Stephen F. Eckel, PharmD, MHA, BCPS, FASHP, FAPhA, FCCP

Health systems offer numerous opportunities for an expanded pharmacist role in integrated care delivery.

Health systems have grown in number and size over the past few years through hospital mergers, acquisition of physician practices, and addition of other ancillary services such as home health care and wellness services. All of this is done with the goal of leveraging these health systems to be the sole responsible party for all of the health care needs of an individual. Because of the breadth and diversity of health systems’ service offerings, which range from high-intensity acute care to a broad range of ambulatory care services, they are well positioned to provide seamless and integrated care delivery, since all services are managed or affiliated under the same organizational structure. Generally, these types of integrated health care delivery networks create an opportunity for pharmacists to develop and foster more inclusive roles across the various settings within the patient care team. These integrated roles align well from both a clinical and financial perspective compared with non-integrated settings if the health systems are able to take advantage of their breadth and lower-cost settings.

Pharmacists take on various roles in the acute care setting, retail pharmacies, ambulatory specialty and primary care clinics, specialty pharmacy services, supply chain management, and transitions of care. In the outpatient setting, pharmacists in many of these roles are delivering patient-centered care through patient assessment; development of pharmacotherapy care plans; monitoring, adjusting, and initiating therapies; and patient education. Due to the lack of recognition of the pharmacist as a health care provider by the Social Security Act (SSA), reimbursement has not adequately compensated ambulatory care pharmacists’ services to date. Pharmacists’ activities in clinics improve quality, reduce medication errors, decrease drug costs, and ensure the rational use of medications. Unfortunately, payment revolves primarily around dispensation of drug products, and pharmacist clinical services are currently not reimbursed at a reasonable level for pharmacists to sustain a robust practice.

Pharmacists should be recognized by the SSA as providers to ensure consistent, adequate reimbursement in the current, although disappearing, fee-for-service model. The establishment of this direct reimbursement through Medicare Part B is a short-term gain. In the long term, it is imperative that pharmacists be fully integrated in all emerging health care delivery models. The SSA currently recognizes physician assistants, nurse practitioners, certified nurse midwives, clinical social workers, clinical psychologists, and registered dietitians/nutrition professionals as “providers or practitioners” in addition to physicians. Pharmacists have yet to be formally recognized, and because of this, they cannot be adequately reimbursed as these other health care professionals are for providing direct patient care and positively affecting health outcomes. There is concern among pharmacists that if they are not recognized now, they will be left out of future health care delivery models. Although provider status is a formal recognition of what health-system pharmacy has known for many years, designation of provider status will finally establish the value of the clinical services and the level of practice that pharmacists can provide.

In addition to more effective and inclusive care team role evolution, provider status recognition in the SSA would provide for a more sustainable business model. This will support pharmacist-provided patient care services in the current feefor- service outpatient setting. Pharmacists are valuable, complementary members of the patient care team in both the acute care and ambulatory care settings, but due to a different reimbursement model for acute care services (diagnosis-related group [DRG] as opposed to fee-for-service), provider status will not likely allow inpatient pharmacists to bill for their patient care services to the extent that may be possible in the ambulatory care setting.

The American Society of Health-System Pharmacists Ambulatory Care Conference and Summit supported the idea that all ambulatory care providers should have the necessary credentialing and undergo organization-based credentialing and privileging processes in order to practice. Credentialing and privileging should follow current practices for medical staff as established by individual institutions, conducting the same peer review and evaluation of their training before initiating their practice. Completion of the process should provide confidence to the organization that the pharmacists can practice at the level required based upon the job expectations. After the health system gains experience with credentialing and privileging of ambulatory care pharmacists, it is highly probable that inpatient practitioners will be expected to undergo credentialing and privileging processes in the future that allow them to demonstrate competence to their organizations.

Establishing a trusted and recognized process for pharmacists could lead to the opportunity to provide a variety of medication decision-making functions. DRG reimbursement is the payment model for inpatient services and prevents direct reimbursement, but new services made possible by expanded privileging of pharmacists will provide value to the organization and patient. With pharmacists operating as providers, physicians and other providers are free to focus specifically on higher-level diagnostic activities, leaving the chronic disease state management to the pharmacist. For example, pharmacists possess the ability to manage the treatment of chronic pain. While in communication with the patient care team, the pharmacist could be responsible for therapy selection, monitoring, and adjustments, allowing the physician to see new patients and be involved in procedures. These are things that non-pharmacist health care providers cannot do if they are spending most of their time managing chronic diseases.

