In this podcast, Jeff Hedges and Dr. Lisa Faast discuss different types of audits happening in the pharmacy industry. One particular audit focuses on diabetic supplies, where pharmacies are being audited for purchasing these supplies from authorized distributors. Failure to comply can lead to legal action and hefty fines.
They also touch on attestations required by PBMs and NCPDP, emphasizing the importance of filling them out accurately and promptly. Additionally, they mention audits related to COVID-19 vaccines, with state health departments scrutinizing the dispensing of vaccines and the need for proper documentation and standing orders. Non-compliance with vaccine audits can result in Department of Health audits and potential license implications.
Lisa Faast:
Well, hello, everyone. I'm sorry to say that I have kind of a depressing topic today. But it's one that is absolutely critical that you need to be aware of. So audits, we're going to be chatting with Jeff hedges from RJ hedges today, and going through all the different kinds of audits that are happening in pharmacy right now, because it is certainly a larger and more expansive than just maybe the typical PBM audit that you are used to. So as I said before, my guest today is Jeff hedges. He is really one of I mean, the leading person on compliance with all things pharmacy, I don't think there's anybody that knows more about how to keep a pharmacy compliant with 1000 different things than with Jeff. So, before we dive into the different types of audits, I want to make sure that you have a chance to introduce yourself, Jeff, we are doing this compliance series. So other people might have heard of you, but there might be somebody that this is the very first episode that they're listening to. So go ahead and give us an overview of all the awesome things that RJ hedges does to help pharmacy stay compliant with the multitude of regulatory requirements.
Jeff Hedges:
Okay, thank you, Lisa. Yes, my name is Jeff hedges. I am this President CEO of RJ hedges and Associates, and the big metropolis of new Florence, Pennsylvania. Our company provides a all compliance for pharmacies, and dma's. Starting with HIPAA fraud, waste and abuse, pharmacy compliance, immunizations, non sterile compounding, and DME, it's virtually everything that can happen in a pharmacy. Our program is written for you. And it's interactive. So it works really, really good. Nice thing about it is it frustrates the hell out of a lot of inspectors because everything is it figures tip for the pharmacy.
Lisa Faast:
Yeah, you guys make it easy, not only for the pharmacy to become compliant, but really I think the kicker is because there's, you know, you could force compliance yourself, I mean, you can just brute force it and manually become compliant. In the sense of like, go through all the regs and figure it out yourself. But I think the magic from your guys's system comes when you are audited, which is what we're going to be talking about today is it's really easy to pass the audits because you've got everything so organized. one click access to, you know, prove that you've done all the things that you're supposed to be doing. And so to me, that's the difference as somebody who has gone through and did a lot of manual work, like for compounding compliance back in my first pharmacy, you know, that was really the thing, because you had this big binder that you know, you basically needed to waitlist, you know, off the thing and flip through. And it's like, here's the signature, you don't want to do that with your software now. And so that I love that aspect. So we're going to be talking about audits today. And actually, there's a lot of different audits. And we probably aren't even going to cover everything that's out there. But we really wanted to highlight what pharmacies are experiencing right now. So we're recording this in spring of 2023. And we're going to be highlighting the types of audits that you as a pharmacy owners should be aware of, make sure you're compliant, get your ducks in a row before you're audited. And if you if you don't know how to get your ducks in a row, then definitely call RJ hedges and he'll help you get your ducks in a row. But let's go ahead and start with one that the chatter has just increased tenfold, at least that I've seen with being audited on diabetic supplies. And this is one that so many pharmacy owners that I talked to are just completely unaware of how and why they're supposed to purchase diabetic supplies in a certain way in order to be compliant. So can you go ahead and give us the rundown of what's happening with diabetic supplies and why are pharmacies being audited on them?
