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Pharmacists Push for More Explicit Role in Accountable Care Organizations

Pharmacy & Therapeutics...October 2011

     When CeutiCare, LLC, a Cleveland-based pharmacy management company, began its experiment with an Ohio Medicaid HMO in 2008, Allen Nichol, Pharm. D., the company’s Vice President of  Clinical Operation and COO, had a strong hunch. It was that the HMO’s pharmacists using CeutiCare’s proprietary smart algorithm, could help physicians target the most effective medication for their patients and save the HMO big bucks in avoided hospital readmissions. One year later, Nichol had proof. Over the course of a year, treatment costs for patients seen by pharmacists wielding CeutiCare software were lower by $5500 per patient than for patients in a  control group. "The glaring thing was that hospital readmissions for the treatment group were down 29 percent," explains Nichol. "For the control group they were up 200 percent." Those results were computed by the Pfizer pharmacoeconomics division.

      Flash forward to September 2011. The Centers for Medicare and Medicaid Services (CMS) is weeding through applications from physicians' groups around the country who want to participate in the CMS's ACO program. Accountable Care Organizations (ACOs) were mandated by the 2010 Affordable Care Act, the health care reform bill passed by Congress and signed by President Obama. They aim to reduce Medicare spending—now a cause célèbre thanks to the debt ceiling debate--by forcing groups of physicians to collaborate more closely among themselves, in out-patient and in-patient settings, so as to provide patients in five high-cost chronic categories higher quality care at a lower cost. These ACOs will function much like HMOs, assuming risk for the comprehensive care of seniors and pocketing some of the savings ostensibly accruing from coordinated care. The ability of an ACO to reduce hospital readmissions will be a key to generating those savings. The new program is supposed to premier on January 1, 2012.

     So one would think, given the CeutiCare results with the Ohio HMO and numerous verified, reports of health plan savings generated by medication therapy management (MTM) services, that pharmacists would be to ACOs what baseball slugger Reggie Jackson was to the Yankees at World Series time..."the straw that stirs the drink." Think again. Pharmacists aren't even in the dugout.

    Only providers who bill Medicare directly for Part A hospital and Part B physician office services can participate directly in ACOs and share savings. That means physicians and hospitals. Pharmacists, except in one very narrow instance, are MIA from ACOs;  pharmacists may be able to direct bill from for Diabetes Self-Management Training services because those services are provided under Part B. Part D out-patient drug costs do not get computed when totaling ACO savings to Medicare.

    So ACOs will depend on pharmacists stationed in hospitals and physician offices--but not in community pharmacies--to help generate savings; they just can't make pharmacists risk and profit sharing "partners" in the experiment which, if it achieves some success, will become the model for a radical change in the way health care is provided and reimbursed, by the federal government and private payers, in the United States.
     Given the fact that pharmacists already account for significant federal and private health care cost savings, there has been a lot of unhappiness about their omission from the ACO experiment. "I am in utter disbelief that since there are 130 colleges of pharmacy in the U.S. and licensure requirements in all 50 states and US territories that the U.S. government continues to ignore the clinical contributions that are documented in thousands of peer review journal articles," says Nichol.

     Unfortunately, it does not appear that the Center for Medicare and Medicaid Services (CMS), which is administering the ACO program, has much leeway to bring pharmacists in from out of the cold. The language of the Affordable Care Act only allows providers defined as such under the Social Security Act to participate directly in ACOs, meaning share in their risks and rewards. Christopher Topoleski, Director, Federal Regulatory Affairs, the American Society of Health System Pharmacists (ASHP), says he understands that the CMS is limited in terms of allowing direct participation of pharmacists. What the ASHP and other pharmacist groups would like to see is CMS recognize the significant contributions pharmacists make in caring for patients, and for the ACOs to be able to pass some of those savings to pharmacists, be they situated in in-patient, out-patient or retail pharmacies.      

