CMS SOM App. W, Tag C-1016

(iv) Rules for the storage, handling, dispensation, and administration of drugs and

biologicals. These rules must provide that there is a drug storage area that is

administered in accordance with accepted professional principles, that current and

accurate records are kept of the receipt and disposition of all scheduled drugs, and

that outdated, mislabeled, or otherwise unusable drugs are not available for patient

use.

Interpretive Guidelines §485.635(a)(3)(iv)

The CAH must ensure that drugs and biologicals are managed in a manner that is safe

and appropriate, and that its pharmacy system provides all drugs and biologicals

prescribed by the CAH’s practitioners in a timely manner for administration to its

patients.

The CAH’s written patient care policies must include rules governing pharmacy services

within the CAH. The CAH’s rules may be in the form of pharmacy services policies and

procedures. These CAH rules must address storage, handling, dispensing, and

administration of drugs and biologicals within the CAH. The rules must be in accordance

with accepted professional principles of pharmacy and medication administration

practices. Accepted professional principles include compliance with applicable Federal

and State law and adherence to standards or guidelines for pharmaceutical services and

medication administration issued by nationally recognized professional organizations,

including, but not limited to: U.S. Pharmacopeia (www.usp.org), the American Society of

Health-System Pharmacists (http://www.ashp.org/), the Institute for Safe Medication

Practices (http://www.ismp.org/default.asp), the National Coordinating Council for

Medication Error Reporting and Prevention (www.nccmerp.org); the Institute for

Healthcare Improvement (http://www.ihi.org/ihi); or the Infusion Nurses Society

(http://www.ins1.org).

The CAH’s rules must address the following:

• Responsibility for pharmacy services

The CAH must identify the qualifications for and designate an individual who has

overall responsibility for the CAH’s pharmacy services, including development of the

rules governing pharmacy services. The CAH and the responsible individual must

ensure adherence to State law requirements governing who may perform pharmacy

services as well as requirements for supervision of pharmacy staff. The CAH and

responsible individual are also responsible for assuring that pharmacy practices

adhere to accepted professional principles. The CAH is expected to be able to

identify the sources of accepted professional pharmacy practices that it relies upon in

developing the CAH’s pharmacy rules, policies and procedures.

• Storage of drugs and biologicals, including the location of storage areas,

medication carts, and dispensing machines

Consistent with accepted professional principles, CAHs must demonstrate appropriate

storage and preparation of medications under proper conditions of sanitation,

temperature, light, moisture, ventilation, segregation, and security.

• Proper environmental conditions

Where the manufacturer’s FDA-approved package insert specifies environmental

conditions, such as temperature, humidity, exposure to light, etc., for storage of drugs,

the CAH is expected to follow the labeled conditions. CAHs must exercise caution in

dispensing or using any drug or biological that is not labeled to indicate proper

storage conditions or that may have been stored under inadequate conditions.

• Security

The CAH must have policies and procedures that are consistent with State and

Federal law to address who is authorized access to the pharmacy or drug storage area.

Drugs and biologicals must be stored in a secure manner to prevent unmonitored

access by unauthorized individuals. Drugs and biologicals must not be stored in areas

that are readily accessible to unauthorized persons. For example, if medications are

kept in a private office, or other area where patients and visitors are not allowed

without the supervision or presence of a health care professional (for example,

ambulatory infusion), they are generally considered secure. Areas restricted to

authorized personnel only would generally be considered “secure areas.”

CAHs are permitted flexibility in the storage of non-controlled drugs and biologicals

when delivering care to patients, and in the safeguarding of drugs and biologicals to

prevent tampering or diversion. An area in which staff are actively providing care to

patients or preparing to receive patients, i.e., setting up for procedures before the

arrival of a patient, would generally be considered a secure area. When a patient care

area is not staffed, both controlled and non-controlled substances are expected to be

locked.

Medication carts, anesthesia carts, epidural carts and other non-automated medication

carts containing drugs or biologicals (hereafter, all referred to as “carts”) must be

secured when not in use. A CAH’s policies and procedures are expected to address

the security and monitoring of carts, locked or unlocked, containing drugs and

biologicals in all patient care areas to ensure their safe storage and to ensure patient

safety.