Jeff Hedges:
So what's happening is this company called Life skin. They are the manufacturer and provider of the the glucose monitors and diabetic strips. What's happening is you get a rebate when you are dispensing these items and it originates with my skin. Well if you're buying your strips, especially your strips from another vendor, like the one touch and you're going there's a company up in Wisconsin that's doing this, their sound them to him to you and I'll reduce costs, which is great. Problem is they scan is paying rebates back to the authorized dealers. So they're paying out these millions of dollars and no one's buying the strips from them so they can see it from a larger perspective. So they're drilling down and we're Getting what the PBM is and love working with the wholesalers. What happens is you get a letter in the mail from attorney. And it's going to cover all the all the dispensing actions you've done. That didn't go through a lifescan authorized vendor, which is your normal wholesaler. So you get this list. And it covers every line, every person, every dispensing action. And at the bottom and all the thing, it's the letter, it says, please contact us so we can arrange settlement. And also, if you don't respond, they're going to sue you. And the way they have listed on this program, there's no room for negotiation, because they got everything for you. So the clients I've had so far, I tell them, I said, You got to work this out, you can't ignore it. column, and then be nice, and say, How can we resolve this in a meaningful way and try to negotiate? They're not gonna they're gonna want to negotiate because they've lost his money, but they also don't want to go to court. If they go to court, and took a spent a boatload of money. So are you but the best way is just fall on your sword? plead ignorance, I didn't realize that person vendor was not an authorized vendor? And how can we make this go away? If you talk, when you start off on that tone, they will because they're getting yelled at by everybody. So when you come in Nice, and you want to find a solution, they're happy, they're gonna relax. Yeah, what their listing that might be 100,000, or $75,000, which big and, and then you just have to figure it out, work it through, you can get an attorney involved, but that's going to put another attorney on their site above, and now you're gonna see that whatever that number is, it's gonna seem small by the time it's over, because they're gonna charge the crap out, he is still gonna have to paid full price.
Lisa Faast:
Yep, I agree. And so at the base of this comes from the requirement that you have to buy diabetic strips from an authorized distributor, I abbreviate a D. And then sometimes they're like, what is an ad, it's like an authorized distributor. And it's like, well, isn't a wholesaler an authorized distributor, and is not the same thing. And it's also not the same thing to be in a BBB Accredited, and an authorized distributor or wholesaler can be NADP accredited, and not an authorized distributor for a diabetic product. And this is not just a requirement of lifescan, as, as you mentioned, you know, there's authorized distributors for Abbott, and for all the other many, you know, manufacturers of the brand name test strips. And so, you know, the question I get a lot is, How can you find out if your wholesaler or wherever you're buying your test strips from is an authorized distributor. And, and really, it's, it's very easy to do, just go to the lifescan website, Abbott website, they actually make it pretty easy to find those authorized distributors. And you will probably be surprised if you're listening to this and have never looked at it, how small that list is, you know, you get all these faxes, and all these calls from all these wholesalers, you know, selling test strips, and you think they're the, you know, there must be hundreds of authorized distributors. But it's actually a very, very small list of authorized distributors. And so what does that mean? This was created to help tamp down on the black market of test strips, right? I mean, Jeff, you've been around long enough. And I've been around long enough to remember those, you know, the scams of people used to buy companies and buy people's test strips that have been dispensed, buy back from the patient and then resell them to pharmacies, and it's like, how can I get this test strip class price, it's like, there's gotta be a reason, you know, they're not the only you know, that. It's because they didn't procure it properly. And so this whole authorized distributor was really keen to protect, you know, the communities as a whole as to not smell sell gray market or black market products. But and so whenever you're billing somebody, you have to make sure that you're buying for an authorized distributor. Now, if you're selling your test strips cash and sticking them on the counter, nobody's gonna come looking at those dispensing because they're not really dispensing, you know, because there are over the counter products. But anytime you're billing somebody for test strips, it needs to be from an ad. Anything else to add to that, Jeff?