The granting of provider recognition at the federal level does not impact the state-regulated scope of pharmacy practice. Collaborative practice agreements vary widely across states. Health systems will potentially need to work with their state pharmacy association and board of pharmacy to change their respective state laws and regulations regarding collaborative practice agreements and the ability to adjust, initiate, or modify drug therapy; conduct patient assessments; provide disease state management; and assist with coordination of care. Changes such as granting pharmacists independent prescribing authority under certain circumstances will improve patient care through the efficient delivery of pharmacist-provided services. Consider the clinical pharmacist working in a clinic setting who is conducting comprehensive medication management but cannot initiate, modify, or discontinue drug therapy. Even with amendments made to recognize pharmacists as providers under the SSA, the pharmacist would need to contact the supervising prescribing provider to write any prescriptions without regulatory approval from the state pharmacy practice act. This would be an inefficient use of time for the pharmacist, provider, and patient.

The Affordable Care Act and changing reimbursement structures from third-party payers have created other great opportunities for pharmacists to demonstrate their impact and value proposition. As the Centers for Medicare & Medicaid Services levy financial penalties for inappropriate readmission rates, health systems are investing in individuals who can assist in preventing them. Pharmacists can contribute to the health system’s bottom line by consistently executing portions of the transition of care process. The taking of medication histories, medication reconciliation, discharge counseling, and post discharge follow-up are all activities that contribute to the proper management of the patient’s continuum of care. Pharmacists in both the acute and ambulatory care settings can play an important part in preventing readmissions and minimizing the chances for financial penalties due to poor transitions of care.

Pharmacists are playing an ever-increasing role in the transition-of-care process for health-systems. Current incident-to physician transitional care management codes exist for physician- and hospitalbased clinics. Health-system pharmacists can lead efforts to establish processes for successful transitions from inpatient to outpatient settings. Inpatient pharmacists can be critical in systematically identifying patients who would benefit from outpatient services, communicating important drug therapy plans and subsequent care coordination, providing discharge counseling, and ensuring patient access to their prescriptions. Hand-offs between the inpatient and outpatient pharmacists can ensure that patients are on appropriate therapies established during the inpatient stay and are compliant with their medications.

More opportunities for an expanded role for pharmacists in health systems would arise if they were able to directly bill for their patient-care services in all settings. Even though the reimbursement for inpatient services will decrease over the next few years, the opportunity for revenue capture in the outpatient arena still exists. While there is much discussion of payment for quality and outcomes, ambulatory care still remains a predominantly fee-for-service market. Until that changes, pharmacists who are recognized as providers could take advantage of that model and see patients who need their services. Methods for reimbursement in the outpatient setting depend on the clinic type (eg, hospital-based clinic or physician’s private practice), provider, and third-party payer. Hospital-owned outpatient clinics allow hospital-employed pharmacists to generate facility fees which are determined on an institution-specific basis. Professional fees are not allowed to be billed in the outpatient hospital-owned clinic. In physician- based practices, pharmacists may bill in accordance with the “incident to” physician billing using level 1 through 5 Current Procedural Terminology (CPT) code visits.

 Typically, the lowest fee CPT code, the code for a level 1 visit, is chosen for pharmacist services provided to Medicare patients, since there is no recognition within the SSA for the pharmacist as a provider.

 Some pharmacists will bill more for patient care services to third-party payers.

In health systems, some pharmacist roles were originally established based on the premise of capturing discharge and clinic prescription revenue. This led to the establishment and growth of health-system owned and operated retail pharmacies that serve the health-system patients. As systems become self-insured and grow in size, this continues to be an opportunity. However, with the recognition of additional quality and value pharmacists can add for patients, especially for medication management in chronic disease states, the opportunity has arisen for pharmacists to be based in the clinic and separate from dispensing. The inability of pharmacists to generate revenue at a rate above their cost of salary limits the establishment of some positions, despite the recognized value to the patient and organization.

