The Changing Landscape In Reimbursement For Pharmacy Services

A long-standing barrier to the establishment of clinical pharmacy services in outpatient settings has been the lack of reimbursement models congruent to the level of services provided by the clinical pharmacist.

To date, pharmacists and practice managers have exercised creativity in finding funding sources for pharmacist-provided clinical services. Billing models have included incident-to billing, and the use of medication therapy management and transitions in care billing codes.

However, these billing schemes alone do not generate enough revenue to offset the cost of a pharmacist, and until recently the solutions proposed have always involved financial support from an affiliated school of pharmacy and/or supplemental grant funding.

In 2011, Medicare Annual Wellness Visits (AWVs) were created and now provide a new potential source of revenue for pharmacists in practices willing to implement them. In the absence of provider status for pharmacists, new models incorporating visit types with increased reimbursement are desperately needed to expand clinical pharmacy services.

How are we doing it?

Medicare Annual Wellness Visits (AWVs)

The Patient Protection and Affordable Care Act of 2010 created a new wellness visit for Medicare beneficiaries focused in preventive care. These AWVs are covered at no cost to the patient, but reimburses the practice at the same rate regardless of the provider of the service.

With reimbursement rates ranging from $140-210 for initial AWVs, and $100-140 for subsequent AWVs (2), these visits are a significant potential revenue generator for pharmacists. If a clinical pharmacist is able to see 1070 patients for AWVs annually, enough revenue could be generated to support the pharmacist position.

Providing these visits is well within the scope of pharmacists practice. Components include a health risk assessment by the patient, collecting medical history including social and family history, obtaining vital signs, completing cognitive screenings, providing a personal prevention plan, and reviewing medications.

The medication history presents an opportunity for pharmacists to review all medications taken by Medicare patients. By incorporating patient-specific medication recommendations into the AWV, patients not only experience a new facet of interdisciplinary patient care, but physicians can rest assured that their patients’ medications are being reviewed for appropriateness each year.

Incident-to billing

Incident-to billing has provided an outlet for pharmacists to bill at lower levels, and obtain some reimbursement for services. However, actual reimbursement for these level visits are estimated to be only $19, and even for high volume clinics, revenue generated is not nearly enough to support the pharmacist.

Transitions-in-care codes

In recent years, Medicare has taken particular interest in streamlining transitions in care. In 2013, two new transitional care management (TCM) billing codes were created. While there are specific requirements, including a transitions-focused follow-up visit with a physician, pharmacists can play a pivotal role in providing medication management through these often sensitive and challenging care transitions. Depending on the acuity of the patient, these encounters can reimburse as much $230 per visit.

Medication therapy management codes

Since 2003, pharmacists in community settings have had the opportunity to provide medication therapy management services under the Medicare Modernization Act. Many private insurers have adopted this service as well, and based on variable inclusion requirements, patients may have their medications reviewed by a pharmacist periodically.

Provider status: HR 4190

At the root of our challenges with billing and reimbursement is the lack of pharmacist recognition as health care providers. While pharmacists continue to creatively make do in our current financial environment, legislation allowing for appropriate reimbursement of pharmacy services is essential in expanding pharmacy presence, particularly in outpatient settings. HR 4190 is a bill that has been introduced in the House of Representatives in March 2014 proposing an amendment to the Social Security Act that would recognize pharmacists as billing providers.

The changing landscape of primary care will require much more clinical expertise from the pharmacy workforce, as family practice and internal medicine physicians will not have the capacity to care for our aging population.

However, lack of sufficient funds to support these important services creates an enormous barrier to providing services that can help ease this patient care burden. Pharmacist-led AWVs create a new and unique opportunity to generate significantly more revenue for practices than traditionally was done, but pharmacists recognition as health care providers will be instrumental in expanding services, especially to resource-limited areas.

Irene Park