Jeff Hedges:
yeah, it's, you got to do it. I mean, the fines are too big and you don't have they're so good at tracking now. You really don't have an option. So yeah, be careful where you go and buy him. And also, there's, there's company still out there buying strips for patients and I had Why call me? And they said, Oh, we see you're diabetic. I said, huh, how do you know I'm a diabetic? Because they saw my information. And they bought it. So they said, well, we want to save, get you some money. I said, Great. So the conversation is going back and forth on it. They finally got to the point, this, just tell you, Doc, that you really concerned about your diabetes, and you want to test eight times a day? Well, if you're insulin dependent, you're only allowed to have a testing three times a day, and if you're not interested at once, so I said, Okay, I talked to my doc, they said, Fine, when you get them, please send them to us. Here's the name and the address. And we will send you a lease $20 A box no matter what the brand. At that point, I said, Are you recording this? And they say, oh, yeah, we record this for, for training purposes. And all that said, perfect. I said, again, my name again, a hap at that time, I happened to be on one of the credit aid boards, board of directors. And I said, when we hang out, I'm going to contact the FBI, and office inspector general. And I will make sure that you give this recording to the president of the company, because you're liable to have some people showing up in a suit in next couple of days. Click there we go.
Lisa Faast:
some, so yes, it is still happening. rampid. And so yes, you want to be sure who you're purchasing from and purchasing your drug products is different requirements than purchasing your your diabetic supplies, it's actually more restrictive, purchasing your diabetic supplies, which seems a little weird, but there's actually fewer, you know, kind of approved people to buy them from so it's really important that you watch out for that. All right, let's move on from diabetic supplies over to attestations. attestation has been a word that I've used a whole lot in the last like year and a half because you needed all the COVID attestations for the OTC test, which will get the COVID audits here in a bit. But there's a whole bunch of attestations that are required by the PBM by NCPDP. Let's go over those and just, you know, kind of a quick almost checklist, make sure pharmacies understand what it is that they need to have. And what is that proof that you need to show when somebody shows up? And he's like, where's this esta? attestation?
Jeff Hedges:
Okay, so we'll start with the PVS. The PBMs are now finally starting to work with NCPDP. That's why when you you have to upload your licenses, your insurance policy, you get those emails, they're everything's being pulled from NCPDP off of their credentialing database. And then when you do to read traditionally, and with NCPDP, if you notice the questions actually make more sense. And the answers that really happen are there. So I worked with them a few years ago, and we rewrote everything. And that's really PBMs didn't want it because they didn't like it. But I asked everybody said, Have you ever gone into a pharmacy and actually looked at what they're trying to pull for these answers? No one knew. And no one had ever walked into a pharmacy yet they were demanding these items. So I we finally got him implemented. So it's good to get that information and keep that maintain there. The PBM now are almost always getting their data from NCPDP. So just keep that up and don't ignore those emails from them. The other thing is, is that with the station stations, you're still going to be given an to follow you have to attest that you got to fraud, waste and abuse and your HIPAA. Okay, training all that, which is rare. That's all they're focused on, because that's part D requirement. But they use that to get into a lot of different items. But fill out those attestations make sure they're correct, and send them in. And it only takes a couple seconds, our program tells you exactly what to do. When you get them you just fill it out and send it back in. Sometimes they're on online, but you just work it through, you can't ignore these items. However, we're getting a couple of different types of asset stations right now. And honest. One is on COVID-19 vaccines. Each State Department of Health is now starting to go back and audit the dispensing of all your vaccines over the last couple of years. That can be very daunting depending on how many you doing. And most of the independents did a whole bunch. So you have to have an accounting for it. So if you have a program that showed you how to do the document, it gave you the documentation you need The proper standing order all the different things you need to dispense. It's not a problem, but they're coming in to the pharmacy, they're looking at the paperwork and looking at it. Fortunately, our clients have done very well with these. But there were stories out there to people just dispense with no documentation, no standing orders, no nothing. And now, instead of having a pharmacy audit, now you have a Department of Health audit will which they will affect your state license. So that's one item we have to be aware of. So don't be surprised if you get a call.
Lisa Faast:
Yeah, and I will No, I will note really quick that a habit as many pharmacy owners is not checking their emails very often, you know, yeah, I get responses to emails that I maybe send somebody you know, weeks later, I will say that these audits that I've seen, have come via email. And it's kind of a weird way for like an audit to come through. There's usually something that maybe comes in the mail later, but the very first notification of the first few pharmacy owners for the COVID vaccine actually became a notice from an email. So if you're not keeping up on your email, you know, have somebody else do it, make it somebody else's tax, get a VA, you know, whatever it is, but don't let your email sit idle for weeks, because there might be something in there that that can give you a heads up on what's coming.
