|
|
|
|
|
EXHIBIT A TO THE AGREEMENT
BETWEEN THE COUNTY OF SAN MATEO AND TED’S VILLAGE PHARMACY
(RELATING TO THE DALY CITY CLINICS)
|
|
|
RECITALS
|
|
|
A.
|
The 1992 Veteran’s Health Care Act created Section 340B of the Public Health Services Act, which classifies certain health care clinics, including County of San Mateo San Mateo Medical Center Clinics (“CLINIC”), as “Covered Entities” eligible to purchase outpatient prescription drugs for their patients at favorable discounts from drug manufacturers who enter into drug purchasing agreements with the United States Department of Health and Human Services (“DHHS”).
|
|
|
B.
|
California Business & Professions Code §4126, effective January 1, 2002, authorizes Covered Entities, including CLINIC, to contract with pharmacies licensed under California state law, such as CONTRACTOR, to dispense Covered 340B Drugs for the Covered Entity, provided certain requirements are met, including adequate inventory control and limitation of dispensing to eligible outpatients of the Covered Entity.
|
|
|
C.
|
The County of San Mateo, Clinics (CLINIC) and CONTRACTOR mutually desire to enter into a “ship to/bill to” arrangement under which CONTRACTOR will order Covered 340B Drugs and receive shipment, maintain inventory and controls, dispense such drugs on behalf of CLINIC only to eligible CLINIC outpatients, and charge and collect for such drugs, all on CLINIC’s behalf, and CLINIC will be billed and will pay for such drugs, in compliance with applicable laws and regulations.
|
|
|
D.
|
CLINIC and CONTRACTOR mutually acknowledge that their intent in entering into this Agreement is solely to facilitate CLINIC’s participation in the 340B drug purchasing program, without having to establish and operate its own pharmacy and to increase patient access. The services provided each to the other are only those necessary in order to fulfill this intent, and all financial arrangements established herein are mutually determined to represent either cost or fair market value for the items and services received. The parties expressly do not intend to take any action that would violate state or federal anti-kickback prohibitions, such as those appearing in Section 1128B of the Social Security Act, 42 USC Section 1320a-7b. Instead, it is the intention of the parties that this Agreement and all actions taken in connection herewith shall fully comply with the regulatory
|
|
|
requirements of the safe harbor for personal services and management contracts appearing in 42 CFR Section 1001.952(d), and this Agreement shall in all respects be construed consistent therewith.
|
|
|
DEFINITIONS
|
A.
|
“340B Drugs” are hereby defined in accordance with applicable laws and guidance at 42 U.S.C. § 256b(b), 42 U.S.C. § 1396r-8(k), and 59 Fed. Reg. 25,110 (May 13, 1994).
|
B.
|
“Tracking System” is hereby defined as a system for identifying and monitoring the use of drugs through all phases of the Parties’ involvement with such drugs, including the ordering of 340B drugs, the receipt of 340B drugs, Covered Entity’s payment for 340B drugs, internal transfers of 340B drugs within the Contractor, Contractor’s preparation and dispensing of 340B drugs, and Contractor’s billing of the Covered Entity Patient or third-party insurer for the 340B drugs on behalf of Covered Entity.
|
C.
|
“Contractor” or “Pharmacy” shall mean “Contractor,” as defined by the attached Agreement.
|
D.
|
“Covered Entity” or “Clinic” shall mean the County, as defined by the attached Agreement, including all of its 340B-eligible clinical site locations.
|
|
|
NOW, THEREFORE, in consideration of the promises, covenants and agreements
hereinafter set forth, CLINIC and CONTRACTOR hereby agree to the following terms and conditions:
|
|
|
1.
