Provider Status: A 3-Part Construct

Pharmacy Times Oncology EditionDecember 2014
Volume 1
Issue 6

The Meaning of Provider Status Encompasses 3 Distinct Concepts

The meaning of provider status encompasses 3 distinct concepts.

Provider status is certainly one of pharmacy’s most complex issues, as it brings together 3 separate but interrelated concepts: provider status as a label (or means of recognition), provider status as a scope of authority, and provider status as a means of obtaining payment.

Sought by pharmacists and pharmacy associations alike for a number of decades now, pharmacist provider status has gained increasing attention of late in the form of articles written, weblogs posted, petitions signed, and dinner table discussions held among friends and family. The quest for pharmacist provider status has had a unifying effect among pharmacists, bringing together around a single cause nearly all corners of the profession through a collective call to action. Yet, a universal understanding and acknowledgment of what provider status actually means seems to be lacking. I often hear champions of provider status cheer for this provider status bill or that provider status bill, engage in the promotion of a particular practice act change, or laud a medication therapy management (MTM) payment program, all in the name of promoting the role of provider. The problem is, those 3 examples actually emanate from 3 separate provider status concepts that are related but are distinctly different from one another. Often this results in confusion and ineffective messaging.

In this issue of Directions in Pharmacy, we sought to find diverse and provocative voices to share their perspectives on provider status. Although most everyone in the profession agrees that some expansion of our current status is both deserved and needed, many of the subtle differences in the meaning of provider status—or more importantly, the optimal emphasis upon which elements or component parts of provider status are essential for moving the profession forward—remain open for discussion and interpretation.

Concept 1: Provider Status as a Label Bestowed by a Payer or Other Labeling Authority

Provider status is perhaps most precisely defined as a label, or a means of recognition bestowed by an authority. In our health care system, the most important bestowing authority is the payer, with the federal government being perhaps the most important of those payers. The 1965 amendments to the Social Security Act (SSA) contain arguably the most significant provisions of health care legislation in the history of the country (yes, far more significant than the Affordable Care Act, also known as Obamacare). They created federally provided health insurance for the elderly (Medicare) and for low-income and disabled populations (Medicaid, as a combined state—federal program). They also define which practitioners are considered providers within the US health care system under the SSA : as the term relates to federally funded insurance programs. The popular saying, “As goes Medicare, so goes the rest of the health care system,” is apt, with Medicare representing the single largest block of consumption of health care resources in the entire US system and often setting the trend for other payers.

The importance of attaining the provider status label can best be understood by examining the effects of the SSA’s definition of a provider. It is frequently cited by many other entities and granting authorities through their statutes, bylaws, and administrative activities. Oftentimes used as a crutch, the provider status definition in Medicare Part B of the SSA becomes a substitute for an organizationally conceived definition of providers. A good example of this phenomenon occurred as many health information exchanges (HIEs) came into being, requiring governance and privileging frameworks to guide access and transfer of data. While other practitioners and covered entities folded quite easily into the security and privacy framework of the HIEs, pharmacists and pharmacies presented a relatively unique challenge, particularly for individual pharmacists providing care coordination and treatment under the flag of a particular covered entity (such as a chain pharmacy). Rather than attempting to build a consensus definition of providers that was complete and inclusive of the plethora of allied health care practitioners, a less taxing and more common approach was to use the federal definition in the SSA as the basis for their policies, either in part or in whole. Indeed, a number of state and local statutes, provisions, and policies in both public and private domains currently in effect across the United States contain language akin to the following: “Providers eligible (for access to a website, or data stream, or care management fee, or protection from tort liability, or other privilege…) shall be as defined as is stated in the Social Security Act…”. Of note, even though many program administrators and legal experts do consider the naming of pharmacists in the Medicare Modernization Act of 2003 as the bestowing of provider status for Part D MTM, the absence of the label of provider in Medicare Part B, where all other health care providers and their services are recognized, remains problematic.

