Publications
APS Bulletin • Volume 18, Number 1, 2008
Pain and the Law
Ben A. Rich, PhD JD, Department Editor
Prescription Pad Requirements
Jane Martinsons, Staff Writer
Effective April 2008, new regulations will require all reimbursable prescriptions for Medicaid patients to be written on tamper-resistant prescription pads.
Claudia Simonson, senior policy analyst for Centers for Medicare & Medicaid Services (CMS), Division of Field Operation and Medicaid Integrity Group, recently provided an overview of the new requirements during a webinar sponsored by the National Council for Community Behavioral Healthcare, Rockville, MD.
The tamper-resistant prescription pad requirements were included in the Iraq Appropriations Act of 2007 [Section 7002(b)] and as a savings measure in the Social Security Act [Section 1903(i)(23)]. In September 2007, the original compliance date of October 1, 2007, was extended to April 1, 2008, to accommodate concerns about prescription pad availability. With the 6-month implementation delay, the White House Office of Management and Budget lowered its estimated cost savings from $150 million to $142 million over 5 years.
The statutory requirement mandates all prescriptions for covered outpatient drugs billed on or after April 1, 2008, be written on tamper-resistant paper. Covered outpatient drugs are paid separately by Medicaid and are prescribed in a written or nonelectronic format. “Tamper-resistant paper is not required for Medicaid payment for these drugs unless the drug is separately billed to Medicaid,” said Simonson. “This is a payment issue.”
According to Section 1903 of the Social Security Act, which targets payment to states, states cannot use federal Medicaid dollars to reimburse pharmacies for prescriptions that are not written on compliant paper. “The prescriber, or physician, is not required to comply with this law by using tamper-resistant paper,” Simonson said. “A pharmacist is not required to comply with this law and can fill any prescription presented to him or her. But states cannot pay the pharmacist for prescriptions that are written on noncompliant paper and, therefore, will have to recoup payments made to pharmacies for filled prescriptions written on noncompliant paper. Ultimately the pharmacy is left holding the bag for the doctor not using the correct paper.”
Exceptions
There are some exceptions:
- prescriptions that are phoned into a pharmacy or communicated verbally (except for Schedule II narcotics)
- prescriptions that are faxed (except for Schedule II narcotics)
- e-prescriptions (direct Internet communication between the prescriber’s office and the pharmacy)
- prescriptions, including refills, that are written or presented at a pharmacy before April 1, 2008
- drugs paid by managed-care entities and Medicare Part D
- emergency fills confirmed within 72 hours with a compliant paper prescription or a phone or fax confirmation. “This is not a 72-hour fill,” Simonson said. “This is a full prescription. The noncompliant subscription must be confirmed within 3 days with something that is compliant.”
Pad Requirements
A State Medicaid Director letter released August 17, 2007, cited requirements for the tamper-resistant pads. According to CMS, by April 1, 2008, pads must have at least one of the characteristics listed below to be compliant and reimbursable with federal Medicaid dollars. By October 1, 2008, all three characteristics must be present for a prescription to be reimbursable: one or more industry-recognized features designed to prevent unauthorized copying of a completed or blank prescription form one or more industry-recognized features designed to prevent the erasure or modification of information written on the prescription by the prescriber one or more industry-recognized features designed to prevent counterfeiting.
“Some states already have these requirements in place or an extensive list of specific requirements,” Simonson said during the webinar, adding that states can use guidelines included in the State Medicaid Director letter or specify their own required features such as green security paper, microprinting, void water marks, sequential numbering, or thermochromic ink. Because this law affects payment to states, the burden is on states to inform providers to ensure compliance.
“Most states have sent out an alert to providers or posted something on the state’s Medicaid or pharmacy Web site,” Simonson said. “Most of the notices accurately portray the law and the guidance, but not all of them. We are contacting those states that have mischaracterized the requirement.”
Currently, 10 states have tamper-resistant prescription pad laws or rules in place. Nine of these states have laws that satisfy the October 1, 2008, requirement for all three features: California, Florida, Indiana, Kentucky, Maine, New Jersey, New York, Texas, and Wyoming. Idaho meets the April 1, 2008, requirement for one feature.
“We don’t really know if there are going to be enough pads available,” Simonson said. “We think the market will adjust to the demand. Our research shows that some of the 10 states have identified many printers as having the requirements in place.”
Pricing for tamper-resistant paper varies, but the cost generally is slightly higher than for regular paper.
“If they [states] choose to make pads available at a discount or free to prescribers, as is the case in New York, CMS will cover 50% of the cost to the state as an administrative expense,” Simonson said. “CMS won’t reimburse doctors for this; the state would have to make the claim for reimbursement from the federal government.”
Case Study: Facility Shares Experience with New Prescription PadsGrant-Blackford Mental Health, Inc., in Marion, IN, one of 10 states in compliance with CMS prescription-pad regulations, will soon transition to e-prescribing. “We have a long history with state compliance, and we are one of the states with voluminous requirements on tamper-resistant prescription pads,” said Paul G. Kuczora, Grant-Blackford president and chief executive officer, during the December webinar on tamper-resistant prescription-pad requirements. Both Kuczora and Helen Johnson, head of purchasing at Grant-Blackford, participated in the webinar. BackgroundGrant-Blackford Mental Health has used secure prescription pads since November 1995, just before the Indiana Board of Pharmacy began requiring all state-licensed medical practitioners to use the pads to prescribe controlled substances. The rule, which went into effect in January 1996, mandates that
When Grant-Blackford began using security prescription pads they opted to use the pads for all prescriptions, not just those written for controlled substances. Their pads comply with either one or two CMS requirements that take effect in April, said Johnson, who adds compliance generally depends on whether one- or two-part security prescription forms are used. Grant-Blackford uses a two-part form, which includes the original prescription and a duplicate. The one-part form contains only the original prescription. Johnson said Grant-Blackford’s printer, which incorporates both the void and watermark features and can use both forms, “complies with CMS characteristics of unauthorized copying of a completed or blank prescription form. The one-part form complies with the CMS characteristic preventing the use of counterfeit prescription pads by using a warning band, [but] the two-part form currently does not have this warning band to prevent counterfeiting. Therefore, it is compliant with only one CMS requirement at this time.” CostsBefore the Indiana Board of Pharmacy ruling, Grant-Blackford purchased plain-paper, single-prescription pads with a duplicate for the client chart for approximately $2.80 per 50-prescription pad. After the rule, their first order for a one-part 50-prescription pad cost $3.05 per pad. “After that initial order, we found a printer that was able to provide a two-part security form. Surprisingly, we were able to obtain that for $2.40 per 50-[pre]script[ion] pad. So it was an even lower price than what we originally paid for the one-part form,” Johnson said. Since 2002, Grant-Blackford has paid $2.85 per 50-prescription pad and is anticipating a minimal increase in the cost of CMS-complaint pads. Johnson suggests providers who are researching printers request written confirmation regarding their compliance with all three CMS requirements. More information on Indiana-required security features can be found on the Indiana Board of Pharmacy’s Web site at www.in.gov/pla/bandc/isbp/pad.html. |
For additional guidance on federal requirements, click on CMS’s “Questions” link at www.cms.hhs.gov. If you have further questions about tamper-resistant prescription pads, contact Simonson at 312/353-2115 or e-mail claudia.simonson@cms.hhs.gov or Medicaid_Integrity_Program@cms .hhs.gov.