      Again, pharmacists in hospitals and physician offices will have a direct role in helping ACOs meet their two prime objectives: achieving quality benchmarks and saving money. ACOs will have to meet 64 quality indicators (that number may change in the final rule) before they can share in any savings. Many of those benchmarks require careful attention to medication handling. Those benchmarks include: In the area of care coordination/transition, Measure Number 10: Medication reconciliation after discharge from an inpatient facility and Measure Number 11: Care transition measurement (including the medication therapy management component). Preventive health measures include influenza immunization, pneumococcal vaccination, and cholesterol management for patients with cardiovascular conditions. There are separate measures for individual "At Risk" populations. For those with coronary artery disease, measures include oral anti-platelet therapy prescribed for patients with CAD, drug therapy for lowering LDL-cholesterol and beta-blocker therapy for CAD patients with prior myocardial infarction (MI).

      To the extent that quality benchmarks are based on evidence-based protocols, they presumably lead not only to healthier patients but to fewer adverse drug reactions and shorter hospital stays as well. Helping hospitals adhere to those protocols is where hospital pharmacists make their contribution, and it leads to significant cost savings. Once a patient leaves the hospital, a pharmacist working in a physician's office helps reduce hospital readmissions. "Hospitals have their own formularies and they differ from the formularies used by a patient's health plan which comes into play when the patient goes home," says Mike Edbauer, Chief Medical Officer, Catholic Medical Partners in Buffalo, N.Y. "The medications in the medicine cabinet at home can be different than the medications the patient comes home with, such as two different statins, or two different blood pressure medicines. Or maybe the hospital drops an ACE inhibitor the patient was taking prior to being hospitalized. These are fairly significant errors we have been able to identify." Catholic has been using pharmacists to reduce hospital readmissions.

       Excluding pharmacists from sharing risk and rewards in ACOs, the language of the Accountable Care Act aside, makes as much sense as the Medicare program throwing money out the window.   There are indications that the ACO concept works. In creating them, Congress used the Physician Group Practice Demonstration (PGPD) established by Medicare in 2005 as a model. It was the first pay-for-performance initiative for physicians under the Medicare program, and it ran for five years. It offered “performance payments” to participants that met most of 32 measures of quality — half as many as in the proposed rule — and spent at least 2 percent less for Medicare patients, compared with a group of similar Medicare patients outside the experiment who lived nearby. Results from the five-year-demonstration program were published in December 2010, and to outsiders they didn't look all that good. That was because the data on cost savings appeared to be unconvincing. But most of the10 participants did save money, just not enough to get over the percentage hurdle the CMS had established before the physicians could share those savings.  
     The University of Michigan Faculty Group Practice was one of the 10 participants in the PGPD.  David Spahlinger, M.D., Senior Associate Dean for Clinical Affairs, University of Michigan Faculty Group Practice, explains that 5 of 10 groups earned money back from Medicare, his included.  The UM practice has 30 sites, some of them huge, as large as 400,000 sq. ft, containing more than one clinic. Spahlinger explains that there are five pharmacists spread over those 30 sites. "If a patient has a complex pharmaceutical problem, we hand it off to the pharmacist," he states. "The faculty group practice organization implemented a transition of care program and complex care management program. Pharmacist played an important role in our management of patients with multiple medical problems with complex medication regimens."

      Other physician groups outside the PGPD have also inaugurated coordinated care models. One of them is Catholic Medical Partners in Buffalo, N.Y., an independent practice association which includes five hospital out-patient clinics and about 200 physician offices. Edbauer says the IPA's clinical integration model added pharmacist participation a few years ago. CMP employs three pharmacists full time and four others do per diem work. Those pharmacists are assigned to the larger clinics and physician practices, with additional sites being added to pharmacist coverage throughout 2011. Typically, a pharmacist spends four hours at one site, seeing patients with complex medication issues and chronic diseases. 

