I’m optimistic about what 2020 and the new decade holds for your pharmacy and all independents across the country. That’s because there are opportunities for you to take advantage of four new performance trends. Each gives you the chance to show payers the great care that you provide to your patients—and have them reimburse you for it.
Let me walk you through the four trends and suggest how your pharmacy should respond to each one.
1. Changing DIR fee structure
Direct and indirect remuneration (DIR) fees are not going away in 2020 and, in fact, we expect them to grow. Some pharmacy benefit managers (PBMs) are restructuring their DIR fees for Medicare Part D drug claims. What the PBMs are doing is paying you more on the frontend at the point of sale. But they’re taking more back in DIR fees on the backend.
As you know, DIR fees can vary based on your performance. You can reduce fees on the backend by exceeding the performance measures in your contracts. PBMs pay you more on the frontend, and you’re not returning as much on the backend. The net for you could be more revenue per script. It’s important to know that this is happening so you can focus your efforts as you strive to meet or exceed PBM’s performance metrics. At the very least, you may need to set aside some of that upfront money to pay for higher DIR fees later so you don’t hurt your cash flow down the road.
2. Pay-for-performance goes commercial
What we’re starting to see for 2020 is pay for performance (P4P) moving into Medicaid managed-care and commercial health insurance. But P4P in the Medicaid and commercial space isn’t taking the same form. It’s not DIR fees. It’s things like performance pools and bonuses.
In a performance pool, the payer will hold back a flat or percentage based fee from each prescription and add it to a performance pool. Then the payer pays out money from that pool to higher performing pharmacies. With bonuses, a plan will set aside money and pay out bonuses to pharmacies for things like adherence rates, immunizations and disease management. It’s upside only. No downside risk.
You should find out about the P4P programs that your Medicaid program and commercial payers offer. Learn how they work and if they apply to you. P4P models are opportunities for payers to reward your independent pharmacy for the great care that you provide to your patients.
3. Standardized pharmacy quality measures
Right now, most health plans and PBMs use broad population health-level measures or health plan-level measures to evaluate how well pharmacies like you take care of their enrollees. Often the quality measures that they use aren’t standard. These measures may dilute your performance because you’re lumped in with all pharmacies in your network or because the measures don’t apply to what you do for patients.
That may change in 2020. The Pharmacy Quality Alliance brought together payers and pharmacy stakeholders to create a set of standardized, pharmacy-level performance measures. In August 2019, PQA released a “Proposed Standard Measure Set for Pharmacy Accountability in Value-Based Models,”, which includes standard quality measures for both community and specialty pharmacies. The first set of measures for community pharmacies, which could be included in payer contracts as soon as 2021, includes patient adherence rates for diabetes, blood pressure and cholesterol drugs.
You should keep your eye out for a final set of these measures in early 2020 and understand how they might affect your pharmacy.
4. Pharmacists gain provider status
This has been a long time coming, and the time may finally be here. CMS Administrator Seema Verma recently indicated that the agency may give pharmacists provider status under Medicare.1 Granting pharmacists provider status would allow them to be recognized as providers under Medicare. This is an important first step in pharmacists being paid for providing care.
Not only would that generate additional revenue for your pharmacy, it would help unlock additional payments for your pharmacy from other payers. As Medicare goes, often so goes Medicaid and commercial insurers just like we’re seeing with the P4P models. It would allow you to diversify your revenue stream and not rely solely on prescription revenue. Those same services also could become performance measures under various P4P models. They could be embedded into value-based care contracts and earn you payment bonuses.
Adapting to these four trends can help your pharmacy thrive—and most importantly, deliver superior patient care in the new year.
Related: Learn more about McKesson’s managed care contracting services for independent pharmacies