|
Covered 340B Drugs. The prescription outpatient drugs covered by this Agreement (hereinafter "Covered 340B Drugs") include “Legend” drugs, that is those drugs which by federal law can be dispensed only pursuant to a prescription and which are required to bear the legend “Caution – Federal Law prohibits dispensing without prescription.” Other qualified prescriptions include insulin (on prescription only) and over the counter medications as long as prescribed by an authorized medical provider. All Covered 340B Drugs purchased under this Agreement are the property of CLINIC. All Covered 340B Drugs subject to this Agreement are also subject to the Limiting Definition of “covered outpatient drug” set forth in Section 1927(k) of the Social Security Act, 42 USC 1396r-8(k) (2) & (3), which is incorporated as the applicable definition for the section of the 1992 Veterans Affairs Act that created Section 340B of the Public Health Services Act.
|
|
|
2.
|
Eligible Patients. Only outpatients of CLINIC, excluding CLINIC’s patients who are MediCal beneficiaries and for whom claims for pharmaceuticals will be submitted to the state MediCal program, are eligible to purchase or receive Covered 340B Drugs from CONTRACTOR (“Eligible Patients”). Under no circumstances will CONTRACTOR dispense Covered 340B Drugs to anyone other than Eligible Patients of CLINIC. Contractor shall dispense Covered 340B Drugs to Eligible Patients only in the following circumstances:
|
|
|
|
|
2.1
|
Upon presentation of a prescription form bearing CLINIC's name, the
Eligible Patient's name, a designation that the patient is an Eligible Patient, and the signature of a legally qualified health care provider affiliated with CLINIC; or,
|
|
|
|
|
2.2
|
Upon receipt of a prescription ordered by telephone or electronically on behalf of an Eligible Patient by a legally qualified health care provider affiliated with CLINIC who states that the prescription is for an Eligible Patient. CLINIC will furnish a list to Contractor of all such qualified health care providers and will update the list of providers to reflect any changes. PROVIDED, however, that no electronic transmission of patient specific information hereunder shall occur on or after the compliance date for healthcare providers of final HIPAA regulations, currently scheduled for October 16, 2003, unless and until the Parties have provided for strict compliance with applicable Health Insurance Portability and Accountability Act (HIPAA) rules, as described in paragraph 21 hereof.
|
|
|
3.
|
Purchasing, Restocking and Inventory Maintenance.
|
|
|
|
|
3.1
|
Purchasing. Covered Entity shall purchase and maintain title to the 340B Drugs and shall assume all responsibility for establishing the price of the 340B Drugs subject to applicable Federal and State laws. Pharmacy is responsible for the receipt of 340B Drugs purchased by Covered Entity. Upon receipt of 340B Drugs, Pharmacy shall compare all shipments received on behalf of Covered Entity and confirm that the shipments conform to the orders of 340B Drugs placed by Covered Entity. If Pharmacy should find a discrepancy between the shipment and order of 340B covered outpatient drugs, Pharmacy shall inform Covered Entity within five (5) business days of this discrepancy.
|
|
|
3.2
|
Restocking. CONTRACTOR agrees to place orders as necessary with one or more pharmaceutical suppliers (“SUPPLIER”) to maintain and replenish the drugs consumed pursuant to this Agreement. CLINIC and CONTRACTOR shall arrange with SUPPLIER to ship directly to CONTRACTOR. CONTRACTOR shall provide CLINIC a copy of each and every order so placed, as well as shipping orders and invoices showing prices.
|
|
|
|
|
3.3
|
Inventory. Contractor shall conduct a complete and accurate inventory of all Covered 340B Drugs on the last business day OR the 30th of June of each year and provide an electronic file in Excel compatible format within 5 days of conducting the inventory.
