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Pharmacists test payment model based on outcomes

MANAGED CARE June 2011. © MediMedia USA
Compensation Monitor

Pharmacists test payment model based on outcomes

MANAGED CARE June 2011. ©MediMedia USA

A new payment model at the School of Pharmacy and Health Professions at Creigton University demonstrates that high performance health care can be delivered by pharmacists — and they can get paid for it. In other words, a pay-for-performance (P4P) model was adopted, and compared with the traditional fee-for-service model.

The P4P model could pay 20 percent more than the FFS model. If patients achieved evidence-based outcome goals for specific conditions, pharmacists could earn an additional 43 percent.

“We were not looking to find an ideal pay-for-performance model in pharmacy practice, but what we wanted to do was to create a model to stimulate discussion,” says Thomas L. Lenz, PharmD, MA, associate professor of pharmacy practice and lead researcher.

Specific patient outcomes were collected over 12 months. It uses an all-or-none bundled approach for payment in which the pharmacist is paid at a higher rate if patients meet six outcome criteria after one year.

The authors emphasized that this model would be important to payers because it is based on patient outcomes and pre-established return-on-investment models.

In 2010, 15 participants with risk factors for cardiovascular disease were followed. A guaranteed rate of $2.50 per minute per patient was applied, earning the pharmacist a total of $14,625 (390 minutes x $2.50 x 15). In addition, the 11 patients who met all six outcome criteria earned pharmacists a bonus of $1/minute/patient — $4,290 per year. That brought the total payment to $18,915 for year 1.

In the second year, a guaranteed payment rate of $2.50 per minute per patient was applied to all 15 participants. That worked out to $5,625 (150 minutes x $2.50 x 15). Those who eventually achieve all six outcome goals would earn the pharmacist an extra $1/minute/patient — an extra $2,250 per year, bringing the total payment to $7,875 for year 2 and each year thereafter.

“In year 1, a pharmacist spends more time with these patients if he’s participating in a P4P program to establish positive health behaviors. Subsequently, the pharmacist’s payment is higher,” Lenz says.

“After the first year, the amount of time spent with each individual is less because we are helping them maintain their behaviors, but our reimbursement is still higher than the traditional model.”

Comparing payment rates for FFS and P4P models
Traditional FFS-MTM model P4P-MTM/lifestyle medicine model
Year 1
Number of patient visits/year 12
Total time/patient/year (minutes) 195
Payment rate/minute $2.00
Payment/patient/year $390
Year 1
Number of patient visits/year 11
Total time/patient/year (minutes) 390
Payment rate/minute $2.50–3.50
Payment/patient/year $975–1,365
Year 2
Number of patient visits/year 12
Total time/patient/year (minutes) 195
Payment rate/minute $2.00
Payment/patient/year $390
Year 2
Number of patient visits/year 4
Total time/patient/year (minutes) 150
Payment rate/minute $2.50–3.50
Payment/patient/year $375–525

Source: Lenz TL, Monoghan MS. Pay-for-performance model of medication therapy management in pharmacy practice. J Am Pharm Assoc. 2011:51(3):425–431.