Under the current proposed HR 4190, pharmacists’ services would be reimbursable under Medicare Part B if they are provided in medically underserved communities or health care provider shortage areas and in a manner consistent with state scope-of-practice laws. Pharmacists would be able to provide services and bill via their own national provider number. The rate would likely remain consistent with rates for other non-physician providers, at 85% of the physician rate. The scope of practice will be determined based on the state level. This advancement would allow a departure from the current physician-based clinic practice of billing to Medicare at an incident-to rate that is generally reimbursed at a rate far below the 85% mark. A reimbursement of 85% of the physician rate could justify ambulatory care pharmacists’ positions, but more important than direct reimbursement is the positioning opportunity within these clinics to take advantage of the new health care delivery model and add value to the patients receiving these services.

Provider status and subsequent payment through Medicare will increase pressure on pharmacists to prove consistent impact on measurable outcomes. While health systems might have different outcome needs, it will be necessary to demonstrate outcomes such as a reduction in rehospitalizations.

Advances in population health management are allowing pharmacists to utilize data to target patients who need focused care. Being able to review aggregate data will allow the pharmacist to identify patients who are in need of medicines that can prevent future health problems. This is essential to establishing the value proposition to health-system leadership, payers, and the public at large. After recognizing these patients, the pharmacist can initiate the proper care.

Pharmacists are poised to help alleviate the shortage of health care providers, and provider status will enable the recognition. The Health Resources and Services Administration (HRSA) report titled “Projecting the Supply and Demand of Primary Care Practitioners in 2020” states that in the current system, the primary care physician shortage is estimated to be 20,400 physicians.

 The report goes on to recognize that nurse practitioners and physician assistants could alleviate the shortage if properly integrated into new delivery models. Pharmacist providers could also serve as a workforce expansion mechanism if provider status and subsequent involvement in delivery models of team based care are established.

In addition to fulfilling a much-needed niche in primary care services, the ambulatory pharmacist can greatly complement specialty care by conducting comprehensive medication management for the specific disease state as well as managing primary care issues. One such example would be the solid organ transplant clinic. A pharmacist provider can see the patient prior to the transplant physician to identify any medication-related problems, which improves efficiency. Plus, the pharmacist can continue to see the patient in the clinic or contact them at home as needed for complications of transplant medications such as hypertension, hyperkalemia, and hypomagnesemia, and for therapeutic drug monitoring. Other health care providers recognize the value of allowing the pharmacist to focus on medication management in order to free them to focus on other aspects of care. Federal recognition is needed to gain support for the patient care roles of the pharmacist. As a complementary health care professional, the pharmacist is poised to become an integral member of the health care team.

Jami E. Mann, PharmD, MBA, is a PGY2 health-system pharmacy administration resident at the University of North Carolina Medical Center. 

Stephen F. Eckel, PharmD, MHA, BCPS, FASHP, FAPhA, FCCP, is associate director of pharmacy, University of North Carolina Hospitals, and clinical associate professor and director of graduate studies at the University of North Carolina Eshelman School of Pharmacy.

		Center for Medicare and Medicaid Services. Medicare “incident to” services. www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE0441.pdf. Updated April 9, 2013. Accessed October 9, 2014.

		Scott MA, Hitch WJ, Wilson CG, Lugo AM. Billing for pharmacists' cognitive services in physicians' offices: multiple methods of reimbursement. 

		US Department of Health and Human Services. Projecting the Supply and Demand of Primary Care Practitioners Through 2020. November 2013. http://bhpr.hrsa.gov/healthworkforce/supplydemand/usworkforce/primarycare/primarycarebrief.pdf. Accessed October 14, 2014.

Articles

A Health-System Perspective: The Evolution of the Pharmacist's Role

In health-system pharmacy circles, people continue to discuss the growing pharmacy enterprise, the possibility of pharmacy executives having a position in line with other hospital executives within the c-suite, and the aligning of multiple hospital pharmacy departments to form a corporate structure. While these are noble discussions, I worry whether they are fully congruent with the needs of the future pharmacy department.

I recently reread Clayton Christensen’s book 

, which I highly recommend. In it, Christensen attempts to demonstrate how disruptive innovation will reduce health care costs and improve care. As I was reflecting on some of the author’s statements about how health care will be transformed by disruptive innovation over the next decade or so, I started thinking about how departments of pharmacy will be structured amid all of the changes. If pharmacy wants to achieve its desired future state, I believe the current model is not organized to achieve these aims.

