Alerts and Updates

Update on Medicaid Requirement for "Tamper-Resistant" Prescription Pads

September 13, 2007

Pharmacists and Physicians Beware: New Medicaid Statute Could Affect You

As we discussed in our Alert of July 31, 2007, pharmacists and physicians should take note that on October 1, 2007, the Centers for Medicare and Medicaid Services ("CMS") will deny federal participation in Medicaid for prescriptions written on traditional prescription pads. Effective October 1, an amendment to 42 U.S.C. § 1396(b)(i) will require that all written, non-electronic prescriptions be issued on "tamper-resistant" prescription pads. The amendment applies to prescriptions for covered outpatient drugs.

The purpose behind the requirement is to reduce Medicaid fraud and to make it harder for patients to illegally obtain controlled drugs.

CMS has now spoken on the issue through an August 17, 2007, release to State Medicaid Directors. In that letter CMS stated:

To be considered tamper resistant on October 1, 2007, a prescription pad must contain at least one of the following three characteristics:
  1. one or more industry-recognized features designed to prevent unauthorized copying of a completed or blank prescription form;
  2. one or more industry-recognized features designed to prevent the erasure or modification of information written on the prescription by the prescriber; and
  3. one or more industry-recognized features designed to prevent the use of counterfeit prescription forms.
No later than October 1, 2008, to be considered tamper resistant, a prescription pad must contain all of the previous three characteristics. Failure of a State to enforce the tamper-resistant pad requirement may result in the loss of Federal financial participation.
CMS also stated:
The tamper-resistant pad requirement . . . applies to all outpatient drugs, including over-the-counter drugs in States that reimburse for prescriptions for such items. . . . [Certain] exceptions . . . apply for drugs provided in nursing facilities, intermediate care facilities for the mentally retarded, and other specified institutional and clinical settings. . . .

* * *

The tamper-resistant pad requirement does not apply to refills of written prescriptions presented at a pharmacy before October 1, 2007. In addition, the payment limitation does not apply to e-prescriptions transmitted to the pharmacy, prescriptions faxed to the pharmacy, or prescriptions communicated to a pharmacy by telephone by a prescriber. . . . Please note, however, that Drug Enforcement Administration regulations regarding controlled substances may require a written prescription.

The requirement for the use of a tamper-resistant prescription pad does not apply when a managed care entity pays for the prescription.

Finally, CMS stated:

. . . Several States have laws and regulations concerning mandatory, tamper-resistant prescription pad programs, which were in effect prior to the passage of section 7002(b). CMS deems that the tamper-resistant prescription pad characteristics required by these States' laws and regulations meet or exceed the baseline standard, as set forth above.

The potential exists for a false claim accusation if a pharmacy seeks reimbursement for a Medicaid prescription that is not written on a tamper-resistant prescription pad. Additionally, physicians who do not comply may find their patients unable to fill prescriptions.

For Further Information

For more information about this Alert, please contact Frederick R. Ball, any of the other members of the Healthcare Fraud and Abuse Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.