Contractor shall maintain an inventory of expired or otherwise unusable Covered 340B Drugs and provide that inventory in electronic file in Excel compatible format within 5 days of conducting the annual inventory. Expired or otherwise unusable Covered 340B Drugs shall be disposed of in compliance with state, local or federal regulations.
|
|
|
|
|
3.4
|
Inventory Maintenance. CONTRACTOR agrees to maintain a stock of Covered 340B Drugs physically separate from its other drug inventory, and to protect its inventory of Covered 340B Drugs against intentional or unintentional dispensing to anyone other than Eligible Patients, and to reduce the possibility of this or other occurrences of drug diversion. CONTRACTOR shall maintain such records as are adequate to permit it to prepare the reports required under paragraph 7 hereof, and to permit CLINIC, DHHS, or any eligible drug manufacturer to determine upon audit to whom such Covered 340B Drugs have been dispensed. Upon termination of this Agreement, CONTRACTOR shall deliver all unused items of inventory purchased by or on behalf of CLINIC hereunder to CLINIC, if CLINIC has a valid permit, or, in the absence of such a permit, return them to SUPPLIER for CLINIC’s credit, if possible, or destroy them, if they cannot be returned or transferred within thirty days following termination.
|
|
|
4.
|
Third party insurers. On behalf of Covered Entity, Pharmacy shall be responsible for billing third-party insurers for all 340B Drugs purchased by Covered Entity for Covered Entity Patients, and for billing Covered Entity Patients for insurance co-payments, where applicable.
|
5.
|
Payment to SUPPLIER by CLINIC. CLINIC agrees to timely pay SUPPLIER amounts owing to SUPPLIER for Covered 340B Drugs purchased hereunder. In the event that SUPPLIER is not paid and does not ship Covered 340B Drugs in sufficient quantity to CONTRACTOR, CONTRACTOR shall notify CLINIC in writing of its lack of 340B Drugs, and, if CLINIC continues to write prescriptions for CONTRACTOR to fill, may thereafter, in its sole discretion, fill prescriptions from its non-340B inventory, and charge for its own account Eligible Patients or CLINIC according to its own, non-340B prices as described in paragraph 6.2, or CONTRACTOR may refuse to fill prescriptions of CLINIC, until satisfactory arrangement is made by CLINIC.
|
|
|
6.
|
Payments to CONTRACTOR by CLINIC.
|
|
|
|
|
6.1
|
CONTRACTOR Dispensing Fee. CONTRACTOR and CLINIC agree that CONTRACTOR shall receive a Dispensing Fee as specified in Exhibit B, for each prescription of Covered 340B Drugs filled for Eligible Patients and that such Dispensing Fee covers CONTRACTOR’s costs and, in addition to delivery fees, constitutes the sole and exclusive payment CONTRACTOR is entitled to receive hereunder. With respect to each prescription, CLINIC shall designate whether such Dispensing Fee is to be collected from the Eligible Patient, from CLINIC, or in part from the Eligible Patient and in part from the CLINIC. If CLINIC is to pay all or part of the Dispensing Fee, CONTRACTOR shall bill CLINIC not more frequently than monthly for the amounts owing. CLINIC agrees to make payment within thirty to sixty (30 - 60) days of receipt of CONTRACTOR’s invoice for such Dispensing Fees. In the event that payment is late, CLINIC agrees to pay interest at the rate of seven percent (7%) per annum on the late balance.
|
|
|
|
|
6.2
|
CONTRACTOR Use of Non-340 B Stock. If CONTRACTOR fills prescriptions out of its non-340B stock after notifying CLINIC of a lack of 340B Drugs due to CLINIC nonpayment to SUPPLIER pursuant to paragraph 4, CLINIC agrees to make payment within fifteen (15) days of receipt of CONTRACTOR’s invoice for such costs. In the event that payment is late, CLINIC agrees to pay interest at the rate of seven percent (7%) per annum on the late balance.
|
|
|
|
|
6.3
|
In the event that the amount owed under paragraphs 6.1 or 6.2 by CLINIC to CONTRACTOR exceeds One Thousand Dollars ($1,000), CONTRACTOR shall have the right to refuse to fill further prescriptions of CLINIC, unless satisfactory arrangement is made by CLINIC.
|
|
|
|
|
6.4
|
Delivery Fee. CONTRACTOR shall maintain records of deliveries of prescriptions to patients and determine the cost of delivery. CONTRACTOR and CLINIC agree that CONTRACTOR shall receive an amount from CLINIC equivalent to one-half the actual cost of deliveries, and that CONTRACTOR will invoice CLINIC not more frequently than monthly for the amount owing.