When I consider the future, I envision a health care system that values and pays for quality patient outcomes and one where pharma-cists are credentialed and reimbursed for ambulatory care services. Disruption of the system will be required to change the way things are accomplished and justified. I myself have been associated with a pharmacy department that has 37 credentialed pharmacists who are operating under collaborative practice agreements, so I understand the challenges involved in achieving change. Here are some of the issues at hand:

—The current business model that pharmacy departments have maximized is a transactional one. This is referred to as fee-for-service and typically is manifested through the purchase and sale of medications, but also includes pharmacy services. Ambulatory pharmacy services under a disease state management model are justified and valued based on how much money a pharmacist can bill for their clinic. This is not how one would describe the business model of the desired future state. The future pharmacy will be built on achieving and maintaining certain quality outcomes, and not based on the inputs required to get there. I would argue that these 2 business models are so different that they cannot exist in 1 pharmacy department.

(2) Consistent overhead and infrastructure

—Many pharmacy departments do not employ pharmacists to work in the clinic because the economics in a fee-for-service model do not work. What this means is that the current reimbursement for patient care services does not cover the cost of the pharmacist. Some argue that the amount of reimbursement would need to increase to justify having a pharmacist on staff in the clinic. No one ever mentions that maybe we need to create lower-paying pharmacist positions. This is because departments have a consistent salary structure for pharmacists from which they cannot deviate. If a completely different model for cli-nic-based pharmacists were created that differed from the overhead model of the existing department, the pharmacy department would have greater flexibility. A reduction in pharmacist salaries may be required to create an economic model that works. This cannot be done with the current overhead across the entire department that was used for justifying acute care services.

(3) Pharmacy leadership that has little to no ambulatory experience

—Almost all directors of pharmacy gained their experience in the acute care environment. For the few who have real clinical experience, it probably occurred through inpatient rounding. However, future changes in pharmacy will be focused on ambulatory care. How can leaders of the pharmacy enterprise be successful in building this kind of pharmacy practice model when none of them have worked there or had any frontline management experience there?

While I understand the perils of having 2 pharmacy departments in an organization and know that it is unrealistic to expect pharmacy directors to have ambulatory experience, I do not think pharmacy can take advantage of a future that pays for quality patient outcomes without some transformative thinking. If we are not nimble and able to approach the model differently, we might miss out on an opportunity. 

 lists many examples of businesses that were very successful in a single model, but no longer exist because they were unable to innovate and transform themselves to the needs of the consumer. I do not want this to be said of health-system pharmacy, but if we do not change in the present, we will be unable to maximize our future.

The Future Health-System Pharmacy Department

Most people have heard the statement ”No margin, no mission.” It is frequently used in the context that an organization can never forget about the business it is in, whereby one cannot initiate activities that do not have a sustainable financial model. Are we taking this statement to extremes in the current setting of health care?

First, we need to understand what an appropriate margin is. Is it 2%, 4%, 6%, or even higher? Most hospitals are categorized as non-profit for tax purposes, but there has to be some margin in order to invest in infrastructure and capital improvements. Has health care become so focused on the margin at the expense of the patient? There are increasing salaries for health care executives and individual providers. There are increasing costs for technology and expenses associated with mergers and acquisitions. In addition, reimbursement for services rendered is less each year—and there is definitely uncertainty about the future of health care. Having cash on hand and sufficient reserves could be helpful if things get worse than they are currently.

While I am not in favor of regulating margins, excesses at the expense of the patient must be limited. Patients don’t have the option to shop around for health care services. We are all just a catastrophic event away from having extremely high medical insurance bills. While most pharmacists have a comfortable life, working hard to be productive members of society, a multimillion-dollar hospital stay could change all of that in an instant. Having a new perspective on the health care system by owing money rather than providing services gives one a completely different lens. It shows that there is tremendous waste in the current system, and how margin is sometimes preserved at the expense of the patient. I believe the best way to temper the focus on the bottom line is to truly understand your organization’s mission and pursue it. Is your primary focus the underserved in your area? Are you more focused on the insured, or a specific patient population? What are the current gaps in care? How are you doing in meeting your mission? What are the strengths of the organization?