If a cart containing drugs or biologicals is in use and unlocked, someone with

authorized access to the drugs and biologicals in the cart must be close by and

directly monitoring the cart. That person could be a nurse, a physician, or other

individual who in accordance with State and Federal law and CAH policy is

authorized access to the drugs and biologicals in the cart. That individual must

monitor the cart and be aware of other people’s activities near the cart. He/she is

responsible for the security of the drugs and biologicals in the cart.

• Handling drugs and biologicals

“Handling” includes reconstituting or mixing medications in accordance with

directions contained in approved labeling provided by the drug’s manufacturer.

“Handling” also includes compounding or admixing of sterile intravenous

preparations or of other drugs, either on- or off-site, using either CAH staff or a

contracted pharmacy service. CAHs use many medications that need to be

reconstituted, mixed or compounded. Whether furnishing the services via CAH staff

or a contractor, the CAH is responsible for proper handling of drugs and biologicals.

Except in emergencies or when not feasible (for example, when the product’s stability

is short), only the pharmacy performs reconstituting, mixing, admixing or

compounding.

• Compounding

All compounding of medications used or dispensed by the CAH must be performed

consistent with accepted professional principles applicable to both sterile and non-sterile

compounding.

Compounded medications, whether non-sterile or sterile, may be subject to physical

and chemical contamination and unintended variations in strength. Microbial

contamination and bacterial endotoxins are particularly hazardous with respect to

compounded medications that are intended to be sterile.

A CAH pharmacy must be administered in accordance with accepted professional

principles, and therefore must be able to demonstrate how it assures that all sterile

and non-sterile compounded preparations dispensed and/or administered to the

CAH’s patients are being compounded consistent with accepted professional

standards to ensure safety. The CAH must be able to provide evidence that the

CAH’s standard operating procedures for compounding, if performed in-house, and

for quality oversight of compounding, regardless of source, are consistent with

accepted professional principles.

Compounding may take place in the CAH’s pharmacy on-site and/or the CAH may

obtain some or all of its compounded medications from external sources. Regardless

of the source, if accepted standards for safe compounding are not met, compounded

medications may contain less or more than the intended dose and/or may be

chemically or microbiologically contaminated, with potentially serious adverse

consequences for the patients who receive them.

Use of Outside Compounders (also known as Outsourcing Facilities)

The Drug Quality and Security Act (DQSA), signed into law on November 27, 2013,

contains provisions relating to the oversight of compounding of human drugs. The

DQSA created a new section 503B in the FDCA under which a compounder may

elect to become an “outsourcing facility.” The law defines an “outsourcing facility”

as a facility at one geographic location or address that is engaged in the compounding

of sterile drugs; has elected to register as an outsourcing facility; and complies with

all of the requirements of section 503B of the FDCA. Facilities that elect to register

as outsourcing facilities:

• Must comply with the FDA’s Current Good Manufacturing Practice (CGMP)

requirements, which contain minimum requirements for the methods,

facilities, and controls used in manufacturing, processing, and packing of a

drug product. The CGMP requirements make sure that a product is safe for

use, and that it has the ingredients and strength it claims to have. The FDA’s

publishes the most current versions of its draft and final regulations and

guidance related to compounding on its website:

http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Phar

macyCompounding/default.htm ;

• Will be inspected by FDA according to a risk-based schedule; and

• Must meet certain other conditions, such as reporting adverse events and

providing FDA with certain information about the products they compound.

In a January 2014 letter to purchasers of compounded medications (available at

http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCo

mpounding/ucm380596.htm ), the Commissioner of the FDA encouraged the use of

registered outsourcing facilities and noted that,“[a]s a purchaser of compounded

drugs, you can play an important role in improving the quality of compounded drugs

by requiring compounding pharmacies that supply drugs to your facility to register as

outsourcing facilities. Once they register, you and the patients you serve can be

assured that FDA will inspect these facilities on a risk-based schedule, hold them to

CGMP requirements, monitor the adverse event reports they are required to submit to

the agency, and require appropriate labeling.”

