Bass, Berry & Sims PLC

Starting next summer, California licensed pharmacies offering automatic prescription refill programs will be subject to new constraints and limitations. California recently approved new Board of Pharmacy regulations, which go into effect as of July 1, 2022, and are in direct response to media coverage and patient complaints regarding the negative consequences of auto-refill programs throughout the state.

The California Board of Pharmacy (CA BOP) indicated that the new rules were a reaction to allegations of unauthorized or unsolicited enrollment in auto-refill programs, leading to the receipt of unwanted or unneeded medications and related challenges with returns and refunds. As such, the CA BOP set forth to establish parameters for pharmacies with auto-refill programs, aiming to prevent auto-refills of unwanted or unneeded prescriptions and better protect patients.

Requirements of California’s New Auto-Fill Program

According to the new regulations, California will allow pharmacies to automatically refill prescriptions for patients enrolled in the pharmacy’s automatic refill program only if certain requirements are met, including (but not limited to) the following:

  • Providing written or electronic notice summarizing the auto-refill program to the patient (or the patient’s agent) before a patient enrolls in the program for each
  • Obtaining annual renewal of a patient’s participation for each of the patient’s prescriptions.
  • Providing a written or electronic notification to the patient (or patient’s agent) confirming that the prescription is being refilled through the program each time a prescription is automatically refilled.
  • Allowing patients to withdraw a prescription from automatic refill or to dis-enroll entirely from the program at any time.
  • Refunding the patient or payor for any prescription refilled through the program if the pharmacy was notified that the patient did not want the refill, regardless of the reason, or the pharmacy had been notified of withdrawal or disenrollment from the program before dispensing.

There are limited exceptions to the CA BOP’s new regulations, such as for licensed health facilities (as defined under California law) and for pharmacies automatically refilling prescriptions for inmates of an adult correctional facility or a juvenile detention facility. Otherwise, CA BOP-licensed pharmacies may only offer auto-refill programs in California if they comply with the new regulations.

Considerations for Pharmacies

It is important to note that pharmacies offering auto-refill programs still need to consider other state and federal laws impacting licensure and reimbursement. Pharmacies operating or wishing to implement auto-refill programs (in California and beyond) should consider the following:

  • State Pharmacy Laws. A pharmacy with multi-state operations needs to account for the state laws in each state in which it is licensed – some states do not permit auto-refill programs. Failure to comply with the laws in each state can lead to a suspended or revoked pharmacy license.
  • Federal Payment Program Restrictions. Medicare Part D restricts the use of auto-refill programs. Since 2014, CMS has required that retail and mail-order pharmacies obtain patient consent to deliver a prescription, new or refill, before each delivery. Although this does not apply to long-term care pharmacy dispensing, the limitation effectively prohibits true “auto-refills” for Medicare Part D prescriptions. Many state Medicaid programs have similar prohibitions on automatic refills. Billing Medicare and/or Medicaid in violation of these restrictions on auto-refill programs can lead to allegations of violations of the federal False Claims Act and/or similar state laws.
  • Commercial Payor Restrictions. Finally, many commercial payors prohibit or limit the use of auto-refill programs. Pharmacies will need to consider each payor’s position on auto-refill programs to ensure compliance with contractual obligations and to avoid potential recoupment.
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