Refund of undue refund - a few words about National Health Fund inspections in pharmacies

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Antoni Skoczek|
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Recently, more and more owners of public pharmacies and pharmacy outlets have been contacting our office seeking help in the unequal fight against the National Health Fund, which, as a result of inspections, often imposes huge financial sanctions on them, consisting in the obligation to return the refund received or pay a contractual penalty, which for many of them means the end of their dreams of a thriving business, and sometimes even the need to close the pharmacy.

As an introduction, it should be mentioned that a refund is an additional payment from the National Health Fund to the amount that the patient must pay for a medicine or other reimbursed product, largely covering the costs incurred by the pharmacy when ordering these products from the wholesaler. In other words, pharmacies do not make money on reimbursed drugs - revenues from reimbursement do not go primarily to the pocket of the pharmacist selling the drugs at the counter, nor to the pharmacy owner, but after inspections carried out by the National Health Fund, it is the latter who is charged with the obligation to return the undue refund in full. . In short, the pharmacy owner has to pay out of his own pocket for the medicine received by the patient - often several, a dozen, several dozen or even several hundred thousand zlotys.


An increasing number of inspections and financial sanctions imposed - intensified activities of the National Health Fund

 

According to the report on the activities of the Control Department for the second quarter of 2023 published by the National Health Fund on September 18, 2023 - within three months, the National Health Fund carried out a total of 682 inspections and verification activities, of which 175 of them related directly to the implementation of the contract. for dispensing reimbursed medicines, foodstuffs for particular nutritional uses and medical devices on prescription in pharmacies and pharmacy points[1].

During the inspection, the National Health Fund found deficiencies in the implementation of a total of 273,746 reimbursed prescriptions submitted for inspection, which resulted in the imposition of financial penalties and the obligation to return the refund in the total amount of PLN 19,724,884. Calculated per one inspection, this amounts to a significant amount of PLN 240,547.

The most common deficiencies found by the auditors were:

  1. forwarding to the OW NFZ in electronic messages data that is inconsistent with the actual state of affairs regarding filled prescriptions found in pharmacies;
  2. dispensing more drug than indicated in the dosage method or in the absence of a given dosage method;
  3. failure to report or incorrect reporting of the date of prescription, patient's additional entitlements; identifier of the uninsured person entitled to health care services, identifier of the National Health Fund branch, identifier of the person dispensing the prescription, information on the issuance of a substitute and the EAN code of the prescribed drug, EAN/GTIN code of the ingredient of the prescription drug, pro familiae annotation;
  4. filling a prescription by a person who does not have the qualifications and authorizations to fill it.

Financial sanctions
legal basis

 

Financial sanctions imposed by the National Health Fund as a result of deficiencies found during the inspection can generally be divided into two categories - 1) refund of undue reimbursement and 2) obligation to pay a contractual penalty.

The obligation to return the refund is regulated by the legislator in Art. 43 section 1 point 6 of the Reimbursement Act of May 12, 2011 on the reimbursement of medicines, foodstuffs intended for particular nutritional uses and medical devices (consolidated text: Journal of Laws of 2022, item 463 - "Reimbursement Act"), according to which:

“1. In order to provide the services covered by the prescription fulfillment contract, the pharmacy is obliged to: (...) 6) refund the price of the medicine, food for special nutritional purposes, medical device, including statutory interest for delay, calculated from the date on which the refund was paid to the date of its return, within 14 days from the date of receipt of the request for payment, if as a result of verification or inspection of the information referred to in point 2, or the inspection referred to in points 3 and 4, it is found that the prescription was filled in violation of the provisions of the Act, provisions on health care services financed from public funds, provisions of the Act of September 6, 2001 - Pharmaceutical Law and provisions on the professions of doctor and dentist.