Jeff Hedges:
Also, on your NCPDP make sure those emails are update, because the email you have listed, that person leaves, while they're sending the email to that person, whether it's a work email, which everybody should have, or their personal Gmail, well, if it goes to their personal Gmail, you're screwed. Because you don't know they're gone.
Lisa Faast:
I still get the notifications for a pharmacy, I no longer own. And I have told the owner, like change the email, you know, all the notifications to go to the new person in charge, and I still get the NCPDP. So I still forward because I'm a nice person, I don't want this pharmacy to get in trouble. Like, you need to do this, you need to do this. And the new owners like what does this mean? I'm like, Dude, you gotta go figure, you know, you got to go through this. So I've definitely experienced that from the other side of the person who is no longer with the pharmacy, and I still get the NCPDP emails, letting them know that it's time to fulfill their attestation. You know, whatever the case may be. So that is definitely on point there, make sure that those files are updated, and the email and the contact. And to the point, I think every employee should be given a pharmacy email and business email, that is the only email that they should use when doing official business stuff. Because employees do leave, they come and go. And if you control that email, you're you're not losing communication, whether it's communication from a patient or vendor or a regulatory agency. So just a side note, I think that's the best business practice to give all your employees a business email, even if it is a business, Gmail, you know, whatever, like, you know, whatever the case may be, but it's a very specific email that's only used for, you know, official business purposes. So that's a good point there. All right. Anything else on SS stations before we head over to CMS?
Jeff Hedges:
Yeah, so yes, one more it just started this week, Express Scripts started sending out a demand letter, that they want all the invoices for 18 months of all your orders from your wholesaler. And they have a specific format, they want it in an Excel spreadsheet. And basically, it's everything and the C DME and Klaich er quantity, they want everything. And you have to provide it so or they'll pull your contract. The problem is, not every wholesaler has that data available. So you're gonna have to be careful when you get this. So they're, they're definitely ramping up to take care of this is this starting? But I mean, we're talking to Excel spreadsheets, you start thinking about how much how many bottles that you've gotten over an 18 month period. You're definitely looking at 20 or 30,000 lines. So the next thing is how in the heck are they even going to audit that? But they're going to use that later on for something else that's coming down the line because they are they are definitely sneaky.
Lisa Faast:
Yeah, they are. They're the ninjas. That is that is for sure. They're Sneaky, sneaky. So tell us what's happening with CMS and on site audits from CMS for pharmacies.
Jeff Hedges:
Okay, first item is that during COVID CMS stopped all revalidation. So that stopped in April of 2020. And they're just coming back this year. Bring it back online. So the issue is, these things run on a three year cycle. So basically what has occurred is now everybody has to revalidate. Okay, so if you there's a website you go out on, on mp east or MP West, and you can find out if you do, we're doing that with, we've done that with our clients, and we saw that they were doing up for revalidation, we didn't wait till the pandemic was over, which is actually today, officially.
Lisa Faast:
so yes today.
