Month: March 2018

Just in time for your Easter reading pleasure, this freshly posted article from Business Insider offers a great summary of recent PBM media coverage. Follow this link to read more.

In January, a PBM made headlines when it started aggressively dropping pharmacy reimbursements in several states. Arkansas pharmacists were among the first to recognize the problem and organize a response. Iowa pharmacists followed when they too observed the significant drop in reimbursement. The Iowa Pharmacist Association and state legislators immediately went to work. Shortly thereafter, the PBM promised to review their new prices.

But the promised changes were not going to be retroactive. That meant that we had to observe data for several more weeks in order to get an idea of the scope and significance of any changes. Today we have updated data and we can make some general assessments about the adjustment the PBM made in Iowa.

The measure we are using to follow the MAC price adjustments is percent of claims processed under cost. These are sometimes referred to as underwater claims. While many pharmacists will maintain that no claims should ever be reimbursed below cost, this is an unreasonable expectation. Not every pharmacy has access to the same purchasing sources, nor do they have identical purchase volumes. So underwater claims will always exist. The number of underwater claims, however, should always be low. Very low. This is because overall margins in today’s healthcare environment are extremely tight; even a few significant underwater claims can quickly overwhelm a provier’s financial viability.

Without further delay, let’s look at the data.

The graph shows the percentage of underwater claims for two stores.  Store 1 (in blue) has a higher overall prescription volume and also adjudicates more claims with the PBM in question than does store 2 (orange).  It is important to note that while it may appear that the lower volume store (store 2 in orange) may have been impacted less by the increase in underwater claims, low volume stores often have higher expenses per prescription dispensed. For this reason, store 2 may actually have a higher chance to feel the impact of the sharp increase in underwater claims than does store 1 .

Several observations can be made from this graphic.

• Not all stores are impacted identically when a price structure changes is made by a PBM. Prescription mix will play into how much impact a given pharmacy may experience.
• Before the current problem with the PBM arose, underwater reimbursement for claims processed with the PBM were averaging less than 1% of claims adjudicated (0.72% between the two stores). Dates on the graph representing this period are the weeks of 12/9/17 to 1/13/18
• A large spike in underwater claims occurred around the week of 1/20/2018. Underwater claims spiked to to between 15 and 25% of adjudicated claims This represented an increase of 3000%.
• Around mid-March reimbursement problems abated, with underwater claims settling between 3-5%

At first glance, it would appear that this was a victory for pharmacies in the State of  Iowa. Pharmacies, legislators and the Iowa Pharmacy Association put pressure on the PBM which resulted in a correction being made.  While it is easy to get excited about success, it is important to note that after the correction, the percentage of underwater claims was still roughly 300% higher than before the incident. For smaller pharmacies with higher expense/rx ratios, the updated prices may still represent a significant financial burden. Additionally, the PBM, by not making these changes retroactive, have legally kept millions of dollars due to the pharmacies.

In other words, this is a hollow victory.  While I understand that there will always be underwater claims, they should not represent even 1% of claims. The PBM industry is very profitable despite adding little or no real value in terms of patient care. It is not unreasonable to expect the PBM industry to have excellent and fair reimbursement for every drug in every market. That is what they are supposed to be doing. Instead. they continue to leverage their non-transparent, anti-competitive tactics to extract profits for themselves from the healthcare industry.

Despite getting the PBM to make a correction, the facts is that any PBM can arbitrarily manipulate reimbursement without any notice, due process, or regard to the damage the change could cause. Pharmacy as a profession cannot become complacent simply because they win a few minor battles with PBMs. We need to continue to pressure state and federal legislators to regulate the PBM industry. Pharmacies need to make each encounter with their legislators count just as they do when caring for their patients.

The various disciplines in healthcare are constantly evaluating risks. Every therapy decision, from a complex surgical procedure to the treatment of a disease with medications, is associated with some measurable risk that has to be weighed against the benefit to the patient. More and more, risk is also associated with provider reimbursement. Institutions and practitioners alike are at risk of  reductions in payments for their service if their patients do not meet performance goals. This change in the healthcare landscape, often referred to as pay for performance, has created  an interesting and challenging game board upon which the healthcare campaign takes place.

There are many of examples of provider performance penalties in healthcare. A hospital or physician’s reimbursements may be impacted when too many of their patients are re-admitted to the hospitals shortly after discharge, or a pharmacy might be penalized if they have too many patients non-compliant with certain therapies. In theory, linking provider payments to performance and outcomes seems logical. The problem is that no practitioner is an island, and many of the measures being used depend on numerous variables outside their control.

There are countless examples of inter-dependent care that make many performance based penalties a country-wide legal lottery system for healthcare providers. One practice may be surrounded by healthcare colleagues invested in working together, resulting in good scores and performance rewards for all involved. Other practices, despite wanting to positively impact outcomes, might be surrounded by other providers that are not invested in collaboration, and  as a result receive some or all of these providers receive poorer scores and reduced or zero performance payments. To make matters more complicated, the metrics being used across practitioners do not align, which does not help foster collaboration.

This is a difficult position for pharmacy. Pharmacists generally cannot make changes to prescriptions without involving the prescriber. And while they generally have great relationship with their patients, pharmacists can only go so far in coaching or working to modify patients’ behavior in metrics like compliance. For this reason, some pharmacy owners have elected to ignore performance measures. Others have elected to sell their stores. This stakes are that high.