The obligation to pay a contractual penalty is based on the regulation of the Minister of Health of December 8, 2011 on the general terms and conditions of contracts for the supply of prescriptions and the framework template for a contract for the supply of prescriptions (consolidated text: Journal of Laws of 2021, item 337). The entire chapter 4 of the General Terms and Conditions is devoted to regulating this issue. Pursuant to the content of § 8 section 1 of the annex to the above-mentioned regulations:

“1. In the event of non-performance or improper performance of the contract for the supply of prescriptions, resulting from circumstances for which the entity running the pharmacy is responsible, the President of the Fund or the director of the provincial branch of the Fund referred to in § 1 section 2, imposes a contractual penalty.”

The amount of the contractual penalty depends on the type and seriousness of the identified deficiencies and may range from PLN 200 to PLN 2 % of the amount of reimbursement received by the pharmacy - for a period of twelve to even twenty-four settlement periods from the moment of violation of the prescription fulfillment contract.


Refund of undue refund pursuant to Art. 43 section 1 point 6 of the Reimbursement Act - Is it always justified?

 

The most severe financial sanction imposed on pharmacies due to its size is undoubtedly the refund of undue refunds, because as a result of its imposition, the pharmacy bears the cost of product reimbursement, which, under the Constitution of the Republic of Poland, is the responsibility of the Polish state, generating huge and unexpected costs for the pharmacy.[2]. At the same time, the National Health Fund generally deducts the sanction imposed in this way from the refunds due to pharmacies for subsequent settlement periods pursuant to Art. 46 section 1 of the Reimbursement Act, thus depriving them of funds to conduct their current activities.

From this point of view, the key issue is the answer to the question whether the return of undue refund is justified in every case of deficiencies found by the inspection body?

From the literal wording of the above-mentioned regulation of Art. 43 section 1 point 6 of the Refund Act, it might seem that basically every violation of the provisions mentioned therein, as well as implementing acts in the form of, among others, regulation of the Minister of Health on prescriptions, may lead to imposing on the pharmacy operator an obligation to return the refund received along with statutory interest for delay from the moment of its receipt.

However, this kind of interpretation is completely wrong. This understanding of the regulations is in clear contradiction with the established jurisprudence of both the Supreme Court and common courts - which, however, does not stop the National Health Fund from demanding reimbursement from pharmacies even in the most trivial cases. The National Health Fund benefits from the fact that not all people affected by financial sanctions decide to appeal and go to court. 

It should be emphasized that the sanction provisions introduced by the legislator into the Reimbursement Act cannot be read without taking into account the purpose they are to fulfill in legal transactions from the perspective of the refund system, for ensuring which under Art. 68 section 2 of the Constitution of the Republic of Poland, state authorities are responsible. In order to correctly decode the content of these provisions, it is necessary to determine the meaning of the refund itself, which will allow us to fully understand the conditions for their application.

Court decisions

 

As the Supreme Court aptly explained in its judgment of January 4, 2007:

“Reimbursement (…) is an element of the universal health insurance system. The need to ensure universal and equal access to medical services for all includes not only the services provided by doctors or health care facilities, but also the state guarantee - resulting indirectly from Art. 68 of the Constitution - citizens' access to cheaper supplies of medicines that do not take into account pure economic calculation. The function of reimbursement is therefore to compensate pharmacies for the difference between the market price of the drug (medical material) and its retail price for the insured consumer who purchases the drug (medical material) at a much lower price or - in special cases - free of charge.[3].

In the light of the above, there is no doubt that since the basic purpose of reimbursement is for the state to provide eligible citizens with access to cheaper supplies of medicines, the sanction provisions should be ancillary to securing such a specific goal. Therefore, in order to read the correct normative meaning of Art. 43 section 1 point 6 of the Reimbursement Act cannot be limited only to its literal aspect. Such a reading of the legal text is in complete contradiction with the derivational concept of legal interpretation adopted in the doctrine and case law and disregards the location of a given norm in the entire system and the function that this norm is to fulfill - removing from the interpreter of the legal text any obligation to interpret the provision and thus constituting the implementation of "a principle harmful to citizens and dangerous to decision-makers clara non sunt interpretanda"[4].

