Transferring Prescriptions: Does Your State Ban Financial Incentives?

Transferring Prescriptions: Does Your State Ban Financial Incentives? by Elements magazine |

Does your state prohibit incentives for transferring prescriptions?

A recent ruling in Tennessee significantly alters the pharmacy landscape in the state and has brought to light regulations you may not be aware of in your state.

The Tennessee Board of Pharmacy recently enacted a rule to prohibit pharmacies from offering incentives to patients for transferring their prescriptions. Effective February 20, the rule states that a pharmacist “shall not incent or induce the transfer of a prescription absent the exercise of professional judgment.”

So, if you own a pharmacy in Tennessee and you offer rewards points, gift cards or cash to patients for transferring their prescription to your pharmacy, you’ll now need to find other ways to gain new patients—or risk losing your license or paying a $1,000 civil penalty.

The Tennessee Board of Pharmacy said transfer incentives have an overall negative effect on the
safe delivery of pharmacy services across the state. “Constant transfer of prescriptions for the purpose of obtaining ‘gas points’ or in-store discounts on non-pharmacy items complicates care delivery and hampers the formation of strong pharmacist-doctor-patient relationships,” the ruling stated.

As patients get prescriptions from more sources, the risk of dangerous interactions rises. “The pharmacist is responsible for drug utilization review for the patient and can catch possible serious or even life-threatening interactions,” said Reginald Dilliard, D.Ph., executive director of the Tennessee Board of Pharmacy. “Encouraging patients to transfer their prescriptions with financial incentives is counterproductive to this vital piece of patient care and a risk to their safety.”

A look at federal laws

Certain financial incentives for transferring prescriptions have been prohibited nationwide for Medicare and Medicaid beneficiaries since the introduction of the Health Insurance Portability and Accountability Act (HIPAA) in 1996.

The Act forbids any “remuneration,” defined as “waivers of copayments and deductible amounts (or any part thereof) and transfers of items or services for free or for other than fair market value.”

The law permits “coupons, rebates, or other rewards,” as well as inexpensive gifts. The Office of Inspector General (OIG), which is responsible for enforcing the law, allows non-cash or non-cash-equivalent gifts below $15 per item and $75 annually per person. Violating the law can result in a fine of up to $10,000 for each wrongful act.

In a 2002 special advisory bulletin, the OIG said incentives unfairly benefit large pharmacies over smaller pharmacies because of their greater financial resources. And incentives carry the danger of lower quality or unnecessary services as pharmacies attempt to offset the costs they lose with their gifts.

The Tennessee Board of Pharmacy has gone a step further than the federal law, prohibiting all types of incentives to all patients regardless of Medicare or Medicaid status.

Transfer incentives: good or bad?

Should incentives for transferring prescriptions be banned? It depends on who you ask. The debate focuses on the perception of what’s best for patients.

Proponents of banning incentives argue that they result in inconsistent patient care, decreased customer loyalty and increased risk of prescription errors. More importantly, they say, it also devalues the role of pharmacists and commoditizes prescription drugs, detracting from the dedicated patient care that’s essential to adherence and proper drug use.

Opponents argue that prohibition increases patients’ financial burden and diminishes business competition. Incentives mean more money in the patient’s pocket through discounts, credits and rewards. And when one business offers incentives, another business will offer better incentives to compete, resulting in lower health care costs for patients.

Prominent organizations like the American Pharmacists Association (APhA) and the National Community Pharmacists Association (NCPA) discourage the use of financial incentives for transferring prescriptions.

The National Association of Boards of Pharmacy (NABP) does not have an official stance on the issue.

What you can do

Whether you’re for or against prescription transfer incentives, you have other options to encourage patients to come to your pharmacy.

“Pharmacies can inform patients about the services offered and their areas of expertise,” said Carmen Catizone, M.S., R.Ph., D.Ph., executive director of NABP.

And, the Tennessee Board of Pharmacy notes that pharmacies can promote themselves within the confines of the law. “The Board of Pharmacy by statute protects patient safety and pharmacies may promote themselves in any fashion that does not compromise that safety or is any way unprofessional,” Dilliard said.

It’s possible that Tennessee’s ruling will spur more state pharmacy boards and state legislatures to consider adopting similar prohibitions. Keep an eye out for any changes to your state board of pharmacy’s laws to prevent a surprise fine you can’t afford.


Does Your State Prohibit Prescription Transfer Incentives?

How do you know if your state board of pharmacy prohibits incentives for transferring prescriptions?

The National Association of Boards of Pharmacy (NABP) doesn’t keep a record of this information. But other states have passed similar laws. The wording in the rules vary by state and some states’ rules are stricter than others.

Contact your state board of pharmacy to find out the specific restrictions in your state.

These states prohibit some form of incentives for prescription transfers:

  • Alabama
  • Arkansas
  • Mississippi
  • New Hampshire
  • New Jersey
  • New York
  • Oregon
  • Tennessee

Source: USA Today


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