NCPDP Releases New White Paper on E Prescribing & Formulary Compliance

---Terri Bernacchi, PharmD, MBA,  President, Cambria Health Advisory Professionals

 

For the past 3 years, two workgroups associated with the National Council of Prescription Drugs has worked on a white paper to inform readers about the positive benefits (and related challenges) of the new “electronic prescribing” process.  I worked with this group personally.

The benefits of better record keeping, greater efficiencies and fewer errors due to physician handwritten prescriptions are associated with a technology that has also generated some new challenges.  For example, the group focused this paper on challenges relating to current processes between pharmaceutical companies who pay rebates based upon how formularies are implemented by health plans to offset costs. 

Interested parties will want to stay informed and work toward continued improvement in these processes, promoting a greater understanding regarding how this technology can be used to improve patient care, product selection, and still support business relationships. 

Just this week, NCPDP has released this daunting, but collaborative effort describing the following about e prescribing, formulary compliance and the manufacturer-payer trading partner relationships:   

ü  How the actual process of e prescribing works and the parties involved in the process. 

ü  That the contract language between manufacturers and payers is generally loose and proprietary.  This has fostered variability in some components of data exchanged in support of the invoicing and payment processes.

ü  That contracts between parties often establish rebate/discount eligibility based upon how therapy options are depicted in a formulary drug class, offering differential discounts based on whether rules have been properly applied in the formulary. (For example, a higher rebate is applied if the product is one of two in a preferred category, versus one of three.)

ü  These contracts may also employ language that spells out requirements regarding how the product should be displayed to the prescriber.

ü  That the process involves dynamic data used to illustrate, for any point in time, an accurate depiction of how a product or many products are depicted in any version of a Formulary, as well as how the patient’s benefit and coverage rules (including out-of-pocket, copay or co-insurance amounts) are impacted by the formulary.

ü  That formulary information is made available to EHR/electronic prescribing vendors with various levels of data elements supplied by processors/payers and plans, and at variable intervals.

ü  That formulary information is displayed in different ways by the vendors that support the electronic prescribing process. 

 

Interested parties can download a copy of the whitepaper here:  http://www.ncpdp.org/Whitepaper.aspx  

 

Terri is a Senior Partner at Valiant Health, LLC, and founder of Cambria Health Advisory Professionals.  The thoughts put forth on these postings are not necessarily reflective of the views of her employers, clients nor other Valiant Health colleagues. Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years of experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007.  She has both a BS and a PharmD in Pharmacy and an MBA. 

 

Advocating for the Individual in a World of RWE and CER

---Terri Bernacchi, PharmD, MBA,  Senior Partner, Valiant Health

The history of the Federal Food and Drug Administration is a fascinating story that balances the federal government’s actions in support of keeping the citizenry safe from snake oil salesman selling poison and the food and drug supply “pure” against the capitalist that drives innovation in the area of health care improvement.  The story of the FDA is one that will never be over but unless someone actually understands what has happened in the past and WHY certain official positions have been imposed, the beneficial nuances can be completely lost in the jargon.

For example, the FDA was charged with assuring that a manufacturer wishing to market a health, food, or cosmetic product in this country was SAFE.  Later, impositions regarding proving the “efficacy” of the product, in line with the manufacturer’s claims, were added.  This became of particular interest as health care financial risk was born by third parties, including the Government under Medicare and Medicaid payments. 

Now, CER (Comparative Effectiveness Research”) has taken the FDA’s scope of authority yet farther as the research manufacturers must assume before and after a product is launched involves establishing more than just, “Can I prove that this product is more effective than a placebo?”  Defined in various ways, CER is described by the IOM as “the generation and synthesis of evidence that compares the benefits and harms of alternative methods to prevent, diagnose, treat, and monitor a clinical condition or improve the delivery of care. The purpose of the research is to help consumers, clinicians, purchasers, and policy makers to make informed decisions that will improve health care at both the individual and population levels.”

The American Recovery and Reinvestment Act of 2009 (ARRA) and the ACA reignited the federal government’s interest in CER.

There is a cost (which is not surprisingly added to the cost of the product) to prove safety and a cost to prove efficacy.  When you go to prove comparative efficacy, you are risking that you will lose.  It’s tantamount to betting your bank account at the craps table in Las Vegas because you cannot really be sure which way it will turn out. 

In fact, this CER craps table, has become part of the requirement under new federal requirements but sometimes the forest is lost for the trees.   For example, the Forbes article linked below cites TWO studies on diabetes drugs that concentrated on Safety (being no worse than placebo) but said nothing about effectiveness.  At what cost?    The author concludes, “Rather than mandating narrow studies of cardiovascular studies, we should be encouraging studies that let us know which regimen is best for which patients, based on what they actually do for patients.” 

