It should come as no surprise to anyone active in pharmacy that CMS has started to emphasize quality and performance as a part of the metrics being used to grade pharmacies Pharmacy Benefit Managers (PBMs). The mechanism for this evaluation are the Star Ratings, and these the pharmacy specific metrics are subdivided into several disease specific measures. Pharmacies receive scores for each measure, and the Medicare Part D Prescription Drug Plans (PDPs) are scored by CMS based on their own measures along with an aggregate of the pharmacy specific performance numbers for all of their network pharmacies. The metrics are collected and calculated by PQS (Pharmacy Quality Solutions) thru the EQuIPP platform.
Pay for Performance
Recently, 2014 performance reports have begun to emerge, and pharmacies are starting to see the fruits of their quality oriented labor. The harvest, however, appears to be a little disappointing. Below represents the report and payment made by a Medicare Part D PDP (Prescription Drug Plan) to a medium size independent pharmacy*.
Description
The pharmacy represented above is fairly successful with respect to the performance measures. The Medicare Part D plan in this report likely represents only a small fraction of the pharmacy’s Medicare Part D patient population (likely less than a few hundred patients in total). The adherence (prescription drug compliance or PDC) measures for the first two measures (ACE / ARB / DRI and Statins) are well above the 5 star goals, and represent a small subset of the pharmacy’s patient population (around 40-50 patients each). The other two EQuIPP measures represent a very small population of patients (15-16 patients), and a single patient can dramatically affect the pharmacy’s scores (consider that with so few data points, a single patient can raise or lower a score by almost 7%). There does not appear to be any weighting of performance pay based on this type of bias, which is out of the control of the pharmacy.
Another notable observation is that a high performing pharmacy can be paid a premium for very high results. The first two measures show a payment rate of 125% (a 25% premium) for exceeding the 5 star goal. The performance scale extends from 125% down to 0% based on performance. There is not a clear indication where the break in reimbursement levels are being made.
By the Numbers
Some interesting details of the “pay for performance” model being used by this plan emerge from this from this table.
- The total amount of performance incentives available to this pharmacy for 2014 (the entire year) was $1190. (this assumes a 25% premium is available for all measures and the pharmacy exceeds all goals significantly.
- The pharmacy serves between 51 and 109 Star Measure Medication patients that are enrolled with this plan. (it is difficult to know how many patients are represented in more than one category)
- 15% of performance pay was assigned to non-star ratings (non-EQuIPP) measures. These include 90-day fill rate and Generic Dispensing Rate.
- For EQuIPP Measures, performance incentives average $5.63 per patient per year
- By patient, incentive payments work out to be below $6 to about $20 per patient per year (depending on the number of patients that fall into more than one category).
- Payments made for
Medication Therapy Management (MTM)Stars Intervention** are being counted as payment already received by the pharmacy
Discussion
The amount being paid for outstanding pharmacy performance by this plan is anemic. For each patient falling into a star-ratings category, pharmacy has the potential to increase revenue by a maximum of $20 per year. In order to maximize this incentive, a pharmacy is going to have to spend money on programs to improve outcomes. Programs like Med Sync and compliance packaging all have significant overhead, and the potential incentives do little to ensure a pharmacy will maintain a positive margin for improving quality.
The use of non-equip measures for 15% of performance incentives is a troubling trend. Remember, it is the patient, not the pharmacy or the PBM, that ultimately should have the choice of a 90-day fill. Many patient prefer regular visits to their pharmacy. While some research supports the thought that 90-day refills increase patient compliance, these studies rely on claims data, making the assumption that actual compliance is directly related the patient having possession of the medication. In truth, leveraging 90-day fills removes only one potential obstacle to adherence, a trip to the pharmacy, while numerous other possible reasons for non-compliance remain. One drawback of 90 day supplies is that compliance issues take longer to recognize. With 30 day refills, the pharmacy can address issues of compliance with the patient within the first 30 to 45 days of therapy, whereas issues with a 90 day supply will not start to become evident for close to 4 months, well after the patient has poor compliance developed habits.
Extended-day supplies have other consequences to both patients and pharmacies. Patients who receive 90 days supplies are offered savings thru discounted co-pays. The incentive available to the pharmacy for a high 90 day fill percent (with the above example, achieving more than 25% of star-rating drugs dispensed as 90 day supplies) is $152 per year. A typical 90-day pharmacy contract offers a $0 dispensing fee to the pharmacy while the 30 day dispensing fee paid to a pharmacy is typically no less than $0.50 per Rx If the pharmacy moves from 4% up to 25% 90-day supply fill rate, the pharmacy would be forfeiting $200 dollars in dispensing fees in exchange for only $152 in incentive payments. In this case, a pharmacy failing to make the “grade” on 90-day fill rate is actually better off, and the patient retains their choice of 30 or 90 day fills.***
Another troubling trend is the deduction the plan makes for payments received by the pharmacy for Mirixa (Medication Therapy Management or MTM) adherence related cases. The plan is essentially creating a ceiling on the total amount a pharmacy can receive for its work. This ceiling includes both incentives and any money available for MTM adherence related case payments. The pharmacy represented in the report above completed 100% of the adherence related Mirixa cases assigned to it in 2014 and received $310 for their work. A typical MTM work-up takes 30 to 60 minutes of pharmacist time, and the effective reimbursement rate is poor, even for a highly efficient pharmacy. The deduction of the Mirixa payments flies in opposition to the quality metrics supposedly being rewarded by this system. By this method, pharmacies with a large number of MTM adherence related patients cases have the potential reach their incentive ceiling entirely by completing MTM these cases. This pharmacy would then receive little to no additional quality bonus dollars for maintaining exceptional EQuIPP scores. It is unclear if these pharmacy would actually have to pay money back to the plan if their MTM adherence related case payments exceeded their “maximum” quality payment.
The problem with using a star ratings system (like EQuIPP) it that it only indirectly measures quality. Compliance can be artificially elevated without actually modifying a patient’s adherence simply by enrolling patients in a Med Sync program or leveraging automatic refills. Claims data will trend towards improved adherence with these programs, but is the patient actually taking the medication? Ultimately, the quality measures will have to evolve to include metrics that better reflect the value pharmacists can contribute to the system. Right now, the quality measures are better suited to drive patients to large, robotic mail order pharmacies that can show outstanding PDC values based solely on claims data. Pharmacists offer considerably more to the patient than an indirect measure of adherence, and the measures should emphasize the strengths of pharmacists, and focus less on product.
Conclusions
This is just a first example of how plans are trying to incentivize pharmacies to emphasize quality. Many pharmacies are taking this challenge seriously, spending significant amounts of resources to improve their scores. The current reward model, however, is in serious need of revision. Without reimbursement on par with the value pharmacist contribute to healthcare, this model will not survive. Only time will tell where we are headed. Until then, pharmacists need to step up to the plate, as it were, and show the patient and the payor that they are capable of improving outcomes. Pharmacists can make a significant contribution to lower total health care costs. We need to get out there and make every encounter with the patient count!
Footnotes
* While this chart represents real data from an actual pharmacy report, it is possible that pharmacies may see different reimbursement based on things like contracts, PSAO affiliations, geographic region etc. This graph is for illustration purposes only.
** Updates are represented by strike thru text and added italic corrections. Updated information was provided by PQS.
*** Updated: The plan here does not have a different rate for 90 day supplies.