Month: August 2016

DIR Fees are not Pay for Performance

The concept of Pay for Performance as it pertains to healthcare is simple: save the system money by performing and receive a financial reward. Fail to perform and you will reap the financial consequences. Some models even require a financial stake from the provider before they are allowed to participate. An entry fee, as it were. The potential rewards, if the provider meets performance goals, should offset or exceed the initial stake.  Some companies are apparently considering the DIR fee as a form of pay for performance. I disagree, and as proof, I offer a couple of examples. If you need a refresher on DIR fees, read DIR Fees–Why are Pharmacies in the Middle?.

CVS Caremark 2016 DIR

This summer, the CVS Caremark DIR fee schedule for 2016 began to become tangible for pharmacies all over the country as DIR fees for the first 4 months of the year were calculated and the DIR fees started to be withheld. For those unfamiliar with the current Caremark DIR program, CVS has tied the DIR fee to pharmacy performance in the EQuIPP measures. They call this a variable rate DIR, with performing pharmacies receiving a discount on the DIR rate.

To be more explicit, these plans take an additional 3% to 5%  back from the pharmacy for every Rx they supply the plan’s patients. A high performing pharmacy has to pay back 3%, a lower performing pharmacy pays back as much as 5%.

Consider my pharmacy. We were in the top 20% of all pharmacies nation wide for the entire first 6 months of 2016. This puts us at the bottom of the variable rate, so we have to give back only 3% of what we were paid by CVS Caremark. This amounts to tens of thousands of dollars taken from sales with an already thin margin allowed by the plan. The reward for being a top performer is to pay the plan less for the privilege of taking care of their patients. This is not a performance reward.

CVS Caremark would undoubtedly counter this statement, stating that they do reward performance through a different program. This program does reward performance, but the size of these rewards is merely a footnote. My pharmacy’s reward for this program was less than $2000 for all of 2015, and we maxed out every clinical category. By way of comparison, the $2000 in performance reward for the entire year is dwarfed by the estimated $60,000 per year in DIR fees for our pharmacy will pay back to CVS / Caremark. For CVS / Caremark, quality and performance, as a priority, do not appear to be in the same league as lowering the price.

Humana 2017 DIR

Recently, Humana revealed its 2017 DIR program. It bears some resemblance to a pay for performance program, but it, too, falls short. Like CVS’s 2016 plans, the 2017 Humana DIR fee is also tied to EQuIPP measures. The Humana DIR concept this: each qualifying prescription (falling in an EQuiPP measure) will be charged a $5 DIR fee. If a pharmacy maintains an EQuIPP score in the top 50% for the matching EQuIPP measure, they will receive $2 back. If the pharmacy maintains an EQuIPP score in the top 20%, they will receive all $5 of the DIR back plus an additional $1 reward.

On the surface, the Humana plan for 2017 is actually a Pay for Performance version of a DIR. Unfortunately, doing the math shows that the DIR is really just a DIR. Like a casino, Human has stacked the odds in its favor. Consider the math:

Let’s look at 1,000,000 qualifying claims — Humana would withhold $5M in DIR fees up front. To simplify the illustration, we will make two assumptions. These assumptions do not impact the actual statistical evaluation over all qualifying prescriptions, EQuIPP measures and pharmacies. Assume…

  • that all pharmacies fill the same number of claims
  • that all pharmacies perform identically for all three EQuIPP criteria

Now because Humana is using a percentile based comparison thru Equip we can state:

  1. 50% of all pharmacies will see $0/claim back (they fell in the lower 50% on all three measures). Based on the assumptions above, this to be half of the claims (500,000 claims)
  2. 30% of pharmacies will receive $2/claim (these pharmacies fell between 50% and 80%) Again, based on the assumptions above, is 30% of claims (300,000 claims), so Humana returns $0.6M ($600,000) back to the pharmacies.
  3. 20% of pharmacies will receive $6/claim. This is 20% of all claims, so Humana gives back $1.2M

In the end, Humana holds $5M and gives back $1.8M. So Humana keeps $3.2M per 1,000,000 claims as shared savings.

