Good morning, members of the committee. I am Robert Thompson, Vice President of Pharmacy Operations, with Revco Drug Stores. Our corporate headquarters are in Twinsburg, Ohio, and we operate 2,500 pharmacies in 17 states. In 1997, we will dispense over 120 million prescriptions. I appreciate the opportunity to provide you a snapshot of retail pharmacy operations and the safeguards we maintain to secure patient-identifiable information. As you will understand from my statement, having access to accurate and complete patient records is essential to delivering the highest quality pharmaceutical care.
Today, the community pharmacy infrastructure extends beyond 54,000 retail pharmacies. Chain community pharmacy provides over 60% of the 2.4 billion outpatient prescriptions dispensed annually -- one billion of which are provided through third-party payors. Given the vast number of health care claims processed by community pharmacy, we have been on the cutting edge of incorporating on-line, electronic processing of third-party health care claims into our day-to-day patient care operations. In a health care system where the majority of services are delivered through coordinated care systems, electronic communication has proven essential to providing high quality patient services at the lowest cost.
Revco's pharmacy systems are completely integrated into the electronic prescription infrastructure. That means that all of our prescriptions can be processed and dispensed almost instantaneously through direct communication with our corporate headquarters and third party payors.
Our patients can visit any of our stores nationally to receive pharmacy services, because our pharmacists have access to the patient's profile and comprehensive drug therapy record through our centralized database. This capacity is highly advantageous to the patient's health and to our business operations.
Once a pharmacist begins dispensing a prescription, the patient's prescription information is transmitted in encrypted form to corporate headquarters. Through our centralized database, the pharmacist with the assistance of highly sophisticated software reviews the patient's complete medication profile for potential adverse drug reactions and drug interactions, compliance with drug therapy, and overall drug utilization. Depending on the parameters of the patient's health insurance coverage, a pharmacist will look for potential generic drug opportunities substitution and will check the prescription against the health plan's drug formulary.
The current role of the pharmacist is to focus his time and efforts on discussing the patient's treatment with the patient, the caregiver such as the next of kin, and the prescribing health care provider. The evolving role of the pharmacist is to understand the patient's diagnosis, such as hyperlipidemia, diabetes, hypertension, or asthma, and to actively manage the patient's pharmaceutical treatment as it relates to this diagnosis, to ensure better outcomes for the patient.
The electronic maintenance of patient information ensures quick and accurate delivery of patient pharmacy benefits, reduces waste and costs for payors.
Incorporating electronic systems into our pharmacy operations has eliminated multiple operational functions from the pharmacist's workload, such as manually compiling patient profiles, manually maintaining drug histories, and third-party claims processing. In the past, our pharmacists have spent a significant amount of their time resolving third party administrative issues. Now, our pharmacists are increasingly spending more time with the patient or discussing a patient's care with their health care provider.
Electronic capability is essential in a health care system that has evolved into a coordinated care system where health care providers must have time to consult with one another and their patients to maximize the quality and minimize the cost of health care.
When a patient receives care at one of our pharmacies, the security of his or her patient medication profile is one of our foremost priorities. Revco considers patient information proprietary, established and maintained to serve the patient, the physician, and our pharmacists. In no situation do we sell or give away patient-specific identifiable information for commercial gain.
We protect and secure these records through the use of secured technology and significantly limited accessibility among our pharmacists and employees. Any employee who breaches a patient's confidentiality is subject to immediate termination. In addition, if we use outside vendors for data processing, we demand and ensure through our contracts that they meet our rigorous standards for the security and confidentiality of patient information.
While the advantages of electronic recordkeeping and coordinated care are numerous, there can be hazards. Current federal and state laws do not take into account the potential problems of electronic data systems, such as more readily accessible information, and the number of people working within a health care setting who process patient identifiable information. Very few state laws sufficiently penalize those who disclose protected patient information for inappropriate purposes. Overall, state laws lack uniformity and conflict with one another, which causes confusion among our employees and pharmacists in complying with these state laws. This fragmented legal system could cause unintentional breaches of confidentiality.
Therefore, we believe that Congress should move forward to ensure the confidentiality of patient-identifiable information at the federal level. With our input, the National Association of Chain Drug Stores has developed the attached principles for your consideration as you guide the Department of Health and Human Services in its recommendations to Congress on federal patient confidentiality legislation. We believe that effective, federal confidentiality legislation should include the following elements:
· Minimal interference in a health care professional's provision of care;
· A comprehensive scope, so that state confidentiality laws are unnecessary;
·Strong criminal and civil fines and penalties for those who knowingly and illegally disclose protected information; and
· Sufficient time to implement new uniform standards, including time for software and hardware development, testing and distributing of these products, and employee training.
