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

Pharmacy Practice in Focus: OncologyDecember 2014
Volume 1
Issue 6

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

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.

Credentialing and Privileging

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.

Preventing Readmissions

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.

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.

Maximizing Reimbursement

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.1 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.2 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.

Measuring Outcomes

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.

Improving Access for Patients

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.3 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.

Additional Opportunities

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. J Am Pharm Assoc. 2012;52(2):175-180.
  • 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.

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