2016 Summer Newsletter- Pharmacy Pay-for-Performance Networks

The recent push to focus on value-based healthcare through accountable care organizations (ACOs) is changing incentives for physician practices and health care systems. Incentivized care is also now moving into the pharmacy world.  With more focus than ever on managing outcomes, improving adherence, and preventing adverse reactions, pharmacies are becoming contractually responsible for whether or not patients meet their goals.

Star Ratings have measured patient outcomes in Medicare Part D for almost ten years. There are five active pharmacy-based performance measurements from the Pharmacy Quality Alliance (PQA).  These measurements include:

  1. Adherence for oral diabetes medications
  2. Adherence for cholesterol medications (statins)
  3. Adherence for blood pressure medications (renin-angiotensin system antagonists)
  4. High-risk medication use in older adults
  5. Appropriate treatment of blood pressure in patient with diabetes

Although pharmacists have been dealing with adherence and safety issues for many years, pay-for-performance models put new focus on these issues by providing direct financial incentives or disincentives.  Medicare plans have been using adherence ratings to help determine eligibility for preferred pharmacy networks, and the commercial world is now looking to adopt these metrics as well.  Using Pharmacy Quality Solutions’ (PQS’s) Electronic Quality Improvement Platform for Plans and Pharmacies (EQuIPP) system, pharmacies can track their performance, and health plans can provide bonuses to the top pharmacies.

CVS/Caremark Silver Scripts plans implemented Pay-for Performance in 2014 when they provided bonus checks to pharmacies who out-performed their competition.  The pharmacies were evaluated using four of the star measures, and the plan paid bonuses based on the pharmacies’ scores and number of patients served.

Another bonus-based plan, the Inland Empire Health Plan (IEHP) instituted one of first large-scale pay-for-performance pharmacy programs.  Working with PQS, the California health plan has enacted eight measures that track adherence, asthma control, generic dispensing rate, and use of high-risk medications in the elderly.  In this rewards-based system, pharmacies receive points when they meet or exceed the benchmarks, and the plan’s payout to the pharmacy is based on the points received.  Pharmacies who do not meet the benchmarks are not penalized, but they do not receive additional rewards payments.  This well-laid out plan may serve as a model for other pay-for-performance payers, since the benchmarks are easy to follow, and the EQuIPP system makes it simple for pharmacists to track their progress on an ongoing basis.  Click here to read more about the IEHP’s 2015-2016 pay-for-performance plan.

Recently, Humana announced an amendment to their Pharmacy Provider Agreement covering the 2017 part D plan year.  Humana plans to withhold $5 from each eligible claim and then provide pharmacies with the opportunity to earn Pharmacy Performance Payments based on achieving the three adherence measurements noted in the above list (adherence to diabetes, cholesterol, and hypertension medications).  Pharmacies not wishing to participate will be considered out-of-network.  Humana notes that the “percentile performance” will be evaluated for each pharmacy based on the number of members they service in each measure.  Unlike the Inland Empire Health Plan described above, Humana’s plan financially penalizes pharmacies until they show they can achieve adherence results, which may be outside of their control.  Humana will payback, or potentially reward, the top-performing pharmacies. Pharmacies need to be in the top 20 percentile to earn an incentive payment.  Pharmacies below 50% will be penalized, as they will not receive any of the amount withheld.  Although PHSI is not against pay-for-performance pharmacy plans, PHSI fears that redistribution vs. reward pay-for-performance plans may disadvantage pharmacies serving at-risk patients.

It is important that pharmacies are now being viewed as more valuable team members in helping to ensure medication adherence.  However, PHSI feels that it is important that adherence be viewed from a shared stakeholder perspective.  No one healthcare segment is solely responsible.  For example, although a pharmacy may wish to keep a patient compliant on their medication, without a refill authorization from a physician, this may not be possible.  Physicians and pharmacists must work together to truly improve these metrics, and health plans need to consider this collaboration when structuring their rewards programs.

As more pay-for-performance models emerge, pharmacies must decide whether to participate and if so, how to handle these patients.  Pharmacies may wish to flag those patients affect by adherence measures to increase their standards of care for that population.  While it is doubtful that care would fall for patients not enrolled in one of these networks, if the incentives to perform well in a pay-for-performance network are high enough, this could elevate the level of care for targeted patients, creating an unintended consequence of two levels of patient care.  As more rewards-based plans and redistribution models emerge, expect other health plans to test new incentive strategies in the near future.