Pharmacy Compliance: How to Reduce Business Risk
Compliance is an important part of operating an independent pharmacy. Owners must manage regulatory requirements while also handling employees, patients, prescriptions, vendors, payers, and the day-to-day responsibilities of running a business. For owners considering pharmacy practice financing, maintaining strong compliance practices can also help support a more stable and organized operation.
Compliance is not simply about responding to an audit when one occurs. A proactive approach can help pharmacy owners identify potential problems, maintain better records, and reduce unnecessary operational risk.
Understand Your Compliance Responsibilities
Pharmacy owners should understand the federal, state, and other requirements that apply to their specific business.
Requirements can vary based on the pharmacy’s location, services, medications handled, ownership structure, employees, and other factors.
Owners should work with qualified professionals when necessary to determine which requirements apply to their particular pharmacy.
Keep Licenses and Credentials Current
Licenses, registrations, credentials, and other required documentation should be monitored regularly.
Pharmacy owners should maintain a system for tracking expiration dates and renewal requirements rather than waiting until a deadline is approaching.
A centralized compliance calendar can help identify upcoming requirements and assign responsibility for completing them.
Maintain Accurate Documentation
Good documentation is one of the foundations of an effective compliance program.
Depending on the pharmacy’s operations, records may relate to:
- Prescriptions
- Inventory
- Purchasing
- Employees
- Training
- Policies and procedures
- Claims
- Audits
- Licenses and registrations
- Other regulatory requirements
Records should be organized so that the pharmacy can locate appropriate information when it is needed.
Prepare for Audits
An audit can become significantly more difficult when documentation is incomplete or difficult to locate.
Rather than treating an audit as an unexpected event, pharmacy owners can establish procedures for maintaining records and responding to requests.
Owners should understand who is responsible for responding to different types of requests and when professional assistance may be appropriate.
Review Claims and Payments
Claims and reimbursement can create compliance and financial challenges for independent pharmacies.
Owners should establish procedures for reviewing claims, payments, adjustments, and other relevant information.
Regular reconciliation can help identify discrepancies and give owners a clearer understanding of whether payments match expectations.
Train Employees
Compliance is not solely the responsibility of the pharmacy owner.
Employees need to understand the policies and procedures that apply to their responsibilities.
Training may address areas such as:
- Patient privacy
- Documentation
- Prescription procedures
- Inventory procedures
- Security
- Workplace policies
- Compliance responsibilities
- How to report potential problems
Training should be provided during onboarding and updated when responsibilities, procedures, or requirements change.
Create Written Policies and Procedures
Written procedures can help employees understand how important tasks should be handled.
Policies may address areas such as prescription processing, inventory, documentation, employee responsibilities, security, and other operational activities.
The policies should reflect how the pharmacy actually operates and should be reviewed periodically.
Monitor Inventory Carefully
Inventory management can also have a compliance component.
Pharmacy owners should maintain appropriate records and procedures for receiving, storing, tracking, and managing medications and other inventory.
Employees should understand how inventory discrepancies should be identified, documented, and reported.
Protect Patient Information
Pharmacies handle sensitive patient information and should have appropriate procedures for protecting it.
Owners should review how information is collected, stored, accessed, transmitted, and disposed of.
Employees should also understand their responsibilities regarding patient privacy and information security.
Review Vendor and Payer Relationships
Independent pharmacies often work with wholesalers, technology providers, pharmacy services organizations, PBMs, insurers, and other businesses.
Owners should maintain organized records of important agreements and understand the obligations associated with those relationships.
When contracts change, the pharmacy should review the changes and determine whether its procedures need to be updated.
Stay Organized With Compliance Deadlines
Compliance becomes more difficult when deadlines are tracked informally.
A pharmacy can create a centralized calendar or tracking system for important dates.
Potential items to monitor include:
- License renewals
- Registrations
- Employee training
- Required documentation
- Policy reviews
- Contract deadlines
- Audit responses
- Other recurring requirements
Assigning responsibility for each item can also reduce the chance that something is overlooked.
Conduct Internal Reviews
Pharmacy owners should periodically review their own operations rather than waiting for an outside party to identify a problem.
An internal review can examine whether employees are following established procedures and whether documentation is complete.
The goal is to identify potential problems while they are still manageable.
Address Problems Quickly
When a compliance issue is identified, ignoring it can allow the problem to become more serious.
Owners should determine what happened, understand the potential implications, document the issue appropriately, and take reasonable corrective action.
Depending on the situation, professional legal, regulatory, or compliance guidance may be appropriate.
Consider Outside Expertise
Independent pharmacy owners are responsible for many different aspects of the business.
It may not be practical for one person to have specialized knowledge of every regulatory, legal, accounting, employment, and operational requirement.
Qualified outside professionals can help pharmacy owners evaluate specific areas of concern and develop appropriate processes.
The right resources will depend on the pharmacy’s circumstances.
Make Compliance Part of the Culture
Compliance works best when it becomes part of everyday operations rather than something employees think about only when an audit occurs.
Owners can encourage employees to ask questions, report concerns, follow established procedures, and communicate when something does not appear correct.
Creating an environment where employees take compliance seriously can help identify potential problems earlier.
Review Compliance When the Pharmacy Changes
Business changes can create new compliance considerations.
For example, adding a new service, changing ownership, expanding the pharmacy, introducing new technology, or significantly changing operations may require owners to review existing policies and procedures.
Compliance should therefore be considered whenever the pharmacy makes a significant business change.
Use Technology to Stay Organized
Technology can help pharmacies organize compliance-related information.
Depending on the pharmacy’s needs, software and digital systems may assist with documentation, employee training, inventory records, scheduling, reminders, and other administrative responsibilities.
Technology should support the pharmacy’s compliance process rather than replace appropriate professional judgment.
Consider Compliance When Planning Growth
Growth can introduce additional operational complexity.
A pharmacy expanding its services, adding employees, increasing its inventory, or opening another location should consider how those changes affect its compliance processes.
Building compliance into the growth plan can make it easier to maintain consistent procedures as the business becomes larger.
Keep Compliance Records Accessible
Important compliance records should be organized so authorized employees can locate them efficiently.
Owners should know where important documents are stored and who is responsible for maintaining them.
A consistent filing system can reduce the time spent searching for information when it is needed for an audit, renewal, review, or business decision.
Review the Program Regularly
A compliance program should evolve as the pharmacy changes.
Owners can periodically review their policies, training, documentation, licenses, contracts, and internal procedures to identify areas that need attention.
Regular reviews can also help ensure that written policies continue to reflect the pharmacy’s actual operations.
Final Thoughts
Pharmacy compliance is an ongoing responsibility for independent pharmacy owners. Maintaining accurate records, keeping licenses current, training employees, reviewing claims and inventory, protecting patient information, preparing for audits, and conducting regular internal reviews can all contribute to a stronger compliance program.
The goal is not simply to avoid penalties or pass an audit. A well-organized compliance process can help an independent pharmacy operate more consistently, identify problems earlier, and reduce unnecessary business risk.
Because pharmacy requirements can vary significantly by location and business model, owners should seek qualified professional guidance when they have questions about specific legal or regulatory obligations.