Now it is possible that several larger pharmacies could fill a lot of Humana claims and simultaneously and hit the top end on all EQuIPP measures. If this happened, Humana could end up paying out more. If the highest performing pharmacies represented not (as simplified) 20% of claims, but 50% of qualifying claims (this is very unlikely, an extreme example), then the reward paid out would be $3M per million claims. If remaining pharmacies receiving rewards ($2 per claim) represented an equally disproportionate 40% of claims filled for patients, then Humana would pay out $800K per million claims. For those doing the math at home, this leaves the bottom 50% of pharmacies filling only 10% of all qualifying Human claims. Despite this unlikely distribution of reward dollars, Humana is still retaining $1.2M in DIR fees per 1,000,000 claims. Once again, quality and performance take a back seat to price.

So, compared to this year’s CVS Caremark DIR schedule, the 2017 Humana DIR at least resembles a pay to perform format. The reality is this, however: until the Prescription Drug Plans have their own skin in the game with respect to total health spend for these patients, there is no incentive to pay pharmacies for quality. For the PDPs, the formula will remain the same: pushing pharmacy reimbursement lower makes the PDP money. Without significant change from Medicare and corporate America, quality will continue to take a backseat to cost.

Recall the old saying: you get what you pay for. Well today, the PDPs are focused on cost. Cheaper is better. The real question will eventually be asked, can we continue to afford to ignore quality in healthcare?

 

Re-Blog: Pharmaceutical Steering & its Ongoing Impact

I just read an interesting post from iMedicare about the Pharmaceutical Steering. Some of this appears to be the steering patients to preferred pharmacies, but the any willing provider concept is not being applied. In one case mentioned in the article, it may actually be anti-competitive. Other cases may be bait-and-switch tactics, with services being initially free, but charges being added later. It is an interesting read, and if this is really happening, it is could be a violation of one or more federal laws. See iMedicare’s Refill Report blog for the complete text.

Night Shift…

Recently I received an after-hours call from a rehabilitation facility. One of my patients was recovering from surgery and they were out of one of her medications.  Normally, a call like this would be a routine delivery and the story would end here. Instead, this call transformed in my latest adventure in Tales from the Counter.

The trouble began when the prescription was refilled: it was too early according to the plan. Either the patient had an additional supply, or something else changed. A call to the facility confirmed that the patient was now taking 2 tablets a day compared to the one tablet daily the written in the original prescription. As evidence, the facility pointed to the discharge summary the received from the hospital at the time the patient was admitted to their care.

At this point, I had to set my pharmacist hat aside and put on my detective hat. The job now is to track down who made the change, get an updated prescription, and then get a dose-change override from the plan. Not knowing where the change originated, I drafted and sent notes to three different physicians:

  1. The primary care provider
  2. The specialist for the medication
  3. The surgeon discharging the patient from the hospital to the rehabilitation facility

I was fortunate to get quick responses from all three. Incredibly, none of the prescribers acknowledged making the change. The surgeon wanted nothing to do with the change, and the primary care provider deferred to the specialist, who indicated they did not make any changes.

So where did this change come from? It is likely that the change was made erroneously during the hospital admit process. Possible explanations might include the patient relaying incorrect information or the staff member erroneously transcribing the information. Perhaps the patient misunderstood something their specialist or primary care provider told them at a recent appointment and conveyed incorrect information that they understood to be true. There are numerous possibilities, but if this was the origin of the change, the admitting staff recording the medication history did not spend the time necessary to reconcile the profile.

We regularly receive requests from local hospitals for a copy of our patient’s med profile. Our clinical software make is easy to create a list and send it off. Likewise, we request the discharge summaries for our patients whenever available. These help us ensure we are aware of changes before they become an after-hours emergency.