Jeff Hedges:
So it's, so you can do them early if you know about it. But if you're not checking, everybody's everybody's getting a revalidation. Notice now. With that, you got to do your 855 s a55. B. revalidation, the fees have gone up. It was free last year the year before, but now the fees are back. So you got to do the revalidation. When you get these and you send in your application, you must be ready. Because as a CMS contractor who's going to do the on site inspection can be there literally, within seven days, we've had that happen a number of times, so you get the survey, or the especially send it or the application and what the money, we recommend everybody to be enrolled in PECOS. It's not mandatory for pharmacy, we have 100% of all our clients and Pecos. Because it's also very important that that data is kept right there. Also, if you're using another company, the manager, a 55, SS. And these, make sure that the contact person, if they forever for our clients, it's me. But the email or the address for mailing has to go to your facility. So there's couple of organizations out there, the all the mail goes to the biller or whoever's doing this, and they don't always tell you. So you can be dispensing not even realize your claims are being rejected because they're doing the audits or the claims. So that's another problem with that. But anyways, the audits are fairly simple. They're coming in, they're gonna take a picture outside picture at the door, a picture of your diabetic are any type of DME side requirements. Again, this is part B. So they're only looking to DME, they may look at some of the Part B drugs, it's the same inspection, but they need to see it. And then one of the other things that everybody gets stuck on, they want to see operating instructions for that piece of device. Well, it's inside the container, you open it up, you give it to him, if it's a cane, there's a little e tag on it, because you don't need much instructions to use a cane. And so that's what they're looking for. And then they look for some documentation. Even if you're only doing part B meds, you got to have all the DME type of documentation, they're not a big problem. But normally, if you have everything ready inspection lasts five to 10 minutes, because our clients when the inspector comes in, they have the paperwork already with our checklists and to handle. So they take three pictures out the door, they go, everybody's happy and your numbers awarded. So go with that.
Lisa Faast:
Yeah, and then the other on sites that are really coming back with a vengeance. It varies a little bit by state by state, but is those on site state board inspections and audits. A lot of those quit during COVID, very similar to CMS. And it's like they're making up for lost time. They're coming back on and they are looking for very specific things. They seem to be kind of on a mission when it comes to certain things. So what are you seeing in state board inspections that pharmacies should be aware of?
Jeff Hedges:
Okay, it's what's coming. Okay, so, hazardous drugs. It actually went into effect two days after the pandemic started started. But a lot of state boards didn't enforce it. However, there were some that have started now going through it effective November 1 2023. The enforcement starts. That's not the rule starts, enforcement starts. So the state boards have been tasked for this. So when they come in, into your pharmacy, there are specific things that they want to say they want to if we're talking retail and longterm care. They want to see the assessment arrest. They want to see separate county tools they want to see How you're storing your hazardous drugs, it's not very often it's not necessary to have them segregated. However, we strongly recommend that because what happens is the if you have it on the shelf, and you have accounting tools with all the segregated gated items, your tech is automatically going to pull the the tray and the county dispatch with the drug comes over the Protect fills, it sends it down the counter. After they're done with it, they clean the tray and spatula, because that's a requirement and then you put it back up on the shelf. So it's a good repetitive process. So you're never going to be out of compliance because they're going to observe, the state boards that we've seen prior to pandemic are going to completely change because of all the authority that's coming down. Also non sterile compounding USP 795, and then sterile compounding 797 also will begin on November 1 With the new USP standards again and enforcement starts, the rules have been out. So you should be looking at it if you need help. There are people out there call us we have a full set of processes to get ready. The biggest thing is hazardous drugs must be stored at a retail pharmacy inside a negative pressure room.
Lisa Faast:
When you're compounding when you're compounding.
Jeff Hedges:
I got ahead of myself, I'm sorry, I know a lot of rules going on right now. So they need to be segregated. If they're hazardous drug and it's compounding even if they're in a capsule or tablet, you have to put it in the negative pressure. So they're looking for all these items. What's also different. The state boards have received training from the FDA, what they should be looking at for hazardous drugs. They've also received it from HHS. So they're being trained now from a national point of view, not from the local. So with that, then we have on the 23rd 27th of November, now we got track and trace, everybody's referring to it as the dscsa. That's track and trace, the big thing that you need to understand is that when you get a drug from your wholesaler, it has to be a legitimate drug, it's going to have a little QR code on that QR code is not on everything right now. And they're not even expecting that to happen when this rule goes into a fact. So if that if you can't accept that you're in violation, if the drug bottle and everything serial number down to the individual bottle, if you can't accept that bottle or you it's not there, you have to send it back to the wholesaler, you do not want anything in your system that is not under these new standards. And that's going to be one of the big fallacies. When we come into November. Everybody knows there's gonna be problems, the FDA is hell bent on this. They're going forward whether you want it or not. So you just gonna have to work through it. Some, again, some of the bigger software companies are working to have this internal within their systems. So specifically pioneer and liberty. I've looked at their systems, I've looked at everything, if you're using those systems, work through your saw software company, and they will tell you how it's going to work. It's not ready yet, but they are working on it. I've seen it. So if you don't have a software systems is working on my recommendations, there's company called RX scan, they're based out of Ohio. They have a system that works with an either with your pharmacy software, it can tie into your pharmacy software, but it does everything. And again, the final step is that you must physically and electronically accept that bottle into your pharmacy. So that's no one's talking about that, I guess.