The Supreme Court rightly drew attention to this issue in its judgment of April 21, 2010, clearly stating that "Small, removable errors committed when dispensing prescriptions do not constitute grounds for refusing reimbursement of the price of drugs or medical devices, as provided for in Art. 63 section 1 of the Act of August 27, 2004 on health care services financed from public funds (Journal of Laws No. 210, item 2135).”[5].

The Supreme Court then reached the same conclusions in its judgment of March 9, 2012, emphasizing that: "(...) however, we should not lose sight of the purpose for which the Act formulates stringent requirements for issuing prescriptions and dispensing drugs based on them. First and foremost, this is to ensure patient safety. However, when it comes to reimbursed medicines, the above-mentioned rigor is intended to ensure that public funds do not go to an unauthorized person. The assessment of formal deficiencies in the prescription should therefore be undertaken taking into account the purpose served by this formalism.[6].

The above position - with few exceptions - can also be considered established in the jurisprudence of common courts. As an example, we refer readers to the judgment of the Court of Appeal in Szczecin of January 29, 2019.[7] and the judgment of the District Court in Łódź of July 24, 2020.[8], which firmly supported the need for the inspection body to weigh individual deficiencies found during the inspection before deciding to impose such far-reaching financial sanctions as the obligation to return a refund to the entity running the pharmacy.

Supplementing the following arguments, it should be noted that the National Health Fund also has another type of disciplinary actions in the event of irregularities being detected, and thus imposing financial sanctions, often leading to the bankruptcy of enterprises - should be treated as ultima ratio and used only in situations where, as a result of incorrect prescription fulfillment, the reimbursement system has become unsealed or control of funds paid as part of the refund is impossible. In any other case, the inspection body should limit itself to formulating appropriate post-inspection recommendations in accordance with Art. 61s section 2 point 2 of the Act of 27 August 2004 on health care services financed from public funds (i.e Laws 2022 item 2561 – Benefits Act). At least the first time.


Obligation to return the refund - what are the stages of such a case?  
– inspection proceedings, appeal and trial with the National Health Fund

Pharmacy inspection

 

It should be emphasized here that entities running pharmacies are not defenseless against the actions taken by the National Health Fund and have a number of procedural instruments at their disposal to protect their own interests - which, however, requires quick and consistent action, which is best started during the inspection carried out in the pharmacy.

Our experience shows that already during an inspection, the National Health Fund usually calls for the submission of appropriate documents and explanations by the inspected entity, which may be the first step in taking effective defense against future financial consequences. Even in the absence of such a request pursuant to Art. 61p of the Benefits Act, anyone, including an entity running a pharmacy, may submit statements to the inspectors regarding the subject of the inspection. Well-prepared explanations may influence the final decision of the control body as to the scope of obligations imposed in the post-audit statement, or at least prepare the right ground for further stages of defense.


ABOUT
calling the president of the National Health Fund - raising objections to the post-audit report

 

If the National Health Fund completes the inspection and, finding specific deficiencies in the post-inspection report, imposes financial sanctions on the pharmacy - then the manager of the inspected entity, i.e. the manager of the pharmacy, has the right to raise objections to the post-inspection report within 14 days from the date of its delivery. These objections should be submitted to the President of the Fund through the appropriate branch of the National Health Fund that carried out the inspection. The President of the National Health Fund should consider the objections raised within the next 14 days and, if the pharmacy's position is taken into account, may change the post-inspection statement in whole or in part, including the financial consequences. [9].

As indicated in the report on the activities of the Control Department mentioned at the beginning, in the second quarter of 2023, the inspected entities submitted 83 objections to the assessments and conclusions contained in the post-audit reports. During the same period, 93 objections were considered, of which only 17 were partially accepted and one was fully accepted.

Failure to take into account the objections to the post-inspection request by the President of the National Health Fund closes the administrative path for pharmacies to defend themselves against the refund request, which does not mean, however, that this is the end of the fight for a fair decision.


