Thursday, December 31, 2009

HR 3590 and the AMP fix (even more exciting subject matter)

Just a quick note on the supposed "fix" to the Average Manufacturer Price calculations and its impact on the economics of pharmacy.

HR 3590 establishes that the Federal Upper Limit (FUL) shall be no less than 175 percent of the weighted AMP for purposes of medication reimbursement calculations. I've already commented on the problems with the weighted AMP in a previous post.

Does defining the FUL really do anything for pharmacy?

I've looked at the contracts before. I've never seen FUL mentioned in the calculations for reimbursement. All I've ever seen are:
  • Federal MAC
  • WAC
  • AWP minus
  • GEAP
  • Insurer's MAC

All of these *plus* a dispensing fee of $1.75-3.75.

As I see it, this fix does nothing. The insurers are going to continue to reimburse us with the existing formulas and we are going to continue to bleed each and every time we dispense a prescription. With more people supposedly getting coverage through government funded plans, we will see an increased number of opportunities to bleed.

If HR 3590 really wanted to address pricing issues, it would specify which reimbursement formulas that the insurers must use for government funded health plans. Tack on a realistic dispensing fee and maybe we have something.

This concludes today's post.

Tuesday, December 29, 2009

Two page health care bill

The whole health care debate has focused on getting health care for the uninsured. In an effort to address this, the Congress of the United States has passed a bill that is over 2000 pages long that still doesn't cover everybody.

It covers more, but not all.

If you really want to ensure access to health care, let providers deduct charitable care on their taxes. Maybe at rates that are a percentage of the established Medicare/Medicaid rates for the services.

Think about it, right now Joe goes to the ER with the sniffles. He gets triaged and sent back to a room. The ER doctor sees him and writes out a script for amoxicillin. Joe goes to pharmacy to fill script. Complains to pharmacist about the high cost of the script (six bucks). Pharmacist thinks how the heck is he going to pay for ER visit? Oh yeah, Joe is uninsured. Both the hospital and ER physician must absorb the loss.

Under my plan, both the hospital and physician get to deduct the cost of Joe's care. On April 15, the ER physician doesn't have to send Uncle Sam as much in taxes due to his charitable service.

Some local primary care physicians see that Dr ER keeps more of his income, so they decide to see some uninsured patients as well. The primary care doctors are able to identify some health issues and address them before they become emergencies. Pharmacy gets in on the act and delivers some charitable care by offering medications at either no cost or at a reduced price, taking the tax break.

Now Joe is able to see the same physician on a regular basis to have his medical needs addressed. The ERs are less crowded, seeing the true emergent cases. More hospitals stay open because they aren't losing money from seeing the uninsured. Hospitals aren't charging $14 for a Band-Aid to help make up for the losses they would have otherwise incurred. Granted there would have to be limits on how much charitable care could be claimed without being audited.

There you have it folks... health care reform in less than two pages. When converted into Congress-ese it might be ten pages. The federal government would still foot the bill as there would be a reduction in gross tax revenues, but I think it would be considerably less than the umpteen kabillion dollars that are going to be spent on HR 3590 if it becomes law.

Sunday, December 27, 2009

HR 3590 and MTM (I know... interesting subject matter)

On the morning of Christmas Eve, the United States Senate voted to approve HR 3590, the health care reform bill. Now all that is left is for the Senate and House to reconcile the bill and send it to the President for his signature.

If you visit the APhA website, you'll see the organization applauding the inclusion of MTM services in the bill. We all know that Medication Therapy Management is their thing. But does the inclusion of MTM in the bill really do anything to advance the profession of pharmacy?

The APhA statement following the passage of the bill, the APhA says that it supports the provisions of the bill that:
  • expand patient access to pharmacist clinical services
  • ensure patient access to medications
  • ensure a viable pharmacy infrastructure
  • improve the Medicare D MTM program

Looking at the language of the text of the bill, I do like seeing that the bill specifically states "pharmacist-delivered MTM services". From what I read, that means call center nurses who work for the insurance company can't provide the MTMs. It means that the call center pharmacists who work for the insurance company get to do it instead.

I would like to see the opportunity to provide the MTMs to be offered to the community pharmacists first. We are the ones who see the patients every day. We know their faces. We know their situations. We know their histories. We know that they tried their spouses cholesterol medication when they ran out of their own. We know how bad of an idea that was, too.

To a call center pharmacist, they are a chart. The call center pharmacist is going to suggest alternatives for the patients that didn't work five years ago when the patient was insured by the local plant. The fact that a clinical pharmacist recommends it doesn't mean that it is going to work now. There is no provider-patient relationship established.