|
|
|
7.
|
Payment to CONTRACTOR by Patient. CLINIC may assign a share of the cost of the drug by the patient for patient’s in CLINIC’s ACE Program. In the event the patient is to share in the cost of the drug, CONTRACTOR shall collect payment from the patient prior to dispensing the drug. CONTRACTOR shall maintain records of all patient payments and submit such records monthly to CLINIC, including the name and patient number of patients who do not pay the co-payment. CONTRACTOR shall deduct payments from what CLINIC would otherwise owe CONTRACTOR under paragraphs 5 and 6.
|
|
|
8.
|
Reports. By the tenth (10th) day of each month, CONTRACTOR shall transmit to CLINIC a detailed report, in Excel compatible format showing each Eligible Patient served, the prescription filled, with specific details about each claim, including the drug name, strength, unit dose, appropriate identification codes, manufacturer, quantity dispensed, amount charged and collected, for the previous month (example attached).
|
|
|
9.
|
Maintenance of Records. CONTRACTOR will preserve all records of shipment, receipts, and dispensing of 340B drugs for audit at any reasonable time for a period of three years following date of provision of services. It is understood by both parties under this Agreement that, under Section 340B(a)(5)(C) of the PHS Act, they are subject to audit by the drug manufacturers and the U.S. Public Health Service of DHHS of records that directly pertain to compliance with the Act.
|
|
|
10.
|
Contractor Compliance Responsibility. CONTRACTOR shall be solely responsible for all professional advice and services rendered by it for the Eligible Patients. CONTRACTOR is responsible for and agrees to render services as herein provided in accordance with the rules and regulations of the California State Board of Pharmacy, all laws of the State of California, and all applicable laws and regulations resulting from the Veteran's Health Care Act of 1992 (P.L. 102-585, sec 602). It is expressly understood that relations between the Eligible Patients and CONTRACTOR shall be subject to the rules, limitations, and privileges incident to the Contractor-patient relationship. CONTRACTOR shall be solely responsible, without interference from the CLINIC or its agents to said Eligible Patient for pharmaceutical advice and service, including the right to refuse to serve any individual where such service would violate pharmacy ethics or any pharmacy laws or regulations.
|
|
|
11.
|
Insurance. Contractor shall at its own expense maintain a policy of insurance
covering professional acts and omissions with a licensed insurance carrier to be in an amount not less than one million dollars ($1,000,000) per incident and three million dollars ($3,000,000) in the aggregate, and said policy shall be maintained during the term of this agreement. CONTRACTOR shall cause its insurer to name CLINIC as an additional named insured on such policy, and shall provide CLINIC with a certificate to such effect.
|
|
|
12.
|
Indemnification.
|
|
|
|
|
12.1
|
CLINIC shall indemnify, defend and hold harmless CONTRACTOR from any and all liability, loss, claim, lawsuit, injury, cost, damage or expense whatsoever (including reasonable attorneys fees and court costs) arising out of, incident to or in any manner occasioned by the performance or nonperformance of any duty or responsibility under this Agreement, by CLINIC or any of its employees, agents, contractors or subcontractors.
|
|
|
|
|
12.2
|
CONTRACTOR shall indemnify, defend and hold harmless CLINIC from any and all liability, loss, claim, lawsuit, injury, cost, damage or expense whatsoever (including reasonable attorneys fees and court costs) arising out of, incident to or in any manner occasioned by the performance or nonperformance of any duty or responsibility under this Agreement, by CONTRACTOR or any of its employees, agents, contractors or subcontractors.
|
|
|
|
|
12.3
|
Without limiting any other indemnification provisions set forth in this
Agreement, neither party shall be liable to the other party pursuant to this Section for any claim covered by insurance, except to the extent that the liability of such party exceeds the amount of such insurance coverage.
