Payment Reform for Pharmacists Remains Variable

Pharmacy Practice in Focus: OncologyDecember 2015
Volume 2
Issue 5

A shortage of primary care physicians is looming in many areas of the United States.

A shortage of primary care physicians (PCPs) is looming in many areas of the United States. However, although projections indicate this situation will get worse before it gets better, unexpected positive changes are happening for pharmacists.

The Role of the Pharmacist Is Changing

To meet the health care shortfall, which results partly from health care reform, pharmacists are taking on expanded responsibilities. Most community pharmacists no longer stay exclusively behind the counter. Instead, they are developing new skills beyond the traditional prescription-dispensing function. Pharmacists now provide direct-care services, such as immunizations, point-of-care (the delivery of health care services to patients at the time of care), wellness and prevention screenings, medication therapy management, chronic condition management, patient education, and counseling.

These roles are often part of team structures and are carried out in a much wider range of settings than the traditional drugstore or hospital. These settings include inpatient facilities (hospitals, nursing homes, and rehabilitation centers); outpatient, urgent care, and ambulatory clinics; patient centered medical homes (PCMHs), and accountable care organizations (ACOs). The PCMH is a care delivery model whereby patient treatment is coordinated through a patient’s PCP physician to ensure the patient receives the necessary care when and where they need it, in a manner they can understand. ACOs are groups of doctors, hospitals, and other health care providers, such as pharmacists, who work together to offer coordinated care to their Medicare patients. The goal of an ACO is to ensure that patients, especially those who are chronically ill, receive the best care when they need it and avoid unnecessary duplication of services which raises costs.

Studies of pharmacists who provide medication therapy management (MTM) services show that such services can improve outcomes and reduce costs. These services are typically provided through collaborative practice agreements. In most states, pharmacists can modify prescriptions under a collaborative agreement that allows pharmacists to address drug-related adverse effects and improve therapeutic outcomes for patients.1 The compensation model still mostly lags behind these new opportunities.

How Can Pharmacists be Compensated for Providing New Services?

Community-based pharmacists are considered to be among the most accessible health care practitioners.2 However, when they branch out from filling prescriptions, they find there is often a problem in obtaining reimbursement for these services. In the current environment, pharmacists can bill patients directly on a cash-transaction basis, provide services under a third-party insurance-contracted service, or use pharmacist-specific current procedural terminology (CPT) codes.

Medicare and Medicaid compensation policies also limit pharmacists’ ability to practice in new areas, particularly within integrated care teams. For example, under Medicare Part B, pharmacists are not included in the statutory definition of providers and, therefore, cannot directly bill for patient care services. In addition, many state and private health plans align their payment policies with Medicare policies and, as a result, do not allow pharmacists to bill directly for patient care services.3

These situations are not unusual. As we look to 2016, the hope is that as pressures continue to increase on health care providers, the value of pharmacist-provided services will be recognized and reimbursed. Some change may happen as alternative payment models (APMs) and fee-for-service (FFS) quality initiatives continue to take hold. In 2018, APMs and FFS linked to quality are forecast to hit 50% and 90%, respectively, of reimbursements.4

Currently, pharmacists who practice in walk-in clinics, urgent care facilities, or inpatient or outpatient facilities may be able to negotiate contracts with different payers or self-insured employers. There is also the “incident to” concept where a pharmacist bills services under a physician’s National Provider identifier number (issued by CMS). In this case, reimbursement is 100% of the Medicare fee schedule as opposed to only 85% when the service is billed under the pharmacist’s number.

Depending on the payer, a pharmacist may also use some CPT codes when seeking reimbursement. Three pharmacist-specific CPT codes (99605, 99606, 99607) were established for the delivery of medication therapy managed services. These codes are used by Medicaid, private health insurers, or Medicare. MTM for Medicare Part D beneficiaries is among the most prominent types of direct patient care services that are reimbursed by payers today.

How Does the Law Play a Role?

States, too, are very slowing recognizing the value of pharmacists in direct care. The first to implement changes are Washington, California, and Oregon. On January 1, 2016, Washington will enable pharmacists to bill for their services just as a physician bills a patient for theirs. With such laws, these states lead the way in requiring health insurers to consider pharmacists as health care providers alongside doctors and nurses. In California and Oregon, pharmacists will be able to prescribe contraceptives. After a brief screening that will include a questionnaire about the woman’s health and medical history, the pharmacists will assess whether to prescribe birth control to her based on health history and lifestyle. Then the pharmacists will either dispense the birth control or refer the woman to a physician. The pharmacists will be reimbursed by payers if the woman carries insurance.

As long as Uncle Sam does not widely recognize pharmacists as health care providers in federal programs, pharmacists will have to pick and choose opportunities to obtain reimbursement. This is, however, a path that can lead to a better situation at the state level. Should the shortage of PCPs continue and affect more high population areas, state legislators, like those in Washington, California and Oregon, are likely to consider efforts to give pharmacists the provider designation status, which should result in remuneration for services.5-8

Nan Myers is a content strategist who works with health care clients to tell their stories through writing for newsletters and published articles, while also coordinating media relations.


  • National Center for Chronic Disease Prevention and Health Promotion. A program guide for public health: partnership with pharmacists in the prevention and control of chronic diseases. CDC website. Published August 2012. Accessed December 1, 2015
  • Avalere Health. Developing trends in delivery and reimbursement of pharmacist services. NASPA website. Published October 30, 2015. Updated November 4, 2015. Accessed November 16, 2015.
  • Social Security Administration. Title XVIII—Health Insurance for the Aged and Disabled. SSA website. Accessed December 9, 2015.
  • Tefera L. Delivery system reform and the hospital value-based purchasing (HVBP) program. SlideShare website. Published September 3, 2015. Accessed December 9, 2015.
  • Maine LL, Knapp KK, Scheckelhoff DJ. Pharmacists and technicians can enhance patient care even more once national policies, practices, and priorities are aligned. Health Aff (Millwood). 2013;32(11):1956-1962. doi: 10.1377/hlthaff.2013.0529.
  • Smith M, Bates DW, Bodenheimer TS. Pharmacists belong in accountable care organizations and integrated care teams. Health Aff (Millwood). 2013;32(11):1963-1970. doi: 10.1377/hlthaff.2013.0542.
  • Yap D. APhA to HHS: lack of provider status a barrier. American Pharmacists Association. website. Published November 4, 2013. Accessed June 18, 2015.
  • Marotta R. Regional pharmacy trends: the state of provider status. Pharmacy Times website. Published February 16, 2015. Accessed June 18, 2015.

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