FDA has posted a list of Registered Human Drug Compounding Outsourcing

Facilities, including the end date of the last FDA inspection related to compounding,

whether investigators observed any significant objectionable conditions, and whether

other FDA actions were taken based on the last inspection, at:

http://www.fda.gov/drugs/guidancecomplianceregulatoryinformation/pharmacycomp

ounding/ucm378645.htm

Note that these registered outsourcing facilities are also popularly referred to as

“503B pharmacies.”

• Use of Compounding Pharmacies

If a CAH obtains compounded medications from a compounding pharmacy rather

than a manufacturer or a registered outsourcing facility, then the CAH must

demonstrate how it assures that the compounded medications it receives under this

arrangement have been prepared in accordance with accepted professional principles

for compounded drugs as well as applicable State or Federal laws or regulations. For

example, does the contract with the vendor include provisions:

• Requiring the vendor to meet the requirements of Section 503A of the FDCA

concerning pharmacy compounding of human drug products?

Note that these types of compounding pharmacies are also popularly referred to as

“503A pharmacies” and generally are subject to oversight only by their State

pharmacy board.

For Information – Not Required/Not to be Cited

ASHP Research and Education FoundationTM “Outsourcing Sterile Products

Preparation: Contractor Assessment Tool”

The ASHP Research and Education FoundationTM offers a tool that CAHs may

find useful for assessing vendors that provide compounded sterile preparations.

http://www.ashpfoundation.org/MainMenuCategories/PracticeTools/SterileProduc

tsTool.aspx and click on "Start using Sterile Products Outsourcing Tool now."

• Dispensing drugs and biologicals

CAHs must comply with applicable State law that governs the qualifications,

certification, or licensure of staff who dispense drugs and biologicals. There must be

sufficient numbers and types of personnel to provide accurate and timely medication

delivery.

Medications must be dispensed in a timely manner. The CAH must have a system

that ensures medication orders get to the pharmacy promptly and medications are

available for administration to patients when needed, including when the pharmacy is

not open. Methods to accomplish this when the pharmacy is not open could include,

but are not limited to, one or more of the following: automated dispensing units

outside the pharmacy, night cabinets, contracted services after hours via telepharmacy

contracting, on-call pharmacists, etc.

Concerns, issues or questions pharmacy staff have about any medication order must

be clarified with the prescribing practitioner or another practitioner responsible for

the care of the patient before dispensing.

A CAH may utilize a unit dose system, individual prescription, floor stock system or

a combination of these systems, properly stored.

• Automated Dispensing Cabinets (ADCs) for medications are a secure option for

medication storage since they ensure locked storage of medications and allow for

electronic tracking of controlled substances and other drugs. These cabinets often

have embedded security features, such as login and password or biometric

identification so that they can only by accessed by authorized personnel.

• Policies and procedures must address who can access medications during after-hours.

For Information Only – Not Required/Not to be Cited

In addition to the required pharmacy policies and procedures above, a well-designed pharmacy service would have policies and procedures addressing

medication safety practices such as:

• Implementation of a do-not-use abbreviation list. CAHs may wish to refer to

lists offered by the Institute for Safe Medication Practices

(http://www.ismp.org/tools/errorproneabbreviations.pdf) or The Joint

Commission

(http://www.jointcommission.org/assets/1/18/Do_Not_Use_List.pdf) ;

• A high alert drug list. CAHs may wish to refer to a high alert drug list

offered by the Institute for Safe Medication Practices

(https://www.ismp.org/tools/institutionalhighAlert.asp);

• For specific high alert medications designated by the CAH, having two

health professionals independently check doses CAHs may wish to refer to

guidance from the Institute for Safe Medication Practices concerning

appropriate use of double-checks

(http://www.ismp.org/Newsletters/acutecare/showarticle.aspx?id=51);

• Quantities of medications are dispensed which minimize diversion and

potential adverse events while meeting the needs of the patient;

• Whenever possible, medications are dispensed in the most ready to

administer form available from the manufacturer or, if feasible, in unit

doses that have been repackaged by the pharmacy;

• The CAH consistently uses the same dose packaging system, or, if a

different system is used, provides education about the use of the dose

packaging system; and

• The American Society of Health-System Pharmacists (ASHP) recommends

that floor stocks of medications should be limited to medications for

emergency use and routinely used safe items (e.g. mouthwash, antiseptic

solutions).