This story happens far too often in today’s health care environment. There are too many silos, with different groups not taking the time to communicate efficiently. In some ways, the current laws regulating health care and privacy are a part of the problem, making providers reluctant to volunteer information to other providers. In other cases, it is politics and money.

In the end, though, it is the patient and their care that counts. Yes, it can be a chore to tie up the loose ends. It took the better part of 5 hours to resolve the problem above, but in the end the patient was returned to the correct dose and the best possible care was given. When opportunity calls, even late at night, be sure to make every encounter count!

Dealing with High Risk Medications–Zolpidem

This week’s tales from the counter deals with the high risk medication Zolpidem. The other day, I received a call from a patient concerned with their copay for zolpidem. The patient’s copay increased to over $90 for a 2 month supply. This was up by 200% compared to the previous refill, and she had concerns about being able to afford this in the long term. The price increase appeared to be a deliberate attempt by the plan to financially pressure the patient away from using the high-risk medication. The approved claim even included an attached note suggesting trazodone as a possible alternative.

This tactic of financial pressure to change the patient’s behavior in interesting. Unfortunately, this pressure is somewhat shortsighted. A real possibility exists for the patient to not switch medications, but instead to switch to a different discount prescription program instead of using their Medicare Part D plan. While such a switch might improve the Medicare Part D plan’s star rating (by removing the medication from their records), such a change would not actually reduce the patient’s risk.

A better way to handle high risk medication is by working directly with the patient. In fact, we had already spent time working with this patient to reduce their use of this high-risk medication. While on the phone with the patient, I read the notes we had created in their electronic chart. Here, there were several interventions regarding this same medication. Most recently, several months ago, one of our pharmacists worked with the patient and the prescriber to try a dose reduction and conversion to a different medication with lower risk. The patient did not tolerate the change, reporting several adverse drug reactions to the new drug, and reverted back to the zolpidem after a few weeks.

The increase in the patient’s copay, however, did allow us another tool to revisit this problem. Using the opportunity this financial tactic presented, we were able once again to approach the patient and attempt another conversion. The patient, like before, was open to the suggestion, and another note was sent to the prescriber.

My point is not to criticize the plan for using a financial incentive to discourage behavior in the patient, but to point out the missed opportunity. Instead of working alone, perhaps the plan would be better off partnering with the network pharmacy providers. If the plan and the pharmacy were on the same page, the potential synergy would be tremendous. Pharmacists could have discussions with the patients on high-risk medications. The patient can be informed of the risks associated with the medication and financial impact continued use will incur. Working together, the patient, the pharmacist, the prescriber and the plan could more easily persuade patients away from using high-risk medications.

The other implication to this collaboration is that there are always going to be some patients that have good justification for their continued use of a high risk medications. With the recent expansion of the Beer’s List of high-risk medications, this is even more pronounced. The plan should also allow the pharmacy to provide documentation justifying continued use of the medication. A patient with justifiable use should not, then, be counted against the plan and pharmacy’s EQuIPP scores.

 

R-E-S-P-E-C-T

Most pharmacists have stories of how the PBMs have overstepped their bounds in the arena of patient care. This blog has documented several examples over the last year, and a recent encounter serves as today’s edition of Tales from the Counter.

One of our patients was started on finasteride 5 mg by their urologist. Later the patient saw his primary care provider complaining of light headedness and dizziness. The primary care doctor changed his therapy and started him on tamsulosin 0.4 mg daily. The patient then went to the pharmacy to have his new prescription filled. The pharmacist immediately identified a duplication of therapy between the drugs and consulted with the patient. The patient related their story of adverse events with finasteride and reported that they were to stop the finasteride and start with the new prescription, tamsulosin. The pharmacists was satisfied with the patient’s response and documented the intervention in the patient’s chart.

Upon attempting to adjudicate the claim with the patient’s insurance, the processing pharmacy benefit manager also identified the duplication of therapy and rejected the claim. A rejected claim typically requires either the pharmacy enter appropriate clarification codes, often called DUR codes, documenting the resolution of the problem, or a phone call giving verbal clarification to the PBM. With this information in place, the claim would then adjudicate.