Concept 2: Provider Status as a List of Allowed Activities Performed by a Practitioner (Authority to Practice) Yet another related provider status concept is the universe of patient care activities one can legally engage in under the law. A number of state and federal laws have been passed under the banner of provider status that close analysis reveals to be focused nearly entirely on changes to the state’s pharmacy practice act (at times in combination with the state’s medical practice act) to expand the list of allowable activities and services to be provided by a licensed pharmacist. Whether prescriptive authority, ability to order labs, or even conduct physical assessments, the expansion of authority to perform activities has been sought by pharmacists for many decades now, and often the term provider status is used to describe the effort to achieve an expansion in allowed patient care activities. For instance, a recently passed piece of legislation in California that was hailed as a pharmacist provider status bill was mostly about expansion of activities, not payment, though it did provide pharmacists with broad labeling as providers. Indeed, most legislative and administrative actions under the auspices of the broader, more global definition of provider status have come from expansion of authority (to engage in patient care activities) to date, rather than expansion of labeling or expansion of payment. Unlike “provider status as the label,” where most of the focus is on federal law, efforts around “provider status as a list of allowed activities” typically focus on state-level law and action.

Concept 3: Provider Status as Meaning “Eligible for Payment”

Pharmacist provider status as a label is important to achieve, and expansion of allowed patient care activities is essential for providing services of value beyond product distribution, but payment is the end game with respect to sustainability. When most pharmacists contemplate provider status, they are thinking, “This is how I’m going to get paid for the valuable services I am going to provide (or are already providing for free, or through indirect support/payment).” For most health care professionals, payment comes directly from a payer and the payer must agree to pay the provider for the provider’s services.

Yet examples abound of pharmacists providing advanced clinical services under the label of a provider or advanced practitioner—even to the point of achieving the label of provider and being listed and codified in the claims submission system—without actually being reimbursed for the services provided. Of note, a number of programs and pilots, both past and present, have paid pharmacists and pharmacies for services beyond order fulfillment and never named pharmacists as providers (the label), nor required an expansion of allowed activities under the state’s pharmacy practice act (the authority); for example, the Asheville Project. Additionally, emerging payment models that “pay for value,” such as shared savings programs, compliance and persistency programs, and carve-out programs, may be paid for indirectly rather than directly from the payer/insurer for a given patient. Indeed, the US health care system is entering a period of payment transformation, so the traditional construct of payment may not entirely hold.

Scope of Practice: Which Services That You Provide Are Promoted?

It may be argued that the “list of patient care activities allowed by law” is synonymous with “scope of practice.” However, there is a nuanced difference when “scope of practice” is viewed from the perspective of the patient and/ or payer. A more inclusive manner of thinking about scope of practice would combine the concept of which activities are allowed by law and which activities are acknowledged (or promoted) by a payer with the label (means of recognition) bestowed by the payer. An example: nearly all states have allowed the pharmacist the authority (conferred by pharmacy practice act or medical practice act or both) to immunize either independently or through a collaborative practice agreement. If a patient were to go to the payer website to generate a list of places in their neighborhood in which to get a flu shot, it would be the combination of state law that allows the activity (the authority) and the payer that promotes the activity (the labeler) through identification of the practices (inclusive of pharmacy practices in this instance) that provide the service. Thus, flu shot administration is included in the pharmacist’s scope of work (yes, it’s allowed, but also promoted and it is widely understood that they provide the service; labeling assists with that widespread recognition and awareness of the service and service provider).

In other words, one can have the authority to provide anticoagulation services or diabetes education, but the label (the recognition as a provider of services) is essential for the larger sphere of patient and care team understanding of what those anticoagulation and diabetes practices offer. If I asked you, “What is a primary care provider’s scope of practice?” would you envision all that is allowed by law (the authority), or would you envision the collective understanding of what primary care providers do through their labeling and positioning of services in the marketplace? Note that generally speaking, primary care providers have a very wide scope of authority that goes well beyond their actual practice, so in turn we (as patients/consumers/care team members) have a narrower view of their scope of practice than the broader set of activities such as general surgery that are legally allowed by law, thus authority ≠ label.)