When faced with risk, pharmacists need to become aggressive. This is the time to transform your practice. Write and send quality clinical notes to the patients’ providers. While  you may not get positive responses right away, with time these efforts will allow you to reduce your risk of being left behind. Start now. Make Every Encounter Count.

Over the years, I have necessarily had to learn a great deal about insurance. The necessity is born both from having to give guidance to my patients  who are trying to navigate this complicated topic as well as making sure my business is positioned properly to survive. One type of plan that often causes mis-understandings are the Medicare Advantage plans (sometimes called Medicare Part C). These plans privatize the Medicare part B benefit, often rolling  other benefits into the plan including a prescription drug plan like Medicare Part D at a lower cost to the patient.

These plans can be very attractive to certain patients eligible for Medicare, and these plans do offer some interesting benefits. But I have always been a little wary of these plans. If something seems too good to be true, then there probably is something being left out or not explicitly advertised. I always caution my patients considering these plans to research their decision well before signing up.

As it turns out, these plans may very well be gaming the Medicare system. In a recent report from Morningstar, insurers offering these plans are intentionally shuffling patients between plans in order to maximize performance incentives offered by Medicare. Read more about this practice, called crosswalking by following this link.

Greed — for lack of a better word — is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms — greed for life, for money, for love, knowledge — has marked the upward surge of mankind.

— Gordon Gekko (played by Michael Douglas) in movie Wall Street

From time to time our pharmacy receives an order for Vitamin K tablets to treat a patient with a high INR (International Normalized Ratio). This is an urgent care drug: Vitamin K reverses the anti-clotting action of warfarin. Any delay in treatment can be very dangerous. Currently, only one oral Vitamin K product– Mephyton 5 mg tablets–is available to treat patients who have ventured into high or very high INR values while taking warfarin. This product costs about $56 per tablet. The product’s price has increased dramatically over the past several years, reportedly from about $9/tablet to the current $56/tablet.

Despite being an acute or urgent care drug, Mephyton is not kept in stock at some pharmacies. In my area, none of the independent or chain stores stock it. This means that there could be difficulty and delay in getting the medication to a patient in need.

Every pharmacy has tens of thousands of dollars of insulin in their refrigerator and hundreds of thousands of dollars on their shelf at any given time. Cost alone is not the reason the medication is not being stocked. While many medications are expensive, they don’t remain on the shelves for long—the inventory regularly is sold and replaced with fresh stock. In contrast, Mephyton is a much slower moving item. Our pharmacy, for example, has dispensed 26 Mephyton tablets in the last five years. The product is only available as a package of 100 tablets, and that means a single bottle would last 5 years or until it expires, whichever comes first.

It is not unreasonable to ask why the manufacturer only offers this medication in bottles of 100 tablets. A typical pharmacy would not use 100 tablets over the course of several years. I do not know the answer to the question, but one would have to speculate that greed, in the form of profit, is a motivation.

I won’t complain about the cost per dose of this medication: we started by stating that greed is good. The nature of this medication, which is only use for short term acute therapy in a few patients, is a reasonable justification for its current price point. Here, greed is about being able to maintain a niche drug in the marketplace. But I would add the Thriving Pharmacist’s corollary to Mr. Gekko’s statement: good greed is balanced greed.

Here, we need something to balance out the greed for profits. Something to balance the high cost of the medication with the best interest of the patient and their providers. The practice of selling the product only in bottles of 100 misses the mark.  It has the potential to jeopardize patient safety and reduce access to this life-saving medication.

Each pharmacy has their own way of dealing with this greed imbalance. One local chain pharmacy, for example, has a regional central fill location where they have product in stock. Using this strategy they only need to maintain a single bottle to support dozens of their regional pharmacies. This is an imperfect solution as there may be significant delay getting the medication to the patient. In our case, we have moved away from using the tablets as our source for Vitamin K. We ask the prescriber to write for the injectable form of the medication to be administered orally. The injectable is no less expensive, but it is available in packages of 10 units. In this way, we are able to stock the medication and simultaneously minimize the risk of expiration or dead stock.

Pharmacies work hard to care for their patients. We are greedy—we have a greed for care. That sometimes means finding ways to counter unbalanced greed. Sometimes the cure is a greed of innovation and creativity. The greed for care. Greed, yet another way pharmacists can Make Every Encounter Count!

One of the more exciting collaborations happening in our pharmacy is the opportunity to coordinate with a commercial healthcare insurance company,  managing our mutual patients with the goal of improving therapy outcomes and reducing overall healthcare costs. The insurance company has provided us with new tools, giving us access to some of the detailed statistics they collect. The insurer is also very interested in several disease states. The insurer provides us specific patients they believe would benefit from additional workups. One of the targets is to identify patients that would benefit from initiation of a medium or high-intensity statin.

We have been working on this project for quite some time and have succeeded in initiating statin therapy in numerous patients were it would be beneficial. We identified these patients both using our own data as well as the information the insurance company provides us. Recently we encountered an examples of information in the health record kept by the insurance company that reminds us that we need to critically evaluate all information we receive, no matter it’s origin.

In this example of Tales from the Counter, we look at a patient the commercial insurer forwarded to us as a potential candidate for the initiation of statin therapy. Our patient is a 53 year-old female taking lisinopril / hydrochlorothiazide for essential hypertension. She reports she previously tried a statin, but was unsure when/why it was stopped. She denies a present medical history of diabetes or smoking.