He does not recommend ignoring safety, he’s just looking for an equally important conclusion.  I am sure there are also CER studies underway to answer his question.  

http://www.forbes.com/sites/harlankrumholz/2013/09/03/is-no-worse-than-placebo-good-enough-for-new-diabetes-drugs/

The other perspective on this is from the Heritage article linked below, referencing that this concept in the UK resulted in a system whereby CER was used to reject certain treatments for mostly budgetary reasons.

“CER use in the U.K. has been a far cry from what is implied by the rhetoric used to promote PCORI. Rather than focusing on the individual needs of patients, the United Kingdom’s National Health Service (NHS) uses comparative and cost-effectiveness information to limit options as a budgetary tool.

The NHS offers health coverage to all British citizens and determines which treatments will be covered and paid for, and under which circumstances. Decisions are based on “recommendations” by the National Institute for Health and Clinical Excellence (NICE), who’s stated purpose is to create clinical guidelines and standardize care using cost-effectiveness information, but the NHS is required to adhere to all of the recommendations made by NICE.

If a treatment is not covered, patients are able to go outside the NHS and receive it privately without regulatory or statutory obstacles—if they are able to afford this. (Because of Medicare’s restrictions on private contracting, American seniors would not have this same option.)” 
http://www.heritage.org/research/reports/2012/04/comparative-effectiveness-research-under-obamacare-a-slippery-slope-to-health-care-rationing

Thus, the benefits of CER (which may derive clarity for the practitioner to apply to individual patients) must be weighed against the need to treat each patient as an INDIVIDUAL whose needs, wants, and situations may require the flexibility which a system conformed to the latest CER may not allow. 

  Terri is a Senior Partner at Valiant Health, LLC, and founder of Cambria Health Advisory Professionals.  The thoughts put forth on these postings are not necessarily reflective of the views of her employers, clients nor other Valiant Health colleagues. Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years of experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007.  She has both a BS and a PharmD in Pharmacy and an MBA. 

Seeing 2014 Through the Fog: Anticipating the Impact of Personal Incentives Under Obamacare

---Terri Bernacchi, PharmD, MBA,  Senior Partner, Valiant Health

So what is it?  Will premiums go up by double digits or will they go down?  Is it possible that for a small group of people in some states, premiums will go down, but for a larger group of people on some exchanges or in some states, the premiums may be fairly criticized as “sky-rocketing”? 

It’s really hard to understand if any side in the health care debate is completely lying when the news headlines on what is coming are so completely polar opposites.  Is it possible that recent media “spin” on Obamacare’s health exchanges are fairly characterized as “lies, deceit and untruth”?  The political stakes are high, to be sure, but as people ask you for advice on what to do in their own personal situation, it would certainly be nice to be able to go somewhere and actually “see through the fog” on their behalf.   My premise is this:  people will do what is in their best interest, assuming they can see it. 

On Friday, Senator Harry Reid admitted to a PBS audience in Nevada, that the Accountable Care Act was always just a step toward a public system, getting there by pushing private health care insurers out of business.   At least now, the truth seems to be coming out as some portions of the new law (widely panned by experts and consultants on all sides of the political spectrum as a failure in process.)

An article by CNN Money noted that under the health care reform act, insurers must offer a package of essential benefits -- including maternity, mental health and medications -- and they must cover all who apply. The imposition of these richer benefits will cause price hikes in some states where a lower cost, bare bones policy may have been sufficient for coverage for young, healthy people in the past. Isn’t it logical then, for a primitive student of human behavior, to predict that some young, healthy people won’t want to take on the increased cost because they don’t “need” the additional benefit or the additional cost?  They’ll pay the $95 per year or 1% of their income to avoid a cost that may be $3,000 per year or more. 

• “Our analysis found that 21-year-old men will pay a lot more for an exchange plan, but 42-year-old women and 62-year-old men will shell out less for a silver-level plan that comes with a $2,500 deductible and a roughly $25 co-pay for office visits.”

It may be that part of what must happen as this mess unravels is that we must better understand what happens in terms of individual incentives.  If a premium increase is unaffordable and if the individual has other alternatives (including doing nothing), then young, healthy people can be expected to forego coverage, and older/unhealthy people will sign up for lower cost coverage.  Predictably, then the exchanges will fail under the weight of insufficient premium to cover incalculable risk.  And people will be begging for something to be done. 

Is this, therefore, given Harry Reid’s recent comments, an unintended consequence of a well-meaning public policy or is it the success that was anticipated all along, leading the country to a federally controlled, single-payer system?  

