening for an employee or contractor might subject the provider to a statement of deficiency, assessment of administrative fines or fees, or denial of a licensure renewal application.Continue reading

FDA Stem Cell Guidance Explained: 1271.10(a) Criteria vs. The Same Surgical Procedure Exception

fda stem cell business

fda stem cell business

By: Matthew Fischer

Certain stem cell products fall under the definition of a HCT/P.  If so, unless an exception is met, the product will be subject to regulation by various laws and regulations such as the Food, Drug and Cosmetic Act (“FDCA”), Public Health Safety Act (“PHSA”), and 21 CFR 1271.  When determining which apply, 21 CFR 1271.10(a) and the exception in 21 CFR 1271.15(b) (i.e. the “Same Surgical Procedure Exception”) must be reviewed.  However, many are left asking: what is the relationship between the same surgical procedure exception and the four criteria set forth in 21 CFR 1271.10(a)?  Thanks to recent guidance released by the FDA, some clarification has arrived. Continue reading

Healthcare Marketing Lesson: Compound Pharmacy Kickback Scheme

healthcare marketingBy: Jacqueline Bain

Monty Ray Grow was a defensive back on the Florida Gators’ football team from 1990 until 1993. He contracted to play for the Kansas City Chiefs in 1994 and then for the Jacksonville Jaguars in 1995 and 1996. On February 5, 2018, he was convicted by a federal jury in Miami for his chief role in a massive healthcare marketing scheme designed to defraud Tricare.

Tricare is a health benefit program that provides civilian benefits for U.S Armed Forces military personnel, retirees, their dependents, and some military reservists. Tricare is a Department of Defense Program.

In September 2014, Grow entered into an agreement with a compounding pharmacy in Pompano Beach, Florida, wherein the pharmacy would pay Grow’s marketing company a commission equal to fifty percent (50%) of what the pharmacy netted in Tricare reimbursement from Grow’s referral of Tricare beneficiaries to the pharmacy. (Later on, Grow became an employee of the pharmacy.) Grow then used his commission to offer and pay recruiters to convince Tricare beneficiaries to use this pharmacy. Additionally, Grow offered and paid Tricare beneficiaries themselves to use this pharmacy.Continue reading

Healthcare Compliance: Providers Must Use Plans They Have in Place

medical practice complianceBy: Jacqueline Bain

In 2015, Assistant Attorney General Leslie Caldwell spoke publicly about the importance for every healthcare provider to not only have a compliance program on its shelf, but also being sure that the compliance program is “tailored to the unique needs, risks and structure of each business or industry.” Assistant Attorney General Caldwell explained, “the adequacy of a compliance program is a factor when [the DOJ] decide[s] how and whether to prosecute a company.  The lack or insufficiency of a compliance program can have real consequences for a company when a violation of law is discovered.”Continue reading

Big Rule Changes Proposed for DCF Licensed Substance Abuse Treatment Centers

substance abuse licensingBy: Jacqueline Bain

On December 29, 2017, the Department of Children and Families (DCF) submitted comments for proposed changed to rule 65D-30, governing licensed substance abuse service providers. The proposed rule includes significant changes as compared to old 65D-30, and should be reviewed as soon as possible by all DCF-licensed substance abuse service providers.  Comments must be received by DCF on or before January 19, 2018, and can be submitted via the form at the bottom of THIS LINK .The proposed changes are substantial, and we strongly recommend someone in each licensed service provider reviews them as soon as possible in order to ensure timely compliance.

This article will focus on changes in the licensing component of DCF’s rules.Continue reading

New HIPAA Guidance for Substance Abuse and Mental Health Information

HIPAA PHIBy: Dave Davidson

In December 2016, the US Congress passed the 21st Century Cures Act, which, among other things, provided for increased funding for treatment and research of mental health and substance abuse disorders.  That law also required the HHS Office of Civil Rights (OCR) to provide guidance in regards to HIPAA compliance in regards to those types of treatment.  In October 2017, President Donald Trump declared the opioid addiction epidemic to be a public health emergency, which will also result in additional resources being allocated to addressing the crisis.

In connection with both the new law and the President’s declaration, OCR published its HIPAA guidance in December 2017.  The guidance is intended to clarify how and when protected health information (PHI) can be shared in regards to patients in substance abuse and mental health treatment.  According to OCR Director Roger Severino, “HHS is using every tool at its disposal to help communities devastated by opioids, including educating families and doctors on how they can share information to help save the lives of loved ones.”Continue reading

Health Care Clinic Law Basics for Medical Businesses

HCCLBy: Jeff Cohen

The Florida Health Care Clinic License (HCCL) law was created in 2001 to create accountability of healthcare businesses that are not owned by certain healthcare providers (e.g. physicians).  The legislative thinking behind the law was that laypeople who acquire healthcare businesses that bill insurance companies have nothing to lose by “getting it (anything) wrong.”  By attaching the license requirement to the lay owned business, those business people have to pay close attention to regulatory details, or they risk losing their HCCL and the ability operate their business.  Accountability!Continue reading

Regenerative Medicine: Navigating New FDA Guidance for HCT/P

stem cell therapy

stem cell therapyBy: Matt Fischer & Susan St. John

The U.S. Food and Drug Administration (FDA) has issued new guidance for regenerative medicine manufacturers and healthcare providers.  At the core of the guidance are two central interpretations: 1) the FDA’s current interpretation of the minimal manipulation and homologous use criteria set forth in 21 CFR Part 1271; and 2) the FDA’s current view on the same surgical procedure exception under 21 CFR 1271.15(b).  Additionally, the FDA issued a notice to all interested stakeholders that the FDA intends to initiate increased discretionary enforcement over the next 36 months for human cell and tissue-based products.  Given these developments, healthcare companies and providers impacted by this guidance are strongly encouraged to ensure compliance with the FDA’s new interpretations.Continue reading

ZPIC Audit Avoidance for Home Health Providers

zpic audit medicare

zpic audit medicareBy: Matthew Fischer

Medicare beneficiaries are generally entitled to coverage for care received by a home health agency.  However, home health providers can expose themselves to large overpayment demands from Zone Program Integrity Contractors (ZPIC audit) if the face-to-face (FTF) encounter requirements for home health certification are not strictly followed.  On an increasing basis, FTF encounters have been the target of ZPIC review.  Providers view this position as an effort to use home health agencies to police the industry.  On the other hand, contractors see this as part of their mission to identify cases of suspected fraud and recoup inappropriate payments.  Thus, it is imperative that home health providers fully understand the requirements in order to withstand contractor scrutiny.Continue reading