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Primary Care Providers Win Challenge of CMS Interpretation of Enhanced Payment Law

With the help and support of the Tennessee Medical Association, 21 Tennessee physicians of underserved communities joined together and retained Bass, Berry & Sims to file suit against the Centers for Medicare & Medicaid Services to stop improper collection efforts. Our team, led by David King, was successful in halting efforts to recoup TennCare payments that were used legitimately to expand services in communities that needed them. Read more

Tennessee Medical Association & Bass, Berry & Sims

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Healthcare Private Equity Compliance Checklist

The complex and ever-changing healthcare regulatory and enforcement environment, including increased focus on the role of private equity firms in their portfolio companies, make compliance a top priority for private equity firms investing in healthcare companies. The best way to limit your exposure as a private equity firm is to avoid a compliance misstep in the first place. Additionally, an effective and robust compliance program for your portfolio healthcare company makes it much more attractive to potential buyers and helps you avoid an unexpected and costly investigation or valuation hit down the road. Download the Healthcare Private Equity Compliance Checklist to assess whether your portfolio company's compliance program is up-to-date.

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Tennessee Rule Change: Prohibition on Prescription Transfer Incentives

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March 16, 2017

As of the end of last month, Tennessee pharmacies can no longer offer patients financial rewards in exchange for the transfer of the patient's prescriptions. The Tennessee Board of Pharmacy recently enacted a new rule providing that "[a] pharmacist shall not incent or induce the transfer of a prescription absent the exercise of professional judgment.1

Where permitted by law, pharmacies commonly offer incentives for a patient to transfer a prescription from one pharmacy to another. For example, a pharmacy might offer rewards points, a gift card or cash incentives to encourage a patient to transfer his/her prescriptions. These kinds of rewards are no longer permissible in Tennessee. The new rule does not address the provision of financial incentives in relation to new (or non-transferred) prescriptions. Non-resident pharmacies serving Tennessee patients should also be aware of this new rule. Non-resident pharmacies licensed by the Tennessee Board of Pharmacy must designate a Tennessee-licensed pharmacist-in-charge. This pharmacist-in-charge is required to comply with Tennessee professional conduct requirements, including the prohibition on prescription transfer incentives.

The Tennessee Board of Pharmacy indicates that the prohibition on prescription transfer incentives is designed to protect patients and promote continuity of care: "While these coupons have benefited some small businesses and consumers, they have an overall negative impact on the safe delivery of pharmacy services across the state. Constant transfer of prescriptions for the purpose of obtaining 'gas points' or in-store discounts on non-pharmacy items complicates care delivery and hampers the formation of strong pharmacist-doctor-patient relationships."

A minority of other states also prohibit incentives for prescription transfers. For example, Alabama law provides that "[a] pharmacist and a pharmacy should never offer or participate in the offering of a financial award or benefit, not related to competitive retail pricing of any drug, to induce or encourage any individual to transfer a prescription from one pharmacy to another."2 Likewise, Oregon pharmacy rules bar "[i]ncenting or inducing the transfer of a prescription absent professional rationale."3

The penalty for violation of Tennessee Board of Pharmacy rules may include revocation of a license, suspension of a license, or the imposition of a civil penalty. The civil penalty for a violation of the prescription transfer incentive prohibition may be up to $1,000 per violation.4

Pharmacies located in Tennessee (as well as non-resident pharmacies serving Tennessee patients) should carefully review their processes to confirm compliance with this new rule. Should you have any questions, please contact one of the authors listed or any member of our Specialty Pharmacy & Pharmaceuticals team.


1 Tenn. Comp. R. & Regs. 1140-02-.01(18).
2 Ala. Admin. Code 680-X-2-.22(2)(h).
3 Or. Admin. R. 855-041-1170(5).
4 Tenn. Code § 63-10-305(6).


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