New California Law Bans Chain Community Pharmacy Productivity Quotas for Pharmacists and Pharmacy Technicians | Hinshaw & Culbertson – Healthcare
Last year, the New York Times published an article titled “How chaos in pharmacy chains is putting patients at riskThe article described how many pharmacists at large drugstore chains “struggle with filling prescriptions, administering flu shots, dealing with drive-thrus, answering phones, managing the register , advising patients and calling doctors and insurance companies…all while rushing to meet corporate performance metrics they’ve called unreasonable and dangerous in an industry pressed to do more with less.” and recent data obtained by investigative reporters for an NBC News article titled “Overwork, understaffed: Pharmacists say industry in crisis puts patient safety at riskalso alleges that large publicly traded pharmacy chains are imposing performance quotas on licensed pharmacists and pharmacy technicians that put the health and well-being of patients at risk. For itself, the California Pharmacy Association said that “benchmarks and quotas are not conducive to the clinical practice of pharmacy and may in fact inhibit a pharmacist’s care for their patients.”
California Senate Bill 362
Prohibitions of productivity quotas. Proclaimed September 27, 2021, and effective January 1, 2022, Senate Bill 362 amends California Business and Professions Code Section 4113.7 prohibit chain community pharmacies from setting performance quotas related to functions for which a pharmacist or pharmacy technician license is required. For the purposes of the new law, a “quota” is a fixed number or formula related to the tasks for which a pharmacist or pharmacy technician license is required, against which the community pharmacy chain or its agent measures or evaluates the number of times a pharmacist or pharmacy technician performs tasks or provides services while on duty. “Community pharmacy chain” is defined as a chain of 75 or more pharmacies in California owned by the same owner.
Disclosure of Quota Requirements Prohibited. Effective January 1, 2022, Senate Bill 362 amends California Business and Professions Code Section 4317 to prohibit chain community pharmacies from communicating the existence of quotas to pharmacists or pharmacy technicians who are its employees or with whom it contracts, through employees, subcontractors or third parties.
“Quota” includes a fixed number or formula related to one of the following:
- Orders filled.
- Services rendered to patients.
- Programs offered to patients.
- Income obtained.
Permitted Performance Appraisal Activities. The new law does not prohibit a chain of community pharmacies from establishing policies and procedures that help assess the competence and performance of a pharmacist or pharmacy technician in providing patient care if the measures used are not or do not include quotas.
A “quota” made not means one of the following:
- A measure of revenue earned by a particular licensed community pharmacy chain not calculated in relation to tasks performed or services provided by individual pharmacists or pharmacy technicians;
- Any evaluation or measurement of the competence, performance or quality of patient care of a pharmacist or pharmacy technician if the evaluation does not use quotas; Where
- Any performance metrics required by state or federal regulators that do not use quotas.
Corporate Pharmacy Practice – Conflict of Interest?
Productivity quotas. A productivity quota is a specified quantity of goods that a particular division, department, or individual is expected to produce within a prescribed period of time. This term is most often applied to the manufacturing sector where employees generally must meet prescribed quotas to keep their jobs or gain promotions. The use of productivity quotas is common in most industries; however, they may present a conflict of interest when used in a pharmaceutical environment, as pharmacists are expected to make medical decisions based on patient needs and not be obligated to meet company benchmarks that conflict with their ethical standards and training.
Corporate Pharmacy Practice. Current law prohibits most categories of healthcare providers from being employed by companies that are not wholly owned by licensees. Pharmacists are one of the few categories of licensed healthcare providers who are often directly employed by large, publicly traded companies. Pharmacists and pharmacy technicians often find themselves in the position of being forced to meet company-imposed, profit-driven performance quotas that interfere with professional practice and judgment. This may run counter to their obligation and efforts to provide the kind of conscientious patient care that should be the sole goal of all licensed healthcare professionals.
Compliance measures to be followed by pharmacies
The board of the California Board of Pharmacy may take enforcement action against a chain of community pharmacies, as defined in subdivision (c) of section 4001 of the Business and Professions Code, that violates section 4113.7 of the Business and Professional Code. unless, through clear and convincing evidence, the community pharmacy chain demonstrates that the violation was contrary to its policy. The only way for a community pharmacy chain to demonstrate that a violation is against its policy is if the community pharmacy chain has an effective compliance plan that addresses productivity quotas and includes policies and procedures that prohibit productivity quotas.
We understand that the California Board of Pharmacy is already developing an education program for pharmacists and technicians regarding Section 4113.7 of the Business and Professions Code, as well as a process for pharmacists and technicians in pharmacy to file complaints regarding violations of the ban productivity.
Compliance programs. Pharmacies should develop or revise their corporate compliance programs to incorporate the new ban on pharmacist and pharmacy technician productivity quotas and develop comprehensive policies and procedures (which include whistleblower protections) related to it. . Compliance program policies and procedures should encourage employees to report pharmacy managers who impose prohibited quotas on pharmacists or pharmacy technicians. Pharmacies must also educate and train their staff on new and updated compliance program requirements and related policies and procedures.
Human resources policies. Pharmacies should review and revise annual evaluations of pharmacists and pharmacy technicians and/or competency and performance evaluations that use prohibited quota-based criteria. Pharmacist and pharmacy technician employees must be notified of the change in performance evaluation criteria.
The impact of SB 362 on all drugstore chains. All owners of multiple pharmacies should take note of the potential implications of the new law’s “standard of care” that applies to chain pharmacies with 75 or more locations in California, and should consult with a competent pharmacy attorney to review and assess the existing pharmacy. productivity quotas to determine whether or not to terminate; or modify productivity quotas to ensure that they are reasonable, appropriate and not prohibited by the California Pharmacy Practice Law.