Lisa Faast:
Yeah, and we're gonna do an episode completely on dscsa are track and trace, drug supply chain security act, I think somewhere around there as the acronym and to kind of really dive into that to let pharmacy owners what they need to do. One question I do want to address on this episode, and I know we're getting a little lengthy here for our typical episodes, but this is just so critical for pharmacy owners. Real quick question is, how do I handle inventory that I might receive today after November? First, like, do I have to like burn that inventory? And get rid of that? Or is it just a requirement for products received after November 1?
Jeff Hedges:
That's a good question. There's a weekly meeting. And that question keeps coming up. That's hosted by the FDA. We can there's wholesalers, they know that there are I'm sorry, not wholesaler manufacturers, who will not have their system set up by November. So what do we do? How do we handle well, after November, when the rule goes into a forcement, you have to return that back to the wholesome. Wholesalers should be getting rid of them anyway. So because they have their responsibilities in the chain, but to stuff that you have on stock, you have to be careful, listen carefully, we'll get information out as soon as these questions are answered. The weekly calls that get into so much depth that most people will get lost, because as soon as they get past the first sentence, you're confused. But the q&a Afterwards, that is the most important thing. The question comes as do you have to do this one? Do you have to track that medication that you're giving to that individual patient? early on? The answer was yes. now appears that the answer is no. Once you accept it in your system, that's when track and trace stops. So but these things change, so we got a lot of time.
Lisa Faast:
There's a lot of time for them to change their mind, unfortunately. Yeah.
Jeff Hedges:
Yeah, listen to our newsletters or read them, listen to Lisa's, show, get this type of information out. One thing is for sure. None of it is working now as far as accepting. So don't get panic stricken about that. We still got six, six months to go. So why things will happen between now and that?
Lisa Faast:
Yep. Awesome. Well, thank you for going through for that. That. I mean, November is going to be a big, big month for pharmacies, we've got enforcement of two things happening on November one, we got dscsa happening at the end of November, state boards, CMS coming into your pharmacy, there's just a lot going on. And so if you feel overwhelmed after listening to this, don't fret, you know, there are people out there that help you, I highly recommend if you haven't taken a look at RJ hedges software, you look at it because it doesn't make it easy, it makes it easy to not only know what you have to do, but it to me again, that magic is it makes it easy when you do have that inspector standing in front of you. And your adrenaline goes through the roof. And you freeze because we're human. And that's what we do. Whether it's you or your technician, we're just going to freeze. It's an easy system that can show how you're compliant. And you know, if you've been there, you know what that feels like. So thank you so much for spending time with us and going through those. It's not the most happiest episode, but gosh, is it critical? Because you do not want to be on the wrong side of these inspections. So thank you so much, Jeff, I look forward to our further compliance episodes. And if you missed any of our our previous ones, go back and listen to them. We're you know, I don't know the total number we're gonna have on this but probably seven or eight or so because there's just a lot of things happening in pharmacy. So really quick as we wrap this up, how can somebody get a hold of you and your company? Jeff, if they want to find out more about how to be compliance?
Jeff Hedges:
Okay, you can go to our website www.rjhedges.com. And there's videos and explanations for every item. Or you can email us at sales@rjhedges.com. Or worst case, you can call us at 724-357-8380.
Lisa Faast:
Awesome. Well, we'll put that over in the show notes. So you have that if you're driving and listening to this. I know a lot of our listeners, that's what they do. We'll have it for you. Easy access when whenever you're not. So thank you so much, Jeff. I greatly appreciate it and I look forward to our next one.
Jeff Hedges:
Okay, thank you very much and have a great day guys.