Lawsuit

In the next steps, pharmacies affected by the imposed financial sanctions have an open path to court proceedings. Importantly, the case law has determined that the claims of the National Health Fund for reimbursement are of a civil law nature, and therefore the jurisdiction of administrative courts is excluded in this respect.[10]. At the same time, it should be emphasized that from the perspective of protecting the property interests of the pharmacy, it is crucial to take legal action at the earliest possible date - which often allows to avoid offsetting the claims pursued by the National Health Fund with the refunds due to the pharmacy for subsequent settlement periods.

Our experience shows that with a properly constructed application, the courts often agree with the arguments put forward by the law firms representing pharmacies and often (though not always) prohibit the National Health Fund from making deductions from the claimed contractual penalty and refunding the undue refund until the case is finally resolved. – one way or another. At the same time, fortunately, the statistics before the courts are clearly better for pharmacies than when the case is handled solely by the National Health Fund. Although, of course, court cases are full of traps and seemingly easy paths to success, which is why they require skillful handling.


Summary

 

To sum up the above, it should be emphasized that the activities of the National Health Fund, which we have been observing for a long time, consist in imposing high financial sanctions in the form of contractual penalties and the obligation to return undue refunds to entities operating pharmacies, even in the event of finding extremely trivial deficiencies that do not lead to an actual leakage of the reimbursement system - have no legal basis and are in contradiction with the mission of the National Health Fund, which is intended to be an institution supporting the development of the health care system, but at the same time acting to ensure appropriate availability and quality of health care services, including: by building good relationships with healthcare providers[11].

After years of observation, we are saddened to see that the reason for this state of affairs is not only the imprecise law, but also the approach of the control bodies, which seem to be inappropriately tasked. Currently, the actions taken by the National Health Fund seem to be aimed more often at possible severe financial punishment of the pharmacy, rather than at excluding any irregularities in the future.

At the same time, pharmacies affected by the actions of the National Health Fund described above do not remain defenseless, but to undertake effective defense, quick action and appropriate preparation of appropriate legal instruments are necessary.

Our law firm has been providing legal assistance in disputes with the National Health Fund for many years to both owners of pharmacies and pharmacy outlets, as well as healthcare providers running offices, clinics, outpatient clinics and hospitals, so as a team we have extensive experience in the described field.

If you have any questions related to this issue or need to take legal action on your behalf, please contact us.

Authors: Antoni Skoczek, Piotr Kłodziński

 

[1] https://www.nfz.gov.pl/o-nfz/kontrole-nfz/sprawozdanie-z-dzialalnosci-departamentu-kontroli-za-ii-kwartal-2023-r-,6431.html

[2] M. Czarnuch, [In:] M. Pieklak (ed.), Act on the reimbursement of medicines, foodstuffs for particular nutritional uses and medical devices. Comment, Warsaw 2014, comm. to art. 43 Nb. 17

[3] Judgment of the Supreme Court of January 4, 2007, V CSK 388/06, OSNC 2007, no. 12, item 183.

[4] A. Choduń, M. Zieliński, Justification of interpretative statements from the perspective of the derivational concept of legal interpretation, Archiwum Filozofii Prawa i Filozofii Społecznej 2020/2, p. 8.

[5] judgment of the Supreme Court of April 21, 2010, V CSK 358/09, OSNC - Additional Coll. 2011 No. A, item 3, p.
16.

[6] judgment of the Supreme Court of March 9, 2012, I CSK 216/11, OSNC 2012 no. 9, item 41.

[7] judgment of the Court of Appeal in Szczecin of January 29, 2019, I ACa 335/18, Legalis no. 2180919.

[8] judgment of the District Court in Łódź of July 24, 2020, III Ca 1516/19, LEX no. 3157872.

[9] Pietraszewska-Macheta Agnieszka (ed.), Act on health care services financed from public funds. Commentary, Lex 2023, comm. to art. 61t Nt. 3

[10] resolution of the Supreme Court of December 5, 2014, III CZP 93/14, OSNC 2015 No. 10, item 114, p. 18; judgment of the Supreme Court of January 4, 2017, V CSK 388/06, OSNC 2007 no. 12, item 183, p. 45;

[11] Assumptions for the strategy of the National Health Fund for 2019-2023.

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