Whether you’ve worked your whole career building your business, inherited or purchased from family, or more recently acquired the business, at some point all owners start to think about the next chapters of their life and selling their business. The world of pharmacy isn’t much different from other businesses in this sense, and it can be hard for an entrepreneur, visionary, and owner to start forecasting life without the business they’ve given so much of their time, energy, focus, and money.
For some reason, it seems independent pharmacies think fraud, waste, and abuse prevention compliance is difficult. While it is boring, and it clearly has some scary ramifications when not followed, it’s actually very simple and easy to implement. In this article, we will discuss why having a Fraud, Waste, and Abuse or FWA compliance program is important, things you can do to get started, examples of other people who thought they didn’t need to have all their FWA items in place, the issues they got into and, some solutions to keep you from getting into hot water with Medicare and OIG.
The past few months have probably been a blur. If you worked with a broker, they more than likely handled a lot of the negotiations, paperwork and were great at saying “Don’t worry, we’ll handle it”, “Sign Here”, “Send me this document” etc. But what happens after you sign on the dotted line and your pharmacy or your files officially become someone else’s property? What additional items do you need to complete to tie up all the loose ends? And, most importantly, what is the broker you just paid 8-15% of the sales price of your business, going to do to help you?
The prospect of buying a pharmacy is enticing to pharmacists for a variety of reasons. The items at the top of the list are; freedom and responsibility of ownership, the chance to practice pharmacy on your own terms, do more to improve the health of your patients, and improve your earning potential. These are all realistic goals when you have your own location, however, the process of purchasing can be complicated and lengthy regardless of how well prepared you are.
Are you starting to feel that the practice of pharmacy is like the Abbot and Costello sketch “Who’s on First”? At every turn a new regulation is going into place; another merger of an insurer, chain, or healthcare system is occurring; some entity is auditing, inspecting, or reviewing your paperwork, files, and process; and someone new is dipping their hands into your pockets to take a little more of your reimbursements. Even with all those shenanigans going on, the biggest topic in pharmacy outside of DIR fees, is USP <800>.
Opening a successful independent pharmacy is a challenging undertaking for any pharmacist, especially with the competitiveness of today’s retail pharmacy market. Building a new pharmacy from the ground up doesn’t guarantee foot traffic, and leasing or owning a property doesn’t mean you’re ready to open for business.
Although a pharmacy’s true value is determined by what a buyer is willing to pay for it, there are a number of factors that go into a valuation. Beyond that, valuations happen for a variety of reasons, including retirement planning, expanding a current business, or adding a location. Less fortunate examples include dissolving partnerships, a buyout or dispute, and settlements of assets or estates. Or, in the case of purchasing a pharmacy, a valuation helps determine if the asking price has merit.
A colleague recently shared a news release about a physicians’ group that was hit with a $500,000 fine. The fine wasn’t a result of fraud, a misfiled prescription, or malpractice, as one might expect. Instead, the physicians’ group simply failed to have business associate agreements in place.
This led me to wonder two things. First, how common is it for people to go through eight or more years of school to become a doctor without fully understanding HIPAA? And second, if practitioners realize the importance of protecting patients, do they understand what they can put in place to protect themselves as the practitioner?