When utilizing automated dispensing cabinets (ADCs), the Institute for Safe

Medication Practices recommendations include the following: (See:

http://www.ismp.org/Newsletters/acutecare/articles/20090212.asp and

http://www.ismp.org/Tools/guidelines/ADC_Guidelines_Final.pdf ) Security

processes are established to ensure adequate control of medications outside of the

pharmacy and to reduce the potential for medication diversion from ADCs.

• Utilize biometric user identification or, at a minimum, change user

passwords quarterly.

• Link the ADC to the pharmacy computer to allow for patient “profiling,” so

that a pharmacist can review each medication order and screen it for safety

before the drug is dispensed or accessed by the nurse or other healthcare

professional.

• Limiting the availability of overrides to the ADC system.

• Limiting access to drugs based on the patients profile so to decrease

medication selection errors.

• Store each medication and strength in an individual lidded ADC

compartment that opens only when the specific medication is selected.

• Document the destruction of medication waste at the time of removal of the

medication whenever possible. Record this waste via the ADC, and match

the administered dose with ordered dose. Have a process to routinely

review/reconcile the documented medication waste.

• Return all medications to a common secure one-way return bin that is

maintained by pharmacy, not to an individual pocket or bin within the

ADC.

• Administration of drugs and biologicals to patients

CAHs must comply with applicable State law that governs the qualifications,

certification, or licensure of staff who administer drugs and biologicals and must

adhere to accepted standards of practice for medication administration. See the

guidance for §485.635(d)(3) concerning medication administration by CAH nursing

staff.

• Record keeping for the receipt and disposition of all scheduled drugs

The U.S. Department of Justice Drug Enforcement Administration (DEA) classifies

drugs that are controlled in accordance with the Controlled Substances Act into five

“schedules”, ranging from Schedule I substances, which have a high potential for

abuse and no currently accepted medical use in treatment, to Schedule V substances,

which have a low potential for abuse relative to substances listed in Schedule IV and

consist primarily of preparations containing limited quantities of certain narcotics.

The CAH is required to accurately track the receipt and disposition of all scheduled

drugs used in the CAH. Components of a record system for scheduled drugs would

include:

• Locked storage of scheduled drugs when not in use.

• Accountability procedures to ensure control of the distribution, use, and

disposition of all scheduled drugs.

• The record system tracks movement of all scheduled drugs from the point of

entry into the hospital to the point of departure either through administration

to the patient, destruction or return to the manufacturer. This system provides

documentation on scheduled drugs in a readily retrievable manner to facilitate

reconciliation of the receipt and disposition of all scheduled drugs.

• Any discrepancies in count are reconciled promptly. The CAH is capable of

readily identifying loss or diversion of all controlled substances in such a

manner as to minimize the time frame between the actual loss or diversion to

the time of detection and determination of the extent of loss or diversion.

• Ensuring that outdated, mislabeled, or otherwise unusable drugs are not used

for patient care

The CAH must have a pharmacy labeling, inspection, and inventory management

system that ensures that outdated, mislabeled, or otherwise unusable drugs and

biologicals are not available for patient use. This would include drugs that are the

subject of a manufacturer’s recall.

A drug or biological is outdated after its expiration date, which is set by the

manufacturer based on stability testing under specified conditions as part of the FDA

approval process. It should be noted that a drug or biological may become unusable

prior to its expiration date if it has been subjected to conditions that are inconsistent

with the manufacturer’s approved labeling.

A drug or biological is also outdated after its “beyond-use date” (BUD), which may

be reached before the expiration date, but never later. The BUD takes into account

the specific conditions and potential for deterioration and microbial growth that may

occur during or after the original container is opened, while preparing the medication

for dispensing and administration, and/or during the compounding process if it is a

compounded medication.