Link:  http://finance.yahoo.com/news/where-obamacare-premiums-soar-095700316.html?CFID=24988291&CFTOKEN=70696857&jsessionid=2e302825861375967192417   

http://www.forbes.com/sites/theapothecary/2013/08/10/sen-harry-reid-obamacare-absolutely-a-step-toward-a-single-payer-system/

Terri is a Senior Partner at Valiant Health, LLC, and founder of Cambria Health Advisory Professionals.  The thoughts put forth on these postings are not necessarily reflective of the views of her employers, clients nor other Valiant Health colleagues. Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years of experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007.  She has both a BS and a PharmD in Pharmacy and an MBA. 

Health Care Reform as a Technology Innovation Stimulus

---Paul Dausman, CEO, Valiant Health  See also http://www.valianthealth.com/blog/health-care-reform-as-a-technology-innovation-stimulus/

The regulatory and compliance requirements emanating from the Affordable Care Act, coupled with incentives for providers to move manual processes to automated ones has stimulated the growth of technology and service vendors to enable health care businesses to stay in the game.  Some entrepreneurial vendors are aiming their innovative solutions at the patient; others are focused on the doctor’s office and the information which is needed while care is being rendered.  Many are focused on cost management, fraud detection, or waste reduction at the population health or plan level.    

It has occurred to me, however, that solutions that consume the publicly available data and that data gathered by the doctor or member at the point of care will afford only a part of what is needed. 

In fact, the change (as described in the New York Times Opinion piece link below) that is coming will require a complete re-engineering from the top to the bottom of the existing health plan and provider care models.  Healthcare Performance Management (HCMP) systems will enable all parties within a program to be on the same page in terms of developing priorities and sound action plans. 

Thomas L. Friedman noted in his NYT article that while the US has had the best but most expensive health care in the world, the goal of the new health care law is to “flip this fee-for-services system (which some insurance companies are emulating) to one where the government pays doctors and hospitals to keep Medicare patients healthy and the services they do render are reimbursed more for their value than volume.”

Proving that the “flip” is successful or just “cheaper” is going to require data, fed into HCMP systems that will shine a light on what health care organizations need to do first and whether or not they are risking failure over the course of time in any specific measurable area or for any specific patient.

http://www.nytimes.com/2013/05/26/opinion/sunday/friedman-obamacares-other-surprise.html?ref=thomaslfriedman&_r=1&

Paul Dausman is the CEO of Valiant Health, LLC, and has an extensive history as an entrepreneur in the health care and information technology areas.

Dueling Data Games: Demographics vs. Provider Patterns?

---John Campo, Vice President, Business Development, Valiant Health  (see also http://www.valianthealth.com/blog/dueling-data-games-demographics-vs-provider-patterns1/)

Various forums like Health IT, academia, and the health care bloggers are abuzz with a fascinating, but controversial study released on May 28, 2013 that addresses the long held belief that some regions have wasteful medical practice patterns. The new paper concludes that individuals’ health differences around the country explain between 75 percent and 85 percent of the cost variations.  When the primary author, Dr. Patrick Romano, noted that “People really are sicker in some parts of the country,” he set in motion a debate with the conventional wisdom against the work of the Dartmouth Institute for Health Policy & Clinical Practice.  Dartmouth’s three decades of research has propagated a theory that regional differences in Medicare spending is mostly due to the aggressiveness of the medical community (and attributing it mostly to individual profit incentives).

The answer to this question is critical because it is driving CMS strategies to reduce Medicare spending.  The Institute of Medicine, at the request of Congress, is continuing to investigate the question.  

Regardless of whether the new study turns out to be correct or if the IOM substantiates the findings of the Dartmouth group, it makes for an interesting debate with high stakes in terms of CMS payment strategies.  Plans, ACOs, and all types of providers will be involved in looking at data in various ways like local/provider specific analyses to regional/national benchmarks.  Providers should expect to conduct patient and population level analyses and measure results, comparing them to expected norms and explaining the variances.

 This will be particularly important as providers and plans engage in any kind of pay-for-performance or risk sharing arrangements, such as those expected under Accountable Care Organizations.  They must have systems in place to offer point-counter-point perspectives that establish quality results and justify the occasional outlier.  Link for different perspectives:   

• http://www.healthcareitnews.com/news/pop-health-explains-medicare-disparities?topic=04,28,19
• http://www.kaiserhealthnews.org/Stories/2013/May/28/medicare-state-geographic-variation-costs.aspx

John Campo is responsible for Valiant Health’s growth, including client engagement and satisfaction. He brings over 15 years of diversified healthcare experience to Valiant Health. Prior to joining our leadership team, John founded and owned the CAMPO Group: Strategic Managed Care Consultants where he engaged leading pharmaceutical, biotechnology, specialty pharmacy, and health insurance clients. John’s background includes healthcare contracting, trade relations, reimbursement, specialty pharmacy distribution, quality improvement and Medicare. His leadership background includes working for a Fortune 500 PBM, HMO, and Specialty Pharmacy organization in leadership roles as well as being responsible for Managed Markets National Account Management for a large ethical US Pharmaceutical firm. He holds a BS in Business from Brescia University. 