In this case, however, the PBM did not allow the pharmacy to document and receive the override.  The PBM would not allow the prescription to process without the PBM directly working with the prescriber. The PBM insisted on faxing paperwork for the physician to sign stating that the finasteride was to be discontinued and to ensure the patient would not receive both medications. Once the paperwork was completed and submitted, it would take will take 3-5 business days to complete before the claim would be allowed to adjudicate.

The patient was anxious to get started on the new medication. The pharmacist attempted to force the issue once again. Why wasn’t the pharmacy’s documentation sufficient? The representative informed our pharmacist that they needed to have written confirmation from a licensed healthcare provider that the finasteride is to be discontinued.

Our pharmacist confused. They politely informed the PBM representative that they were, in fact, a licensed healthcare provider. They offered to complete the documentation to certify that the finasteride was discontinued. The PBM representative chuckled and restated that they needed a signature from a licensed healthcare provider. I am not sure, at this point, how well the representative understood the U.S. healthcare system.

I am certain that the PBM representative was just doing their job and following established company policy. The fault lies with the company’s failure to recognize the pharmacist’s legal and ethical responsibility in the day-to-day care of patients. It seems that the PBM believes that they are the entity responsible for caring for the patient. In this case, however, the PBM crossed the line from useful to obstruction.

In this case, the PBM needs to be reminded that pharmacists can and do take responsibility for the care they provide their patients. They deserve respect from the PBMs. Pharmacists are a part of the healthcare team. It is time that this PBM actually joined the team as well.

Ironically, during the same shift, our pharmacist had another patient switching between these exact same drugs. Their insurance used a different benefit manager, and that company did not create any obstructions to patient care.

Re-Blog: The ‘gouge factor’: Big companies want transparency in drug price negotiations

The juggernaut that is the PBM industry continues to write the rules and the providers (pharmacies) and the payor (business and the government) pay the price. Eventually someone has to ask the obvious question: why are PBMs so profitable? The answer is lies in what they don’t tell us.

At least some business are interested in increasing transparency, though, as reported in StatNews.com’s Pharmalot View. For an interesting read, point your browser to The ‘gouge factor’: Big companies want transparency in drug price negotiations.

Whitehouse Petition

Recently, a petition asking the Executive Branch of our government to look at the business practices of Pharmacy Benefit Managers was started on Whitehouse.gov. It is entitled:

CMS NEEDS TO ENSURE TRANSPARENCY IN ITS ROBUST BUSINESS RELATIONSHIP WITH THE LARGE PHARMACY BENEFIT MANAGERS (PBMS)

Three large PBMs manage prescription drug benefits for more than 180 million Americans. PBMs have clients on two sides – pharmacy clients and health plans/payors (Medicare, DoD TRICARE and FEHBP). They also own their own mail order and/or retail pharmacies and that puts them in direct competition with their small pharmacy clients. This leverage incentivizes them not to reimburse their small pharmacy clients in a fair and timely manner – this is not just and Congress needs to support CMS in their efforts to scrutinize these unfair practices.

These petitions generally require 100,000 verified signatures to move forward. Currently, only 2000 persons have signed.

The wording of the petition is somewhat vague, and it could be stronger and more descriptive. Even so, it is a good start. The Thriving Pharmacist would like to see this petition move forward. I realize that we don’t have 98,000 readers, and even if we did, not every single reader will take the time to complete the process. Despite this, I would like to encourage everyone to take the time to consider signing. Better yet, if you agree, help spread the word! Make your voice heard.

Signing a Whitehouse petition is a two step process that requires a valid e-mail. Once you sign, you must respond to the verification e-mail whitehouse.gov sends you in order for your signature to be accepted.

I look forward to seeing many, many more signatures supporting PBM transparency on this petition. Make this encounter count!