Scope of Work: What You Get Paid to Do

Scope of work is what you get paid to do (in terms of contracts, either with a payer or purchaser such as an employer or individual patient). It is not equivalent to the activities you perform (in terms of the calories you burn). Just as with any contract that contains a formal scope of work section, the scope of work for any provider is the work to be performed based on some fee schedule or payment agreement, either directly or indirectly from a purchaser or payer. Remember, scope of work ≠ scope of practice. There probably are more examples of pharmacists engaging in a scope of practice with no payment (no contractual scope of work) today than there are examples of pharmacists engaging in scope of practice activities for which there is a scope of work attached by a payer to those activities. Thus, just as authority ≠ label, authority ≠ payment (see online Figure).

The Triad

Only when label, authority, and payment align do you have the complete current construct of provider status. It is a very rare circumstance for pharmacy, and an even rarer circumstance for individual pharmacists, for all 3 of these moons to align. Historically, the value pharmacists have provided has resulted in a payment system where that value is percolated through the system via indirect support, or subsidization through other activities, not direct support. Even if a pharmacist’s activities were relegated to order fulfillment alone (an extremely narrow view of pharmacist activities and capability), there is still a set of services being provided (right patient, right drug, right instructions, right dose, no regimen conflicts, third party engaged for adjudication) that is reimbursed through a product/ retail construct, ostensibly through the dispensing fee. It’s still an indirect manner in which to be paid for the service. Similarly, the tens of thousands of pharmacists embedded in clinics and certainly those rounding on the floors at hospitals are supported through indirect means, not by direct means through a payer or purchaser. The entire profession has survived by means of indirect payment/support for nearly a century now.

The New World of Team-Based Care

The new world is about fee for value, accountability, team-based care, and population management (medical neighborhood). All 4 of these constructs fly in the face of the traditional label-authoritypayment provider status construct that has dominated the financing and practice of modern medicine in the United States. Pharmacists should pay close attention to the tectonic shifts that are occurring beneath our feet, whether in the community pharmacy, clinic, hospital, long-term care facility, or other setting of care. None of us is immune to the changes under way. They are fundamental and inevitable, given the reality of limited taxpayer and consumer ability to fund the system as it has existed.

The Whole Is Stronger than the Sum of the Parts

Physicians, nurses, and other health care professionals who have achieved provider status are not our adversaries, they are our partners in this new world. They should be active participants in helping us define and maximize our role and our value (to our benefit, and theirs). The emerging label-authority-payment constructs for pharmacy that will come to pass in the new world will likely require more inclusive and collaborative models that put the patient in the position of establishing care team relationships, with their outcomes establishing the financing. Appropriately, the profession has campaigned for a model of interdependence and collaboration, not independence. This should serve the profession well since fundamental system changes that will occur over the next 5 to 10 years will likely set the trajectory for pharmacists for the next 50 to 100 years.


Troy Trygstad, PharmD, PhD, MBA, is the director of the Network Pharmacist Program and Pharmacy Projects for Community Care of North Carolina (CCNC), a parent organization of 14 regional care management networks. These networks bring together medical practices, county health departments, hospital systems, and mental health providers to integrate care delivery for Medicaid, Medicare, private plans, employers, and the uninsured. CCNC and its networks are responsible for developing and evaluating accountable care systems in North Carolina.Under his direction at CCNC, the Network Pharmacist Program has grown to include pharmacists who are involved in a number of diverse activities ranging from patient-level medication reconciliation to practice-level e-prescribing facilitation to network level management of pharmacy benefits. Dr. Trygstad also plays an integral role in health information technology adoption and proliferation with CCNC practices and across the state, leading e-prescribing adoption efforts as well as the development and deployment of a statewide medication management platform.He has been involved in novel adherence implementations as well as the development of adherence technologies that use administrative claims data to predict, intervene, and triage adherence interventions and coaching opportunities. Dr. Trygstad received his PharmD and MBA degrees from Drake University and a PhD in pharmaceutical outcomes and policy from the University of North Carolina.He is co-editor of the Pharmacy Times series Directions in Pharmacy.

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