Some hospitals are better at the acute care setting, while some excel at team-based care and others have expertise in the ambulatory care setting. Having an understanding of your core competency allows one to align the expressed mission of the organization with budgeting decisions and activities. If there is concordance, there is demonstration that the organization is pursuing its mission. If there is evidence that the organization is expanding into areas in which it does not have much demonstrated expertise, this misalignment could lead to needing excessive margins to fund these endeavors.

Unfortunately, health-system pharmacy is contributing to these excesses. Some departments are being asked to provide greater revenue or contribution margin to the organization each year. This is usually through increasing drug markups while holding down drug costs or personnel expenses. A few pharmacy departments are using the excessive margin for expansion into areas where they have previously not had a presence. This is typically in the ambulatory, mail order, or specialty pharmacy setting.

If you can state definitively that this new model is the best option for the patients you serve, then by all means pursue it. However, if you are so focused on growth and the need for revenue at the risk of allowing the patient access to the most appropriate care options, I would advise that you proceed with caution.

While I definitely understand the saying “‘No margin, no mission,” I just hope that healthsystem pharmacy does not pursue it to the extent that it becomes ”Too much margin, too few patients.”

The Bottom Line: The Patient as Our Focus

 Pharmacists gaining provider status is a major legislative push among the various professional pharmacy associations, national employers, and trade groups. Most have partnered to form a coalition and together develop a strategy that will amend the Social Security Act to recognize pharmacists as providers. This status will allow Medicare beneficiaries to gain access to pharmacist-provided ambulatory-based patient care services. While I believe this is a laudable goal and one I hope is ultimately achieved, I want to make sure we do not put all of our energy into 1 item and miss out on emerging practice models that might ultimately impact a greater number of patients.

In a broad sense, the current health care reform that is under way impacts both delivery and financing. While acute care services will never go away or lose their importance, the ultimate goal is to keep patients healthy and minimize the use of these expensive services. In addition, a growing realization of the importance of incentivizing health care providers to keep their patients healthy will occur. If pharmacists are successful in getting provider status, the result will be individual pharmacists having appointments with patients and billing for their time in managing their medication needs. With more patients having insurance and a growing focus on prevention, this has to be positive.

Yet while it is a good thing, a few assumptions need to be met for pharmacists to take advantage of the legislation:

Ambulatory care services will have to operate as fee-for-service for business models to be sustainable.

Employers will have to value a pharmacist involved in medication management as opposed to another mid-level practitioner

The reimbursement rates that arise after provider status is achieved will have to be sufficient to financially support pharmacist services.

If these assumptions do not become reality, then pharmacy might get provider status but the business model to support it will not exist. Because of this, pharmacy needs to be active in supporting other roles of pharmacists in emerging models of health care delivery.

One area that is starting to be talked about more is population health management. What this term encompasses is taking a holistic view of all patients in a clinic and targeting any outliers. As opposed to being referred a single patient from a provider for chronic disease management, the pharmacist has a panel of patients and follows them collectively.

For example, a clinic might have hundreds of diabetic patients who are in need of cardiovascular risk reduction. An insurance company might incentivize this clinic with improved reimbursement rates if a certain percentage have their glycated hemoglobin at a certain goal, are taking an aspirin for cardiovascular risk reduction, and keep their lipids within an appropriate range. The provider responsible for this initiative would determine all the patients in this group to be at risk, contact them through different means, and then implement strategies to improve compliance. While the visits could be appointments that allow one to bill for the encounter, much of it would be done through group visits, telephone follow-up, or even tele-health interactions. Gaining provider status might not have much impact here.

I believe population health management will continue to increase in importance, especially as accountable care organizations and health systems predominate. Not only do we need to train our future practitioners on how to see patients in this manner, but we have to be considered as the health care professionals to lead it in the clinic setting. If not, someone else will and it will be a lost opportunity for pharmacy.

My concern is that if we only focus on provider status, we could miss out on other emerging roles that will be a part of future health care delivery reform. I hope we do not miss out on the forest for the trees.

Do you have insights on the future of pharmacy activities in the ambulatory care setting? Just let me know.

The various professional pharmacy associations, national employers, and trade groups are involved in a concerted push to win provider status for pharmacists.