Month: April 2018

Most pharmacists by now are at least aware of EQuIPP scores. These metrics can be used to guide pharmacies looking to improve quality in specific areas as well as their use as a part of the basis for reimbursement from payers. The Top 20% value for a given quality measure was never intended by its creators to be used as a basis for reimbursement. It has always been intended as a motivator for pharmacies to see where the top performers are at. But this did not stop almost every payer in the industry from using it as the basis for most of their performance payments. Virtually every Medicare Part D plan with a DIR fee has attached performance payments to a pharmacy achieving top 20% status in given metrics.

As this blog predicted would happen, the Top 20% watermark for every current EQuIPP quality measure has also become more and more compressed. Pharmacies have been working hard on their practices to improve their quality and by extension their metrics. As a result, individual EQuIPP score required to break into the top 20% have consistently increased with time. Currently, for one plan, a pharmacy has to have over 95% of its patients being compliant for each measure to gain entrance into the top 20% club and, by extension, receive top performance rewards. The compression of this value ultimately undermines the entire validity of the EQuIPP metrics. It has created a watermark that is rapidly becoming all but unobtainable.  

For example, consider a pharmacy with > 90% of their patients meeting the compliance scores. This is score well above the 5-star watermark for Medicare. A few years ago this result would have found them included in the top 20%. Today they would be on the outside looking in. In fact, once a pharmacy has increased patient compliance to greater than 90%, there is less and less a pharmacy can effectively do to further increase their performance measures. They have reached a point of diminishing returns. Reaching the top 20% essentially becomes a lottery, with the natural randomness of patient behavior impacting the pharmacy’s score more than the work being done by the pharmacy. Our own pharmacies regularly spent months at a time in the top 20% over the last several years. Today our scores are even higher than they were and yet we bounce in and out of the top 20% by a few tenths or hundredths of a precent every reporting period.

Ultimately, metrics are not going to disappear. They have their place both as a basis for reimbursement as well as motivation for the participants. But the current measures being used have significant limitations. I see little reason for EQuIPP to continue to report a top 20% value. It was never intended as a metric upon which to base reimbursement. It is rapidly becoming a meaningless, unreachable goal. A more meaningful value to report might be a the mean pharmacy performance for plan.

If the EQuIPP measures stopped reporting the top 20% values for individual metrics today, payers would continue to base performance payments on arbitrarily high compliance requirements. The reason, in large part, is that the measures are only surrogate values being used to estimate quality. They do nothing to directly measure patient care and therapeutic outcomes. It is essentially impossible to quantify how much or little a pharmacy achieving a given EQuIPP score actually saved the health system. In order to really impact quality, metrics will need to mature significantly.

Ultimately, it will require a more direct measurement of outcomes. This will better demonstrate the value that an outstanding pharmacy provides to the health system. An example of a such a measure would be total health spend. One commercial insurer based quality program we participate in calcualtes anticipated healthcare spend for each patient based on actuarial and historical data. The pharmacy is then measured by their ability to impact this number.  If a pharmacy comes in under-budget with respect to its patients’ health care spend it has credible evidence of savings created for the payer. Any savings a pharmacy can create can be, in part, shared with the pharmacy as a performance bonus. A win-win.

Metrics are important. But while they obviously will have financial reimbursement implications in a pay for performance healthcare system, metrics ultimately should be about improving patient care. The best metrics move beyond simplistic measurements like medication compliance and look at the patient as a whole. The best metrics may not even focus on a given plan or population of patients, but instead on the provider as a whole. We have a long way to go before metrics develop this level of robustness. So until then, make every encounter with your patients count. Reimbursement will eventually depend on it.

 

On April 10, PCMA posted INDEPENDENT DRUGSTORE LOBBY AGENDA RAISES GOVERNMENT COSTS, INCREASES DEFICIT on their website. This post appears to correspond with significant backlash being seen by the Pharmacy Benefit Manager industry in several states around the country. PCMA is an industry group for the PBM industry, and the post is a great example of propaganda designed to detract legislators and other decision makers from the real issues that are being brought forth in this country. I wanted to address each of their points here [emphasis is theirs].

Destabilizing Medicare Part D by Imposing Expensive New Mandates: Proposals to require point-of-sale payment of pharmacy price concessions would increase drugstore profits, raise premiums for beneficiaries and increase costs for taxpayers. An analysis by Milliman on direct and indirect remuneration (DIR) in Medicare found that from 2017 through 2026, DIR is projected to save $308.2 billion, and reduce beneficiary premiums by $48.7 billion.The Centers for Medicare & Medicaid Services (CMS) recently found that requiring plans to apply pharmacy price concessions at point of sale would increase government costs by $16.6 billion over 10 years, and increase beneficiary premiums by $5.7 billion. CMS did not impose the mandate in its final Part D rule.

This statement contains two different issues lumped together. Let us address them one at a time

• PCMA is against making PBMs adjudicate claims accurately at the point of sale claiming that it will increase costs. But the timing of the DIR fee (at the point of sale or one to three months later, does not have to have any impact the amount for the DIR.  PCMA might argue that the tying of performance measures to DIR fees necessitates a delayed calculation. But in truth the same thing can occur by using the currently posted scores for the current claims. The savings would not be changed by doing this. Simply stated, there is absolutely no excuse that a company that is paid to administrate millions of claims for Medicare to not be able to give the pharmacy a transparent adjudicated price including any DIR at the point of sale. The current implementation, with DIR calculated and collected well after the medication has been dispensed makes the fees non-transparent to both the pharmacy and Medicare. In essence, PCMA is arguing that non-transparent DIR transactions are better. But who stands to benefit from non-transparent DIR fees? Only the PBMs could possibly benefit.
• PCMA  then goes on to cite a report that predicts that DIR fess will save Medicare Money. But  DIR fees have been in use for several years already. So why are they not citing actual savings? Perhaps they are not that compelling?

