Question

Does your office practice order prescription drugs for office administration?

The new permit

Effective January 1, 2009, many health care practitioners’ places of business including physicians’ offices, clinics, veterinarian offices, etc., became subject to a new Florida law requiring a health care clinic establishment (HCCE) permit to purchase prescription drugs for administration to patients in the office. This permit does not apply to physicians who dispense drugs to patients.

If your practice is organized as a professional association, (P.A.) or professional limited liability corporation (PLLC), you may want to consider obtaining a HCCE permit for your practice. Depending on your business model, the HCCE permit may actually be necessary for your practice to maintain compliance with the Florida laws and rules. However, it is also true that many practices may have already obtained this permit in error, thereby subjecting themselves to unnecessary regulation and surprise inspections.

Historical issues

Historically, physicians and other health care practitioners had their office manager, nurse or other office staff places the orders for the medical supplies, including the prescription drugs, without much thought except for perhaps the close eye that was kept on controlled substances or pain medications to assure they were secure in the office. Often times, the physician had no knowledge of where the prescription medications came from, how they got to the office or which physician or practitioner used which prescription drugs. Much of the paperwork generated and kept on file by the wholesaler and physician office was inadequate and many times the vendor of the prescription drugs was not properly licensed or did not pass the proper paperwork on to the physician offices.

These types of practices left physician practices wide open for regulatory scrutiny, and in recent years, State inspectors have begun to ask question of these practices like:

• Multiple physician/practitioner offices:
  • Which practitioner owns the prescription drugs in the medication room?
  • Are all the doctors using the same prescription drugs?
  • Are the dispensing practitioners using the same prescription drugs as the non-dispensing practitioners?
• Multiple practice sites for one physician:
  • Are the physicians/practitioners taking the prescription drugs with them from one practice site to another?
  • Does the practice order and pay for prescription drugs from their corporate location and have the drug delivered to one of the practice site locations?

Why more regulation?

Unfortunately, times are changing and there is a growing problem of drug diversion to the habitual user and for profit. In addition, physician practices are starting to notice that the costs of the prescription drugs are increasing substantially and that regulations are creating obstacles to getting drugs needed for their office practice.

In an effort to track the flow of prescription drugs to health care practitioners, the State of Florida has implemented a new law that would allow a business entity to register with the State as a Health Care Clinic Establishment (HCCE). This permit enables the practice to own and control the prescription drugs at each physician practice address. This new permit can be beneficial to the practitioner because it gives the office practice a clear audit trail and ability to keep and track their prescription drugs. The permit also gives the State better knowledge and control over the flow of prescriptions drugs.

When this law was first implemented, many practices were told incorrectly they had to have this permit to order prescription drugs. For some practices the permit would be beneficial. However, for most practices, the permit only serves as another tax while raising the risk of annual inspections by state regulators.

If your office practice has recently applied for, received or is considering a HCCE permit this may or may not be right for your practice. Either way, make sure your office ready to face a State Inspector.

© 2009 STRAWN & MONAGHAN, P.A. All rights reserved. Republication with attribution is permitted.