Skip to main content Back to Top

ASHP Requests for Improvements to Pharmacy Residency Program Oversight

U.S. Centers for Medicare & Medicaid Services

June 13, 2019

Seema Verma
U.S. Centers for Medicare & Medicaid Services
7500 Security Blvd.
Baltimore, MD 21244

RE: Improving Pharmacy Residency Program Oversight.

Dear Administrator Verma,

It has come to ASHP’s attention that a number of recent audits of pharmacy residency programs have resulted in significant cost disallowances, some over a number of years and in amounts that threaten program viability. Many of these cases involve arbitrary and inconsistent application of cost-reporting requirements as well as substandard and poorly organized audit processes.

To remedy the problem, we request that Centers for Medicare & Medicaid Services (CMS) cease disallowances until program technical assistance (TA) has been provided and audit processes have been standardized. Specifically, we ask that the agency strengthen auditor training and provide TA specific to pharmacy residency programs, including a comprehensive overview of what CMS deems to be optimal cost accounting processes and procedures.

ASHP has received troubling communications from a number of programs undergoing audit this year. Programs noted arbitrary and inconsistent cost disallowances on the basis of cost accounting procedures that had been acceptable in previous years and to different auditors. Programs were cited for violating cost accounting standards that are subjective at best. Specifically, on the basis of the “direct control” requirement (42 C.F.R. §413.85), Medicare Administrative Contractors (MACs) disallowed costs on the basis of everything from off-site rotations (a staple of residency programs) to the name on a program’s diploma or certificate. Based on these audit findings, it appears CMS has very specific interpretations for residency program compliance but has failed to communicate those standards to residency programs through guidance or TA. As a result, pharmacy residency programs are effectively left to crowdsource best practices among themselves and hope CMS agrees with their methods — or face stiff financial penalties.

Programs also reported disorganized and unprepared auditors. Regarding audit protocols and procedures, programs noted that audits were conducted arbitrarily, with no clear timelines, and that document requests varied from auditor to auditor and by MAC region. In some instances, rather than requesting a set of documents at the outset, which would allow programs to prepare efficiently and effectively, auditors requested new documents on a daily basis with very short turnaround times (24-48 hours). This approach was unnecessarily disruptive, needlessly stressful, and inefficient for program directors and staff, consuming hours that could have been devoted to residents. Moreover, some auditors appeared unprepared, questioning basic tenets of residency programs, such as why tuition is not charged. Because audits are generally collaborative, programs anticipate the need to provide limited auditor education, but auditors should be equipped with a reasonable baseline knowledge of the programs they are reviewing.

Pharmacy residency programs feed a vital patient care pipeline. Damaging them will threaten care quality, patient access, and established interprofessional care delivery models. ASHP accredits pharmacy residency programs, ensuring they meet the highest competency standards. Due to scientific advancements and the evolution of care delivery models, pharmacy residencies are now essential to performing certain patient care services. In fact, residencies are prerequisites for positions within specialties such as solid organ transplantation, clinical pharmacogenomics, psychiatry, infectious diseases, critical care, cardiology, oncology, and pediatrics, among others.

At present, there are 1,328 PGY1 programs eligible for CMS pass-through funding. In 2018, three-quarters of the jobs filled by PGY1 program graduates required PGY1 training — that amounts to 3,500 positions annually. Almost 1,300 of these PGY1 graduates go on to PGY2 positions in a variety of specialized practice areas. Any decrease or weakening of pharmacy residency programs risks severely limiting the number of pharmacists available to fill positions, resulting in provider shortages and curtailing patient access to care.

Pharmacy residency programs want to comply with CMS standards, but they simply cannot without knowing what those standards are. CMS has not provided residency programs with guidance regarding its interpretations of program requirements, nor has it offered any tools for compliance success. Further, CMS has failed to standardize audit protocols and procedures. At minimum, auditors should arrive with basic knowledge of residency program operations and clearly communicate timeline and documentation expectations to program directors at the beginning of the audit. Until CMS remedies the foregoing concerns, we request that CMS suspend all cost disallowances related to this issue.

ASHP would welcome an opportunity to discuss this in greater detail with CMS and to assist CMS in providing meaningful TA to residency programs. We look forward to working with CMS to enhance pharmacy residency training programs and improve patient care. Please direct any questions or requests for information to Jillanne Schulte Wall, Director of Federal Regulatory Affairs, at [email protected] or (301) 664-8698.



Tom Kraus
VP, Government Relations