The next statement PCMA makes is this:

Eliminating Lower-Cost Popular Preferred Pharmacy Plans in Medicare: Proposed mandates would increase spending by $21 billion over 10 years, according to research from The Moran Company. The Federal Trade Commission (FTC) wrote a letter to CMS warning that: “Requiring prescription drug plans to contract with any willing pharmacy would reduce the ability of plans to obtain price discounts based on the prospect of increased patient volume and thus impair the ability of prescription drug plans to negotiate the best prices with pharmacies.”Medicare Part D enrollees overwhelmingly favor drug plans featuring lower-cost pharmacies. According to CMS, 99.9% of Part D enrollees are in these plans.

This statement is based in part on the assumption that any given national pharmacy chain is willing to sacrifice profit in order to drive pharmacy customers into its stores. By excluding the chain’s competitors in order to obtain the contract, the PBM can coerce further discounts from the pharmacy chain. All of this is unfortunately true, but PCMA is once again misdirecting us. Pharmacy reimbursements are already exceedingly low across the board for both preferred and non-preferred pharmacies alike. Pharmacies regularly average only a few dollars profit for a prescription. One can therefore argue that the difference to Medicare given an any willing provider provision would only modestly impact savings. This brings us back to motive: the elephant in the room. MAC prices. PCMA goes on to state:

Increasing Generic Medication Costs by Gutting the Use of Maximum Allowable Cost (MAC) lists: Legislation would undermine Maximum Allowable Cost (MAC) lists, which are a key cost-savings tool that ensures payers aren’t overpaying pharmacies for generic drugs. Forty-five state Medicaid programs, as well as virtually all Medicare Part D and commercial insurance plans, use MAC lists to reduce costs. The Health and Human Services Office of Inspector General (OIG) touted “the significant value MAC programs have in containing Medicaid drug costs.” The OIG also recommended that states strengthen MAC programs, not weaken them. A white paper authored by a former special counsel at the FTC notes that “legislative or regulatory measures that limit, restrict, or interfere with MACs are likely to have several unintended adverse consequences,” including higher prices and tacit collusion among pharmacies.

I want to thank PCMA for putting this one last. This is the motive we have been waiting for, and it is a really great way to emphasize the distortion that PCMA is using in their document. Mac lists are being touted by PCMA as a tool to save money, but in truth MAC lists are the bread and butter of the profitability of the PBM industry. Any threat to make these more transparent , or in their words to gut them, jeopardizes the PBMs bottom line.

PCMA would like you to believe that the PBMs regularly have to overpay for generic drugs. But unlike 10 years ago when MAC lists were only used on a handful of common generics, today almost every generic available is on a MAC list. And the PBMs completely control these lists, often paying pharmacies less than it costs the pharmacy to buy the drugs being dispensed. Coupled with a preferred pharmacy contract, the PBM has additional leverage to further lower the MAC  they pay preferred pharmacies.

But while MAC prices certainly can be linked to savings, previous analysis done here by the Thriving Pharmacist using Medicare’s own numbers show that these savings are not all being passed back to Medicare. The truth is that PBMs actually use multiple MAC lists. One list to pay pharmacies, and one to charge the payers for what they pharmacies dispensed. By paying pharmacies from one list and turning around and charging the payer more for the same product, PBMs have become extremely profitable. And recent hearings at the state level have shown that the PBMs can make more money on a prescription than the pharmacy that dispensed the drug and cared for the patient. What PCMA is concerned with is that increased transparency of MAC lists would hinder the profitability of the PBMs themselves.

As I have mentioned already, PCMA is a an organization representing the Pharmacy Benefit Manager industry. Everything they say needs to be considered biased toward its own members. The PBM industry has become a multi-billion dollar per year profit powerhouse yet PBMs are still just a middle-man in the health care industry. Now is the time for our legislators and elected officials to really scrutinize both the business practices and consolidation of the PBM industry continues to occur. They need to make this encounter count because if they don’t there may not be anything left to fix.

Today in Des Moines, the House Government Oversight Committee held a hearing looking into PBMs and the high prescription drugs. Several pharmacies and a national PBM were requested to appear. Our own Randy McDonough was one of those asked to speak.

You can view the committee meeting on Facebook (search for JohnForbes4Iowa). The direct link to the video, which does not require login to Facebook, is available here.

What is interesting to me are the items the the PBM avoided answering. Their silence speaks volumes. Perhaps they would rather not address some things and hope people forget the questions. Now is the time to rally other states and our federal legislators as well. Pharmacists provide care. We need to fight to be paid for that care.

In a April 6 article, The Columbus Dispatch is reporting that a national PBM CVS Caremark is again in how water for what it pays pharmacies compared to what it charges the payer. The interesting aspect of this article is that it appears to pit CVS Caremark against Aetna, a company that CVS is attempting to purchase. Read the entire article here.