|
|
|
13.
|
Medicaid Prescriptions. Notwithstanding anything herein to the contrary, CONTRACTOR will not use Covered 340B Drugs to dispense prescriptions paid for by the state MediCal agency, but will use its non-340B inventory, and bill and collect MediCal on its own account. When a Medicaid agency pays for drugs for its beneficiaries, it is generally entitled to claim a rebate from the drug manufacturer, to reduce its effective cost to a statutorily established price. Section 340B extends a similar price to Covered Entities, and requires that there be a mechanism to protect drug manufacturers from Medicaid rebate claims for Covered 340B Drugs purchased pursuant to Section 340B. To avoid any chance that a State Medicaid agency will pay for 340B Drugs purchased hereunder and then submit prohibited rebate claims to the drug manufacturers, CONTRACTOR agrees to dispense non-340B drugs from its own inventory in filling Medicaid prescriptions for CLINIC patients who are Medicaid beneficiaries, and all charges collected in connection therewith shall be for CONTRACTOR’s account. CONTRACTOR further agrees that, for CLINIC patients who are Medicaid beneficiaries, CONTRACTOR will take all reasonable steps necessary to obtain coverage from Medicaid for the costs associated with drugs prescribed for those patients, including activities necessary for requesting a Treatment Authorization Request from MediCal. CLINIC shall not be liable to CONTRACTOR for dispensing fees or other costs in connection with prescriptions filled for Medicaid beneficiaries receiving a prescription whose cost will be covered by MediCal.
|
|
|
14.
|
Patient Choice. CONTRACTOR understands and agrees that Eligible Patients of CLINIC may elect not to use CONTRACTOR for pharmacy services. In the event that an Eligible Patient elects not to use CONTRACTOR for such services, the patient may obtain the prescription from the pharmacy provider of his or her choice. Subject to a patient's freedom to choose a provider of pharmacy services, CLINIC will inform Eligible Patients that they may be eligible for a discount on prescription drugs ordered by CLINIC, other than Medicaid prescriptions, and advise them that such discount has been arranged for only at CONTRACTOR.
|
|
|
15.
|
Contractor Site. Contractor agrees it will provide pharmacy services contracted for under this Agreement at one site only, which is as follows:
Ted’s Village Pharmacy
29 W. 25th Ave
San Mateo, CA 94403
Facsimile: 650/349-1745
|
|
|
16.
|
Inspection by Manufacturer. Upon request, Covered Entity and Contractor shall disclose or permit inspection of any records or information relating to the Agreement, when necessary to comply with audits or investigations conducted by the manufacturer, Federal or State governments.
Upon request, Contractor shall provide reasonable access by a drug manufacturer that sells 340B Drugs to Covered Entity to relevant records and materials for purposes of any audits conducted by the drug manufacturer relating to 340B Drugs in accordance with manufacturer audit guidelines as set forth at 61 Fed. Reg. 65406-65413 (December 12, 1996).
Covered Entity and Contractor will identify the necessary information for the Covered Entity to meet its ongoing obligations of ensuring that the requirements listed herein are being complied with and establish mechanisms to ensure availability of that information for periodic independent audits performed by the Covered Entity. Information regarding the functioning of the independent audits and any information to be made available to the independent auditor are described in Exhibit C.
Upon written request to the Covered Entity, a copy of this Agreement will be provided to the Office of Pharmacy Affairs.
|
|
|
17.
|
Self Reporting Requirements. In the event that Covered Entity determines that 340B drug diversion or duplicate discounts have occurred or that it is otherwise unable to comply with its responsibility to ensure reasonable compliance, then it must take immediate remedial action to assure compliance and notify HRSA’s Office of Pharmacy Affairs (OPA) regarding such compliance problems and actions taken to remedy those problems.
|
18.
|
Non-Assignment. This Agreement may not be assigned by either party without the prior written agreement of the other party.
|
|
|
19.
