AMCP’s Pay-for-Performance Principles

The Academy of Managed Care Pharmacy (AMCP) outlined key principles regarding the utilization and optimization of the pay-for-performance model in their recent article titled “AMCP Pay-for-Performance-Based Reimbursements and Direct and Indirect Remuneration (DIR) Fees.” AMCP recognizes the importance of the services provided by pharmacists and supports the utilization of payment arrangements for pharmacists. These include performance-based metrics related to pharmacists’ services. The principles provided by AMCP are designed to act as a framework from which a fair and effective pay-for-performance agreement can be reached to improve patient outcomes.

AMCP provides lengthy explanations and details surrounding their thirteen principles, but the paraphrased principles are as follows:

  1. Use of “fair, attainable, and meaningful” criteria that applies to the type of pharmacy in the pay-for-performance agreement
  2. Adoption of a core set of standardized pharmacy performance measures based on unanimity from pharmacy providers, pharmacy benefit managers, health plans, and other stakeholders by Medicare Part D
  3. Recognition of health equity, socioeconomic disparities, size, geography, and patient demographics reflected in the benchmarking performance of a pharmacy
  4. Performance-based contract with “transparent, clear, and concise” provisions that are readily available and accessible to all parties in advance of any performance measurement period
  5. Unambiguously defined specifications of the measurements included in the contract
  6. Precisely defined organizational level at which metrics will be calculated and compared
  7. Agreed upon plan for collecting, integrating, and analyzing required performance data, including who is responsible for the analysis and payment of the data collection and utilization
  8. Consideration of adjusting pharmacy reimbursement rates to compensate pharmacies for the infrastructure required to collect the data necessary to meet performance-based contract requirements
  9. Performance-based price concessions are both important and necessary to pay-for-performance programs
  10. Fees due to pharmacy performance should be based on acknowledged, fixed metrics
  11. Price concessions should never be structured as “claw back” where a pharmacy would owe payment for a prescription product back to the payer
  12. Performance-based reconciliation should be completed no later than 90-days post-plan year
  13. Preferred pharmacy networks are a crucial tool for lowering patient costs and improving patient outcomes

The principles and pay-for-performance contracts are not without challenges that will need to be addressed by all stakeholders. For example, there are a multitude of ways to measure a pharmacy’s performance. One of which is outcomes-based measures that focuses on the health of a patient resulting from care. A concern here is that a pharmacist can do everything correctly and appropriately, but poor outcomes can still occur. They can educate a patient on the importance of medication adherence or lifestyle modifications, but the patient must act for their own health. Having a performance-based contract that relies in part on a patient’s decisions could be problematic. Another measure of performance is patient-reported outcomes that relies on the input of a patient via a survey. Patients may be asked about quality of life, symptom burden, health-related behavior, and satisfaction with their pharmacy. This method may be prone to negative bias, which would not reflect the true patient experience at the pharmacy. Pharmacies do not have a standardized set of metrics and reporting mechanisms. This means that the mechanisms and metrics required of a pharmacy could vary based on the payer, leading to large investments in the infrastructure required for data reporting. The large investments in data infrastructure without a standardized method of collecting and reporting the data and metrics could create greater cost on the shoulders of patients, which could negatively impact patient outcomes.

AMCP fully supports engaging in pay-for-performance agreements. They help to lay out principles upon which a fair and equitable agreement can be made. There are challenges to these agreements that are impacting pharmacies financially today. How do you envision pay-for-performance agreements evolving in the future?


Posted: June 2022

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