Hospital Readmission Penalties Create Continued Policy Debate

---Terri Bernacchi, PharmD, MBA,  Senior Partner, Valiant Health (See also:  http://www.valianthealth.com/blog/hospital-readmission-penalties-create-continued-policy-debate/ )

 

A by-product of CMS’ cost reduction efforts associated with payment (or penalty) for quality results, is the much vilified Star Rating measure on All-Cause Hospital Readmissions. These efforts hit the Medicare Advantage plan’s Star Ratings results but also impact hospitals Medicare reimbursement rates directly. 

Two-thirds of hospitals are now facing readmission penalties totaling approximately $280 million in 2013, according to experts.  These 2,271 U.S. hospitals were found to have readmission rates higher than the CMS models predicted, and each of them will receive a penalty this year, as high as 1% of their reimbursement for Medicare patients. (Penalties will increase to 3% by 2015.)

The number of hospitals penalized is much higher than most observers would have anticipated on the basis of CMS's previous public reports, which identified less than 5% of hospitals as outliers.  (See NEJM Article by Drs. Karen E Joynt, MD & Ashish K. Jha, MD)  Path Forward on Medicare Readmissions at http://www.nejm.org/doi/full/10.1056/NEJMp1300122 )

The debate includes concerns that the safety-net hospitals caring for a higher proportion of members with socio-economic challenges are those least able to afford a penalty. Most agree, however, that setting a lower quality standard for these hospitals would not be ideal.   Many hospitals (and associated Medicare Advantage Plans) now have placed special focus on “helping patients make the transition from inpatient care to outpatient or community settings”.  A key part of this coordination is the ability to identify and intervene early in the hospitalization and post-discharge course.

See Links:  http://www.chrt.org/blog/the-aca-and-the-hospital-readmissions-policy-debate/

          http://www.nytimes.com/2013/03/30/business/hospitals-question-fairness-of-new-medicare-rules.html?pagewanted=all&_r=0

Terri is a Senior Partner at Valiant Health, LLC, and founder of Cambria Health Advisory Professionals.  The thoughts put forth on these postings are not necessarily reflective of the views of her employers or clients nor other Valiant Health colleagues. Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years of experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007.  She has both a BS and a PharmD in Pharmacy and an MBA. 

Health Systems Around the World Could Learn From MA

John Campo, Vice President, Business Development, Valiant Health (See: http://www.valianthealth.com/blog/health-systems-around-the-world-could-learn-from-ma-plans/)

A new study by the Boston Consulting Group (BCG) suggests that health systems around the world can learn a lot from the care-delivery models used by private payers in U.S. Medicare Advantage plans. 

BCG concluded that Medicare Advantage plans, which impose classic managed care techniques to an elderly population, as compared to traditional Medicare fee-for-service plans, vary in a couple of key ways. 

1. Focused on mechanisms designed to encourage the delivery of cost-effective quality care
2. Identify  and focus on clinical best practices
3. Tap into a selective network of providers
4. Apply active care management strategies based on prevention to minimize expensive acute care

BCG’s study included an analysis of claims data for 3 million Medicare patients. They concluded that on three internationally accepted dimensions of health care quality—single-year mortality, recovery from acute episodes of care requiring hospitalization, and the sustainability of health over time—patients enrolled in Medicare Advantage plans had better outcomes than those participating in Medicare on a traditional fee-for-service basis.

Medicare Advantage plans in the US are under continued scrutiny to “prove” quality by meeting established benchmarks for various domains, including patient satisfaction, quality outcomes, access to care, and use of preventive services.  MA plan executives are faced with fee reductions if quality metrics are not met under “Star Ratings” programs imposed by CMS.

See Links:  http://finchannel.com/Main_News/Business/127573_Managed_Medicare_Advantage_Plans_Demonstrate_Better_Outcomes_for_Patients/
http://www.bcg.com/media/PressReleaseDetails.aspx?id=tcm:12-134145

John Campo is responsible for Valiant Health’s growth, including client engagement and satisfaction. He brings over 15 years of diversified healthcare experience to Valiant Health. Prior to joining our leadership team, John founded and owned the CAMPO Group: Strategic Managed Care Consultants where he engaged leading pharmaceutical, biotechnology, specialty pharmacy, and health insurance clients. John’s background includes healthcare contracting, trade relations, reimbursement, specialty pharmacy distribution, quality improvement and Medicare. His leadership background includes working for a Fortune 500 PBM, HMO, and Specialty Pharmacy organization in leadership roles as well as being responsible for Managed Markets National Account Management for a large ethical US Pharmaceutical firm. He holds a BS in Business from Brescia University.