The BUD is to be based on information provided by the manufacturer, whenever such

information is available. The CAH must maintain and implement policies and

procedures that provide clear and consistent direction to pharmacy staff regarding

how to determine a BUD when complete BUD information is not available from the

manufacturer

For individual drug containers: each floor stock drug container is expected to be

labeled with the name and strength of the drug, lot and control number equivalent,

and expiration date. Appropriate accessory and cautionary statements are included as

well as the expiration date and/or, if applicable, a BUD. In addition, where

applicable, each patient’s individual drug container is expected to be labeled with the

patient’s full name and quantity of the drug dispensed.

If the unit dose system is utilized, each single unit dose package is expected to be

labeled with the name and strength of the drug, lot and control number equivalent,

expiration date. and/or, if applicable, a BUD.

For Information Only

Certain provisions of the FDCA address the labeling of prescription drugs generally

(e.g., section 503(b)(2) of the FDCA). Section 503B of the FDCA includes labeling

requirements for drugs compounded by registered outsourcing facilities (see section

503B(a)(10)). Although CAHs are expected to comply with these requirements,

surveyors conducting a Medicare survey do not assess compliance with other Federal

law.

• Assessing Adverse Drug Reactions & Medication Administration Errors

In accordance with §485.635(a)(3)(v) the CAH must have a system for staff to report

adverse drug reactions and medication administration errors. The pharmacy services is

expected to assess all such reports to determine if problems or errors in pharmacy

services caused or contributed to the adverse reaction or medication administration error.

Where such problems or errors are identified, the CAH is expected to take effective

action to address the identified issues.

Survey Procedures §485.635(a)(3)(iv)

• Has the CAH adopted pharmacy rules that were developed with the advice of the

CAH’s professional healthcare staff?

• Has the CAH identified the qualifications of and designated an individual who is

responsible for developing and implementing the rules for the CAH’s pharmacy

services, consistent as applicable with State and Federal law?

• Review the qualifications of the responsible individual to verify that they satisfy

the CAH’s written criteria.

• Ask CAH practitioners, nursing and pharmacy staff whether the CAH’s pharmacy

service dispenses prescribed drugs and biologicals in a timely manner. If there is

evidence in medical records reviewed of late administration of prescribed

medications, probe to determine whether delays are due to pharmacy dispensing

delays.

• Ask the individual responsible for CAH pharmacy services what sources of accepted

professional principles of pharmacy practice the CAH relies upon in developing and

implementing its CAH pharmacy rules, policies and procedures. Is the source(s) a

nationally recognized source?

• Are drugs and biologicals stored in a secure manner?

o Are drugs stored in areas not accessible to unauthorized personnel?

o When drugs or biologicals are kept in a patient care area during hours when

patient care is not provided, are they locked up?

• Conduct a spot check of drug use and other inventory records to ensure that drugs are

properly accounted for.

• Determine if the CAH has a system that tracks movement of all scheduled drugs from

the point of entry into the CAH to the point of departure either through administration

to the patient, destruction of the drug, or return to the manufacturer.

o Does this system provide documentation on scheduled drugs in a readily

retrievable manner to facilitate reconciliation of the receipt and disposition of all

scheduled drugs?

o Review records of scheduled drugs over a recent time period. Is there evidence of

discrepancies, and if so, of efforts by the CAH to reconcile and address the

discrepancies?

• Interview the person responsible for pharmacy services as well as other CAH staff

to determine their understanding of the CAH’s controlled drug policies.

• Verify that only a pharmacist or other personnel authorized in accordance with State

and Federal law compound, label and dispense drugs or biologicals, regardless of

whether the services are provided by CAH staff or under arrangement.

o Interview pharmacy and CAH staff to determine how drugs and biologicals are

dispensed;

o Observe on-site dispensing operations;

• Review records to see if drugs and biologicals are removed from the pharmacy by

unauthorized personnel;

• Do the CAH’s pharmacy rules address ADCs, if used within the CAH? Are the

ADCs being used in the manner prescribed by the CAH’s rules?

