sarbanes-oxley facts the law was enacted july 30, 2002 the law imposed new or enhanced governance...
TRANSCRIPT
AN UPDATE FROM THE PHARMACY FIELD
Info for non-profits, legal happenings,
and Florida’s legislative update
The Lockwood Law Firm
Sarbanes-Oxley FACTS
The law was enacted July 30, 2002 The law imposed new or enhanced
governance and accountability standards on pubic companies in the for-profit sector
Total of 7 provisions Two provisions apply to non-profits
Sarbanes-Oxley ProvisionsThere are 7 main provisions that public
for-profit companies are required to comply with:1. Independent and Competent Audit
Committee2. Responsibilities of Auditors3. Certified Financial Statements4. Insider Transactions and Conflicts of
Interest5. Disclosure6. Whistle-Blower Protection7. Document Destruction
Non-Required Provisions (still a good idea) If you have an audit committee, have
it comprised of board members who are not also on staff, and if you are audited but don't have an audit committee, consider forming such a committee or task force
Prohibit loans from the organization to board members
If you have a financial consulting firm, choose one that is different from your auditing firm
More Non-Required Provisions Have the full board approve
compensation for the executive director and the top staff financial officer
Adopt an Ethics or Conflict of Interest Policy
WHISTLE-BLOWER PROTECTION SOX makes it a crime to knowingly
take any harmful action with the intent to retaliate against a person who provides law enforcement with truthful information relating to the commission or possible commission of any federal offense.
WHISTLE-BLOWER PROTECTIONSo what do you do to protect yourself
and your organization?* Shore up accounting practices* Do an internal audit* Develop policies that show misconduct will not be tolerated * AND - Develop a whistle-blower policy
WHISTLE BLOWER POLICY- What the policy covers -- complaints about financial improprieties, ethical violations, other illegal activities
- Allows for anonymous complaints
- Reporting typically to HR director, but can be the Audit Committee, Treasurer, General Counsel. May
be better if complaints are reviewed by an “outside” person or group
- Some groups rely on 3rd party vendors and a hotline for staff complaints
- Promises prompt and discreet investigation
- Outlines exactly how the employee is to make the complaint
- Sample policies provided in your handout and an overview article from ASAE
DOCUMENT DESTRUCTION
It is a crime to alter, cover up, falsify, or destroy any document to prevent its use in an official proceeding (e.g., federal investigation, bankruptcy, proceeding before a court or Congress)
You can not persuade someone else to do it for you.
DOCUMENT RETENTION POLICYWhat should be covered in the policy?
- Need to follow laws/regs (Fed and your state) regarding articles of incorporation, bank statements, personnel records, payroll, 401k, pension plans, contracts, leases, deeds, etc.- Official documents such as board minutes, committee summaries, etc.- Web licenses, computer license- Member data- eMail and Voice mail- Periodicals, e-publications
DOCUMENT RETENTION POLICYWhat should be covered in the policy? Include where these documents are
to be stored – backup/archiving And test the system you are using
Include who is responsible to ensure compliance
Include w review of documents when an employee is leaving the association
DOCUMENT RETENTION – Takeaways Must develop, adopt a document
retention/destruction policy and timeline
If there is an official investigation or you know one is imminent – suspend any document destruction - even if it follows the approved timeline
If you don’t comply – you can be fined or go to jail for up to 10 years!
SOX-CONCLUSIONS It’s minimal dollar cost to implement
the 2 provisions While only two provisions apply to non-
profits now, there is chatter that other mandatory provisions will be put into place.
If you can add the others, such as conflict of interest policy, independent audit cmte, and you will be ahead of mandatory requirements.
When you are in compliance or go the extra steps and put in the non-mandatory provisions, let your members know.
Transparency to your members builds trust and credibility for you and your association.
RESOURCES and REFERENCES
ASAE – www.asaecenter.org Knowledge Center
Articles, samples, models Executive Management, Legal, and
Finance Sections listservs Put out a request or search the listserv
archives
BoardSource – www.boardsource.org Reference Papers Samples and models
Google – Refine your search to non-profits!
CURRENT LAW SUITS
IMPACTING THE INDUSTRY
IOWA’S MAC PRICING LAWSUIT
Background March 14, 2014- Iowa state legislature
passed a law regulating PBM management, including provisions requiring PBMs to disclose contract information regarding national compendia for pricing data as well as their calculation of the maximum reimbursement amount pricing
Additionally, the law creates a process to allow pharmacies to appeal or challenge the maximum reimbursement amount rates or maximum reimbursement amount list
IOWA’S MAC PRICING LAWSUIT
September 2, 2014-Pharmaceutical Care Management Association (PCMA) filed a lawsuit in Iowa’s federal district court challenging the legislation
PCMA argued a number of constitutional challenges to invalidate the state’s law, including preemption of federal law and protection of MAC pricing criteria as proprietary trade secrets
IOWA’S MAC PRICING LAWSUIT
Portions of PCMA lawsuit were dismissed earlier this Spring
PCMA amended its complaint to bring back in the issues dismissed in the partial summary judgment
Motion hearings but no oral argument set
The result of Iowa’s federal case provide guide for MAC pricing regulations.
FLORIDA LEGISLATIVE
UPDATE
BILLS THAT ARE NOW LAW
HB 279 Allows Florida pharmacists to administer
all vaccines (including travel vaccines) recommended by the Center for Disease Control and Prevention to adults
Corrects and issue with pharmacist intern training by allowing Florida registered interns under the supervision of a Florida licensed pharmacist with an immunization registry to immunize patients
BILLS THAT ARE NOW LAW HB 1049
Florida Pharmacy Act and rules adopted thereunder do not prohibit a veterinarian from administering a compounded drug to a or to the patient's owner or caretaker
Requires that each contract or contract renewal between a pharmacy benefits manager and a pharmacy require the pharmacy benefits manager to periodically update the maximum allowable cost pricing information
Requires procedures to eliminate or modify certain drugs from the list of those subject to maximum allowable cost pricing
OTHER THINGS TO KNOW…
Medical Marijuana Low THC Status 2016 Statewide Referendum
Managed Care Issues Network Closures Potential Revisions During 2016
Legislature