After the call, the patient is going to come to the local pharmacist and ask about the call. More than likely, the local pharmacist will reassure the patient about the recommendations, only the local pharmacist won't get paid for the time spent with the patient (and get backed-up on their dispensing functions).

I would like to see a business model where medication therapy management is incorporated into practice and is self-sustaining. Everything that I have seen on MTM practice settings is in academia (funded by grants), clinics (funded by government), or as an add-on to retail services (funded by the dispensing functions of the pharmacy).

Once we see that MTMs are a viable business model, I think you'll see more pharmacists get on board with it. But for now, MTMs just don't cut it and I think most would agree that it just isn't doing anything to advance the practice of pharmacy for those of us who see the patients on a daily basis.

Wednesday, December 16, 2009

H1N1 Vaccine recall

In honor of the recall of the 800,000+ doses of pediatric H1N1 vaccine:

I've got a few topics I'm working on for future posts, but with my kids' basketball games and the holidays, there's not enough hours in the day to develop a good post. Plus I'm trying to get another Drug Topics article written.

Friday, December 11, 2009


I'm glad Gov Ted Strickland and the others in Columbus view pharmacy as a vital business entity in the state of Ohio. Dropping our dispensing fees will really help to keep pharmacies in business.

Thanks, Ted.

You have my vote next election.

Thursday, December 3, 2009

More on HR 3590

Well, I've pulled up Section 2503 of HR 3590 to take a look at how the federal government is going to try to reign in prescription medication expenses for the Medicaid program. Does it surprise any pharmacist out there that the legislation is worded in such a manner that we will basically get the shaft when it comes to reimbursements for Medicaid prescriptions?

In the legislation, the federal upper limit is defined as "no less than 175 percent of the weighted average... of the most recently reported monthly average manufacturer prices..."

There are a couple problems that I see with this.

First, for calculating the FULs, HR 3590 includes the following text: "The Secretary shall implement a smoothing process for average manufacturer prices."

Do you know what that means? It means that the government can fudge the AMPs to whatever it wants. The Secretary is directed to do so. And there's not a darn thing we can do about it except drop out of the contract.

Secondly, it mentions the most recently reported average manufacturer prices. How much lag time is there going to be in these reports. Last year when generic Micro-K 10mEq was in short supply I called one of the insurance companies to have them review the reimbursement levels as my pharmacy was losing over ten bucks per script. Their response... we review AWPs and MACs on a quarterly basis. Do you think that the federal government is going to respond to price changes in a more timely basis? This pharmacist doesn't think so.

So I'm going to question the APhA as to why they are not addressing this issue with the sponsors of the bill. I can't find anything at the website to make me think that they are even paying attention to the bill. I mean except for applauding the legislators for including the almighty MTM in the bill.

Pharmacists, pay attention to the bill.

Read the bill.

Our profession may hang in the balance.

Friday, November 27, 2009

A new trend?

Imagine this... just when the United States Senate is preparing to debate the health care bill that was sent over by the House, one of the leading health care providers in the country decides to no longer accept medicare payments. Granted, this is at a single facility but it may become the norm as a government option is becoming a very real possibility.

So what is happening? A branch of the Mayo Clinic will stop accepting payments from Medicare after the turn of the year. Here's the link.

But why would anybody opt out of a contract with the government?

Ummm.. the article tells you exactly why
  • Low payments
  • Slow payments

Personally, I'm happy to see a provider step away from a contract that loses money. It's not a good business model to operate at a loss. I took one economics/business class during my second year of college and if I learned anything it was that you can't continue to run a business if continually loses money.

If only somebody in the pharmacy world would take a look at insurance contracts before just blindly signing on the dotted line. At my previous position, our wholesaler offered a service where they took care of all of our third-party contracts. Nobody at my company even looked at the terms before we were locked into another year of the take-it-or-leave-it terms dictated by the insurance company. And then they wonder why reimbursements are falling.

Pharmacists need to speak up when they see the piss-poor reimbursements from the insurers. Between the $4 generics and the free antibiotics, we're digging ourselves into a hole.

When an insurer sees that one provider is willing to provide a product or service for a low fee, the insurer starts steering the contract language to drive our reimbursements down to that level.

We, as pharmacists, think that we are being competitive by driving our prices down. We think that lower prices will attract more patients, which in turn will increase revenue. We are playing into the hands of the insurance companies. They have teams of accountants, actuaries, and lawyers whose jobs are to decrease the insurers expenditures. Who's looking out for us? Sally at Drug Wholesale Company?

The point of this post is this... we can have a pie-in-the-sky view that people want to pay us based on our clinical knowledge, and that can be our end goal. But right now, our services are tied to a product. And we need to make sure that the reimbursement for the product includes an adequate fee for our clinical skills that we use on each and every prescription that crosses in front of us. If the contract isn't good enough, we don't need to sign it.