|
Term and Termination. This Agreement shall commence on May 1, 2010 and shall continue through April 30, 2013 or until terminated by:
|
|
|
|
|
19.1
|
Mutual agreement of the parties;
|
|
|
|
|
19.2
|
Thirty (30) days days prior written notice by either party;
|
|
|
|
|
19.3
|
CLINIC, immediately and without prior notice, upon a material breach of this Agreement by CONTRACTOR. Without limiting CLINIC's right to assert any other act or failure to act as constituting a material breach by CONTRACTOR, CONTRACTOR's dispensing of a Covered Drug to an individual who is not an Eligible Patient or any other diversion of a Covered Drug shall be deemed to be a material breach. CLINIC's failure to take action with respect to CONTRACTOR's failure to comply with any term or provision of this Agreement shall not be deemed to be a waiver of CLINIC’s right to insist on future compliance with such term or provision.
|
|
|
|
|
19.4
|
CONTRACTOR, immediately and without prior notice, upon a material breach of this Agreement by CLINIC. Without limiting CONTRACTOR's right to assert any other act or failure to act as constituting a material breach by CLINIC, CLINIC’s prescribing of a Covered Drug to an individual who is not an Eligible Patient or any other diversion of a Covered Drug shall be deemed to be a material breach. CONTRACTOR’s failure to take action with respect to CLINIC's failure to comply with any term or provision of this Agreement shall not be deemed to be a waiver of CONTRACTOR’s right to insist on future compliance with such term or provision.
|
|
|
|
|
19.5
|
Either party, immediately upon written notice to the other, for material
breach of patient confidentiality requirements under HIPAA, as specified in paragraph 23.
|
|
|
20.
|
Choice of Law. This Agreement shall be interpreted according to the laws of the State of California.
|
|
|
21.
|
Dispute Resolution.
|
|
|
The parties shall each have the right to file with a court of competent
jurisdiction an application for temporary or preliminary injunctive relief, writ of attachment, writ of possession, temporary protective order, or appointment of a receiver if the arbitration award to which the applicant may be entitled may be rendered ineffectual in the absence of such relief or if there is no other adequate remedy. This application shall not waive a party's mediation and arbitration rights under this Agreement. This paragraph is subject to the venue provisions in the main Agreement to which this Exhibit is attached.
|
|
|
22.
|
Confidentiality of Records. The parties agree to protect the confidentiality of each other’s records and business information disclosed to it to the extent permitted by law and not to use such information other than as necessary and appropriate in connection with performance of this Agreement, except as otherwise required by law.
|
|
|
23.
|
Patient Privacy and HIPAA Compliance. The parties recognize that each may be a healthcare provider and a covered entity within the meaning of the federal Health Insurance Portability and Accountability Act (“HIPAA”), and therefore responsible for compliance with HIPAA standards for electronic transactions by not later than October 16, 2003, and for HIPAA privacy standards by not later than April 26, 2003 or April 26, 2004 (the earliest of whichever date applies to either of the parties). The Parties agree to protect and respect the rights of the patients of CLINIC and CONTRACTOR to privacy and confidentiality concerning their medical and pharmaceutical records, and to protect all individually identifiable health information as protected health information from misuse or disclosure, in compliance with all applicable state and federal law.
|
|
|
|
|
23.1
|
Without limiting the generality of the foregoing, the parties agree to use patient specific information only for permitted treatment, billing and related record-keeping purposes, and to protect patient-specific information from unnecessary disclosure to persons not employed or contracted for by the parties, and from their own employees and contractors unless they have a need to know and agree to maintain the confidentiality of patient specific information. In the event that any patient information created, maintained or transmitted in connection with this agreement is to be transmitted electronically, the Parties agree that they shall comply in all respects with the requirements of
|
|
|
|
HIPAA governing electronic transmission of individually identifiable patient information. See 42 CFR Section 160 et seq. Failure by either party to abide by these requirements shall be a basis for immediate termination of this agreement.
|
|
|
|
|
|