Inmar Intelligence | April 28, 2016

Pharmacist Organizing Medications in Pharmacy

The shift in healthcare from the fee-for-service business model to value based reimbursement is being implemented in pharmacy in 2016, and will continue to evolve. Retail pharmacies face significant implications as a result of this shift.

There are different contracting models for Medicare, HIX/Marketplace plans, Medicaid. CMS is adding new measures and adjusting thresholds on others. Plans are responding by aligning formularies, clinical strategies, network contracts, and promotions with Star Ratings measures; and by moving towards pay for performance and narrowing their preferred networks based on quality and value criteria. It can be overwhelming… and there is still much evolution to come.

In a fee-for-service model, calculating pharmacy revenue is relatively simple. In 2016, there are five flavors of value based/quality contracting: "Pure Incentive"- payout based on achieving measures; "Pay In and Earn Back"- an upfront fee per claim is paid with the ability to earn back funds; "DIR Penalty Scale"- claim deductions are based on performance; "Heavy Weighting to High Risk Medications" modifier - the % of HRM impacts the per claim fee; and "Weighted Averages plus MTM" modifier - fee is based on ranked averages of specified adherence metrics combined with MTM participation volume.

The average retail pharmacy has $50,000-$100,000 in reimbursements at risk in 2016 for quality, and this will continue to grow. What should retail pharmacies do?

Determine status, goals and investment. Pharmacies should measure themselves and identify opportunities through: Internal solutions, EQUIPP and contract management solutions; applying pharmacy level benchmarking within their chain and the industry overall. They should accurately forecast DIR and account for it as a sales adjustment, quantify the financial value of improvement to justify investment, and evaluate solutions and their successes against their investment ability, considering some programs are offered in coordination with the plans, some are funded by pharmaceutical manufacturers and/or plans, and that patient engagement will increase front store sales.

Align patient needs with appropriate solutions and demonstrate success to the plans. Pharmacies must experiment with solutions. Start low-tech and evolve as needs and success grows: Refill reminders / automated refill solutions like IVR, e-mail, mobile apps, etc.; Med Sync, MTM in-house or through partners; proactive phone outreach; promotional programs, Rx coupons, medication assistance to help with the cost of care; telemedicine appointments or in-person in the pharmacy. They should communicate with plan partners routinely; prepare in advance by understanding contract responsibilities and goals, developing a plan to reach patients/members with opportunities, and understanding current performance and areas where opportunity for improvement lies; and discuss with them how patient-facing staff will address opportunities and how they are aware their performance.

Do you have the tools in place to know where you are today? Inmar's Contract Management solution can help you be more successful in value-based reimbursement through measuring quality at the contract level, forecasting DIR fees, modeling the financial upsides and downsides of different scenarios, and pinpointing which patients need what services. Do you have additional suggestions for helping retail pharmacies mitigate their reimbursement risk? Share them with me in the comments section​ below.​

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Holly Pavlika
SVP, Corporate Marketing
(336) 770-3596