• Can the CAH demonstrate that compounded medications used and/or dispensed by

the hospital are being compounded consistent with standard operating procedures

and quality assurance practices?

• Does the individual responsible for the pharmacy service, including compounding

policies, practices and quality assurance within the CAH, and selecting and

overseeing any external sources of compounded medications, have the expertise

to conduct effective quality oversight?

• Can the individual responsible for the pharmacy services explain the risk level(s)

of the CSPs being produced in-house and/or obtained from external sources?

• If any CSPs are produced in the CAH:

• Ask for one or more examples of situations in which a BUD had to be determined

for a compounded sterile medication (CSP) based on the policy. Interview

pharmacy personnel assigned to carry out this function within the CAH and/or to

assess how this is done by external source(s) of CSPs. Is there evidence that the

BUDs are determined consistent with the CAH’s rules, policies and procedures?

o Interview staff who engage in sterile and non-sterile compounding. Are they

knowledgeable about applicable levels of aseptic practices?

o Ask the individual responsible for pharmacy services to demonstrate how the

following are accomplished to ensure that sterile compounding practices are

consistent with standards for the risk level(s) of CSPs being produced

for/dispensed to CAH patients:

• Verification of compounding accuracy and sterility.

• Environmental quality and controls, including environmental sampling;

testing and monitoring; and cleaning and disinfection;

• Personnel training and competency assessment, including but not limited

to accuracy/precision in identifying and measuring ingredients; cleansing

and garbing; aseptic manipulation skills; environmental quality and

disinfection; appropriate work practices within and adjacent to the direct

compounding area; verification/calibration of equipment; sterilization; and

post-production quality checks.

• Review the CAH’s procedures for maintaining the quality of CSPs during storage,

transport and dispensing. Are CSPs packaged in a manner to protect package

integrity and sterility? How are CSP-specific requirements with respect to

motion, light exposure, temperature and potentially hazardous contents

addressed? How does the CAH ensure that such information is effectively

conveyed to non-pharmacy health care personnel and/or to patients/caregivers, if

applicable?

• Review the pharmacy rules, policies and procedures for determining BUDs (for

medications compounded in-house as well as from external sources).

o Can the CAH demonstrate that the policies and procedures are consistent with

or more stringent than the applicable nationally accepted standards?

o Can it demonstrate that the pharmacy personnel assigned to determining

BUDs when a manufacturer’s instructions are not available have the expertise

and technical support needed to properly conduct the assessments needed to

make such determinations in a manner consistent with standards and hospital

policies?

• Ask for one or more examples of situations in which a BUD had to be determined

for a compounded sterile medication (CSP) based on the policy. Interview

pharmacy personnel assigned to carry out this function within the CAH and/or to

assess how this is done by external source(s) of CSPs. Is there evidence that the

BUDs are determined consistent with the CAH’s rules, policies and procedures?

• If the CAH obtains compounded products from an external source that is not an FDA

registered outsourcing facility, can it demonstrate that it systematically evaluates and

monitors whether these sources adhere to accepted professional principles for safe

compounding?

• Does the CAH have a process for following up on adverse drug reactions and errors

in medication administration reported by CAH staff in accordance with

§485.635(a)(3)(v)? If any have been reported, did the CAH thoroughly assess and

analyze them? Has the CAH taken effective preventive action to address identified

issues?

• Spot-check the labels of individual drug containers to verify that they contain the

following minimal information:

o Each patient’s individual drug container bears his/her full name and strength and

quantity of the drug dispensed. Appropriate accessory and cautionary statements

are included as well as the expiration date, and, when applicable, a BUD.

o Each floor stock container bears the name and strength of the drug, lot and control

number of equivalent, expiration date, and, when applicable, a BUD.

• If the unit dose system is utilized, verify that each single unit dose package bears

name and strength of the drug, lot and control number equivalent, expiration date,

and, when applicable, a BUD.

• Spot-check patient-specific and floor stock medications to identify expired,

mislabeled or unusable medications, including medications that are past their BUD.