    But Edbauer says the biggest impact the pharmacists have had is in the CMP's Care Transitions Program. When high-risk patients leave the hospital, they go into the program, which provides nurse visits within 48 hours to the exiting patient's home. The nurse, among other things, checks the medications in the released patient's medicine cabinet and sends that list to one of the seven pharmacists, who has access to the patient's electronic medication record, whether the pharmacist is at a clinic or not. Pharmacy students sometimes accompany the nurse to assist with the medication collection as well as provide additional  information to the patientEdbauer points out that the drugs a patient received off the hospital's formulary may have been different than the drugs the patient had been receiving at home, prior to hospitalization, through his or her health plan.  

     When Edbauer met this past January with members of the CMS Administration, he shared  that virtually 100 percent of the patients in the Care Transitions Program had at least one medication changed when they arrived home. "When we started the program, we weren't anticipating that volume of opportunity," Edbauer emphasizes. "It has shown a positive return on investment. Both the insurance companies we work with and we have been satisfied with pharmacist collaboration so much so that we are growing the program." CMP has also applied to participate in the pioneer ACO, the pilot model the CMS is now trying to get off the ground prior to finalizing rules for the entire program.

        Neither Edbauer at Catholic nor Spahlinger at the UM have comprehensive, public data about how much money their groups are saving because of pharmacist intervention in health care. But that data exists elsewhere. In its comments to the CMS on the ACO proposed rule, the National Community Pharmacists Association (NCPA) pointed to a 2010 study by Oliveira and others which examined MTM outcomes over a ten year period in a large integrated health care system. (1) Among positive results from the study, for a subset of diabetes patients, the study showed that 42.7% reached all diabetes goals through MTM and  that over the 10 year study there was a pharmacist-estimated cost savings to the health system of about $86 per encounter. Stated differently, there was an estimated return on investment of $1.29 per $1 spent in MTM costs.
1 De Oliveira, DR, Brummel, AR, Miller DB. Medication therapy management: 10 years experience in a large
integrated healthcare system. J Manag Care Pharm. 2010:16(3):185-195. (April 2010)

     While MTM services are and can be provided in a hospital, and can come into play in an ACO environment, narrower medication adherence programs are probably prevalent in Part D. These have shown the ability to reduce hospital readmissions, too. A 2007 study by Murray and others revealed that during a nine month pharmacy intervention period, direct health care costs were lower for the intervention group by $2,960 per person. There were also less adverse drug events and medication errors in the intervention group.(2)

2  Murray M, Young J, Hoke S et al. Pharmacist intervention to improve medication adherence in heart failure. Ann Intern Med. 2007;146:714-25.
     However, community pharmacists are excluded from ACOs since Part D costs are not part of the savings calculations authorized by Congress. Spahlinger thinks it would make sense to include Part D costs in ACO savings calculations, although he says there are problems in doing so since those Part D costs will be going up, through no fault of the ACO, given the congressional decision in the ACA to fill in the Part D "doughnut hole."

     The exclusion of Part D costs may have something to do with pharmaceutical company opposition to their inclusion. Steve Phillips, director of health policy at Johnson & Johnson, says his company supports the CMS proposal not to include prescription drug expenditures from Medicare Part D in either the historical benchmark calculation or the performance period expenditures. J&J contracted with The Moran Company (TMC) to conduct an analysis of the potential impacts to Part D plans and to overall Medicare spending if ACOs move their patients to Part D drugs rather than drugs or biologics paid under Parts A or B. TMC analyzed the top 50 Part B drugs (by spending) and identified 23 as having a Part D drug counterpart. If Part B spending for these 23 drugs in 2009 had been completely replaced by branded Part D drugs reimbursed at prevailing Part D reimbursement levels, Part D spending would have increased by $10.0 billion in 2009. Because base Part B spending for these drugs was only $5.7 billion in 2009, Medicare gross drug spending would, in this scenario, have increased by $4.3 billion, or by 76%. 