Mayo Clinic, I applaud you for having the boys to pass on an poor contract. Hopefully more providers follow your lead.

Monday, November 23, 2009

Hey hey's the APhA

Picture Fat Albert saying the title of this post. It might be amusing. It was for me.

But that's not why I wanted to talk today.

I want to address the impact of the largest organization representing pharmacists on the legislation in front of the United States Senate.

The American Pharmacists Association has a nice building located on the Mall in Washington DC, between the Lincoln Memorial and the Department of State. Being located where it is, you would think that the folks at the APhA might be able to have a little influence on the legislative branch of our government.

Based on the text of HR 3590, I would have to give the APhA a failing grade. HR 3590 is 2074 pages of legislation that is supposed to change the way health care is delivered in the United States.

Pharmacists like to think that they are an integral part of the health care system in the United States. We deliver the medications to keep people alive and healthy. We educate the public on the correct use of their medications. After hours and on weekends, we triage people who don't know if their illness/injury is severe enough to warrant a trip to the urgent care center or emergency department.

We are the most accessible health care providers out there. We give our services away for free. Any money that comes our way is tied to a product that we dispense in the terms of a dispensing fee. For the most part, our professional expertise does not generate any revenue.

So when a two-thousand seventy-four page bill is introduced to the Senate and the APhA has a physical presence in the nation's capital, I would expect to see some things in the bill that would advance the professional side of the profession.

Ummm... not in this bill.

I saved the document in .pdf form and searched for the word pharmacist. In a 2074 page bill, the word pharmacist appeared on 14 pages. Seventeen is the total number of times that pharmacist actually appears.

Of those seventeen times that pharmacist appears in the text of HR 3590, nine times it appears in a list of health care professionals. So over half of the time that pharmacist appears in the bill, it is surrounded by other terms like dentist, nutritionist, nurse, etc...

Just for comparison, the seventeenth occurrence of the word physician occurs at the top of page 13 of the table of contents. Wonder whose lobby was more effective for the health care bill?

But back to pharmacist.

Of the remaining eight times that pharmacist occurs in the bill, seven are tied to Medication Therapy Management (MTM). Since the inception of the MTM programs, I have been contacted a whopping two times to conduct an MTM interview by the PDP providers. Hate to tell you this, APhA, but MTM isn't exactly generating a whole lot of business in my corner of the pharmacy universe. I'd rather see the APhA work on something like dispensing fees that are more than $2.50 on a thousand dollar script.

Wouldn't it be great if dispensing fees were tied to the relative danger of the medications. Dispensing the new TNF blocking medication? Get a higher dispensing fee since you will spend a lot more time counseling the patient on the medication. Basically, if the drug has a MedGuide, the pharmacist receives a higher dispensing fee.

But back to HR 3590.

The final occurrence of pharmacist occurs in a section 3502 of the bill that establishes "community health teams to support the patient-centered medical home". In this section we get to provide medication management services, including medication reconciliation. Doesn't sound like any great advances in the practice of pharmacy.

I don't know a whole lot about the lobbying thing in DC, but the APhA doesn't seem to be doing a very good job of it. Or doing anything to help the individual pharmacists out in the real world.

If the APhA wants to truly impact patient care, they need to get higher dispensing fees for those of us practicing in the real world. If we make a decent margin on our scripts, we'll be able to hire more people and provide better pharmaceutical care. But until the pharmacy organizations in DC step up to the plate to push for this, those of us in the retail world are going to continue practicing Burger King pharmacy.

APhA, from what I see in HR 3590, you aren't exactly impressing the folks on Capital Hill. As of right now, I won't be renewing my membership.

If you want to speak to a real pharmacist email or tweet me and maybe you can see what those of us in the real world expect out of the American Pharmacists Association.

Wednesday, November 18, 2009

Copay cards

In the most recent issue of Drug Topics, an article that I submitted several months ago was published. It was on the topic of copay cards. Here's the link.

The email response that I have received has been far more than I expected. It appears that pretty much every pharmacist that has responded has been in agreement.

Several pharmacists have pointed out that many contracts with insurance companies prohibit anything that will reduce the adjudicated copays. That got me thinking...

The copay card that was the inspiration for the article was the Lipitor card. The largest insurer in my local area distributed these copay cards to all of their enrollees who were taking Lipitor at the start of the benefit year.

I'm just wondering how long it is going to be until this insurance company audits the smaller pharmacies in my area and recoups all of the payments it has made to the pharmacies for Lipitor since the program began, in addition to any and all penalties that may be levied against the pharmacies.

I'm not saying that the insurance company may have planned it this way.

But I'm not not saying it either.