Transformative Change (is Hard)

Have you ever seen an informercial late at night? The announcer is so energetic. They work very hard to make you really want their product. Does this sound familiar?

It slices! It dices! You will wonder how you ever got along without it! What would you pay for this time-saving wonder? $99? $59? What if we told you you could have this live-changing tool for the low-low price of $29.98? But wait! What if we double the offer. That’s two for just $29.98! But there’s more. We will throw in the…

The problem the announcer is trying to overcome is one of resistance. Sure, the product looks great. It might even be unique, one-of-a-kind, and indispensable in most every way. It can be all of those things, but most will still not lift their phone to make the call. Change is hard. And the bigger the change, the more the problem of resistance comes into play.

Pharmacy is at a transformative crossroads. The profession is nearing the end of the reimbursement for product road, and the future will necessarily be different. Many believe that the direction the profession is heading will be a healthcare model emphasizing the importance of outcomes, with a true professional fee and shared savings funding the pharmacists efforts instead of reimbursement for the product. A pharmacy model based on patient outcomes is not unprecedented. Many recent studies have shown significant benefits of pharmacists working to ensure therapeutic outcomes in patients. This has the potential to be transformative.  It is also the type of change that can be very difficult .

The resistance to transformative change in pharmacy comes from many different places:

  • Pharmacists not comfortable with making clinical decisions either because the lack training or they have allowed themselves to grow rusty from too little practice.
  • The payor, be it an insurance carrier or a self-insured corporation, is not familiar with the benefits of the possible transformation. They are unwilling to invest in any new model without knowing up front what their return on investment will be.
  • Service vendors, those that provide support to the health care disciplines through software and technology, look at the new models of healthcare emerging and are unsure which models show the most promise.
  • The patient also resists change. Many patients rarely see or speak with a pharmacist regularly. Their expectations of the profession are limited to receiving a small plastic vial filled with medication and adorned with a label containing instructions. Changes in the pharmacists activities that increase a patient’s interaction with a pharmacist are an unexpected change.

But transformative change also excites. Our pharmacies have adopted a transformative pharmacy model. It is a model we believe will eventually meld into the future of pharmacy. We have strived to overcome many of the aforementioned problems. We regularly entertain visitors in our practice. Our visitors have included an amazing spectrum of professionals including other independent and chain pharmacists, pharmacy owners, chain pharmacy managers, health-system pharmacists, local business owners, local, state and national elected representatives, insurance executives, members from academia, and service vendors of every type imaginable. After observing the model we use, everyone is excited. It is just like an informercial. Everyone has a favorable opinion and is interested in what is being done. The excitement is almost infectious. Pharmacists are especially prone to wanting to participate immediately. But in the end, few move to pick up the phone and make the call.

But like the late night infomercial, there will always be some that do decide to get up and make the call. The seeds of change are starting to sprout. The largest insurer in our state saw the potential for this model and invested some time and money to study the impact. The results were very, very positive. Today, they are working to create a new network of high performing pharmacies based on this transformative model. Getting a payor on board helped us get some traction elsewhere.

With a payor on board, the next step is getting more pharmacists and pharmacies to commit. We don’t need every pharmacist and every pharmacy owner to commit to change. We only need a few, and Iowa has many pharmacists and pharmacies that are progressive. Addressing patient resistance is perhaps the simplest to achieve. Open communication with the patient before implementing changes goes a long way toward patient acceptance.

As it turns out, the most difficult challenge has been getting the service vendors to buy into a new model. Some of these vendors believe that their current products are adequate for the new model. Others fail to understand the requirements of the new model. There are software and workflow solutions that have been created to support the pharmacist in this new model, but as of now, they not yet ready for commercialization. Getting these tools to the pharmacists who need them is proving a significant hurdle. Given the slow but steady acceleration of this transformative model, it is inevitable that this last hold-out will also start to move.

Change is hard. Transformative change is even harder. But not changing is ultimately the hardest, because failing to evolve dooms one to extinction. Make the call. Make every encounter count!