         Having successfully kept Part D costs out of the ACO calculation, drug companies are now focused on making sure that ACOs provide costly, new "breakthrough" drugs to their Medicare participants even if those participants do not run up Part A or B charges. Phillips from J&J, by way of an example, suggests that Medicare ought to include costs of providing a new Alzheimer's drug if and when such a drug is approved by the Food and Drug Administration. Alzheimer patients do not receive Part A or Part B services, for the most part, at least not those contemplated by the ACO program. "In this case, an ACO would be 'penalized' for providing the new treatment to its patients," he states. 

         Not only are pharmaceutical manufacturers worried about ACOs walling themselves off from expensive new drugs, they are also concerned that federal health centers or hospital partners of the ACOs, where they qualify for the federal 340B discount drug program, will improperly provide ACO patients with 340B drugs, which brand name companies have to sell at a discount. The purpose of the 340B Program is to enable federally-qualified health centers,  disproportionate share hospitals and a couple other categories of hospitals that are safety-net providers to stretch scarce federal resources. They may purchase discount brand-name drugs which manufacturers must provide if they want to sell non-discounted pharmaceuticals to Medicaid programs. 

     Lynda Bryant-Comstock, Director, HHS Government Relations, GlaxoSmithKline, says the  proposed rule provides a five percent bonus to ACOs that include a federally qualified health center or a rural health center, both of which are 340B eligible entities in their networks.  "We are concerned that without specific guidance there may be an attempt to require all patients enrolled in the ACO to fill prescriptions in an outpatient pharmacy of a 340B entity, which would subvert the intention of the program," she states. "Furthermore, absent such guidance, there is the possibility that ACOs may change their treatment protocols in a way that would move a patient from an inpatient setting to an outpatient setting in order to have access to 340B pricing discounts."

     Another ACO issue that will touch hospital pharmacies is electronic health records (EHRs). The CMS proposed rule requires at least 50 percent of an ACO’s primary care physicians be meaningful EHR users by the start of the second performance year, and that ACOs have a mechanism in place to electronically exchange summary of care information when patients transition to another provider or setting of care. The CMS has already established a meaningful use (MU) definition as required by the Health Information Technology for Economic and Clinical Health Act (HITECH), part of the American Recovery and Reinvestment Act of 2009. Physicians and hospitals who meet the meaningful use standard will be eligible for incentive payments in calendar 2011.

     The MU requirements touch on many services that in-patient pharmacists are involved in. But the actual technical specifications are not robust enough to account for pharmacist intervention. Specifically, the MU standard addresses only electronic prescribing and does not incorporate pharmacy quality measures approved by the Pharmacy Quality Alliance (PQA).  An example would be medication reconciliation. The MU standard does not square with the more expansive definition supported by members of the Pharmacy e-Health Information Technology Collaborative, the Joint Commission, and the Agency for Healthcare Research and Quality.

     The gold standard EHR, in the view of pharmacy groups, would include the Pharmacist/Pharmacy Provider EHR (PP-EHR) functional profile. The PP-EHR was developed by a joint Health Level Seven (HL7) and National Council for Prescription Drug Programs (NCPDP) work group and has been approved through the balloting process of both groups. But the PP-EHR has not been blessed by either an HHS-designated certification organization--there are three of these--nor has it been incorporated into EHR software. So in essence the CMS cannot require docs and hospitals to use this more pharmacy-rich EHR, at least not yet.

     Shelly Spiro, RPh, Director, Pharmacy e-Health Information Technology Collaborative, says she hopes the HL7 Pharmacists EHR functional profile (PP-EHR) obtains ANSI accreditation this fall. But many of the pharmacy management software vendors who would be expected to include the Pharmacist EHR profile functionality in their systems are focused on HIPAA 2 (NCPDP D.0), the new requirements that pharmacy  software vendors must comply with starting January 1, 2012. Moreover, she adds ruefully, "The system vendors have no incentive to incorporate Pharmacist EHR functionality into their software."

      ACOs do have an incentive to incorporate pharmacists into their coordinated care model. That is true. But whether pharmacists have much of an incentive to make ACOs work, that is a totally different question.