If federal legislation includes these specific provisions, it will reduce community retail pharmacy's cost of complying with the various state confidentiality laws, increase overall efficiency in recordkeeping, and strengthen current protections for maintaining confidential patient records.
Recommendations to the National Committee on Vital and Health Statistics
Last Congress, NACDS was unable to support Senator Robert Bennett's draft legislation "The Health Information Privacy Protection Act," because the legislation did not adequately address the above concerns. We were concerned that this bill, as initially written, would have tied the hands of the day-to-day operations of a pharmacy, could have resulted in a technological step backward for community pharmacy, and would have increased administrative costs.
Needless Interference with Communications between Health Care Providers
We urge you to consider the real-time impact of requiring patient authorization for the disclosure of patient identifiable information. We do not support federal legislation that would needlessly interfere with communications between pharmacists and their patients and pharmacists and other health care providers. Under the Bennett bill, community pharmacies would have had to obtain patient authorization for the following situations:
As you can see, these situations would interfere with the professional practice of pharmacy.
A pharmacist should be authorized to disclose protected information to treat the patient and receive payment for the prescription as well as other services provided, such as counseling, disease management, and other pharmacy-related care as defined in state pharmacy practice acts.
Federal preemption of state and federal confidentiality laws must be complete to provide consistency to our system-wide operations.
Most chain pharmacies operate in multiple states. Revco operates over 2,500 pharmacies in 17 states. We would find it most efficient and far less confusing if one federal standard existed to ensure the confidentiality of patient information. Many states currently have laws that address patient confidentiality, but often these laws are inconsistent and obsolete. They were often written with a manual, paper claims processing system in mind. As a multi-state corporation, Revco has been forced to purchase, develop, and operate one electronic system that must conform to separate, state-by-state requirements. The more varied federal and state laws are, the higher the costs and the more impractical electronic communication becomes.
We did not believe that the preemption clause in the Bennett bill was sufficient to ensure uniform federal standards that are designed for successful compliance. Without total preemption, we will find it impossible to integrate the necessary patient information and authorizations in our computer software. Electronic transmission will become ineffective.
At the same time, we support retaining state pharmacy practice acts and state board of pharmacy regulations concerning the definition of the practice of pharmacy. State governments have historically governed the practice of health care professionals. The federal government should not infringe on that authority.
While we are very supportive of protecting patient privacy, implementing the extensive requirements of federal confidentiality standards could be expensive. Under any new federal legislation, community retail pharmacies would have to purchase, develop, and implement software that would allow for the input of additional patient information, new safeguards, and other requirements. We believe that a complete assessment, to the extent possible, be made on the implementation costs of complying with a new federal confidentiality law.
We believe that the effective date of any legislation should reflect the uncertainty of the unknown costs and technology needed to implement a new federal law. Adequate time must be allowed for software manufacturers to develop their products, to test and distribute the product, and to train pharmacists on product use. The ability of all health care providers to implement this legislation in a timely manner will be critical to successful implementation. We strongly recommend that regulations required under this act be finalized 12 months after the enactment date, and the effective date extended to at least 24 months after regulations are finalized.
Imposition of Fines and Penalties should be Intent-based
New fines and penalties to discourage anyone who might disclose patient information for personal gain must be included in any federal legislation. However, the standard used to impose these fines should be intent-based. Given the billions of claims community retail pharmacies process and transmit, human error could occur and protected health information could be disclosed unknowingly without patient authorization.
We recommend that a "knowing" standard be included for the imposition of civil and criminal penalties. Health care providers should not be penalized for unintentional disclosures of confidential information.
The Bennett bill would have required the Secretary to promulgate regulations on computer system security and the electronic transmission of patient information. This requirement is inconsistent with the federal government's current participation in standard setting organizations that are developing electronic data standards by consensus with the private sector and state governments. Standard setting organizations are composed of hundreds of active participants representing a broad base of health care industries.
We believe that the Secretary should adopt existing standards for electronic transmission developed by standard setting organizations, such as the National Council for Prescription Drug Programs. If these standards do not exist upon this legislation's enactment, standard setting organizations should have the time to develop them.
Revco fully supports the intent of federal standards to preserve the confidentiality of patient-identifiable health care information. We look forward to working with this committee and the Department of Health and Human Services as you move forward on your recommendations to Congress. I would be pleased to answer any questions you may have.