As 2015 draws to a close I would like to use this issue of the Visante Insider to thank all of our friends, colleagues and clients who have helped us make this year the most successful in Visante history. We have thoroughly enjoyed the opportunity you have afforded us to help you advance your programs across a wide variety of practice sites and venues and we greatly appreciate the trust and confidence you have placed in us. We share your commitment to high performance health care and are honored to be a small part of your journey.
Looking ahead, we are excited to continue our existing relationships and to begin new ones. 2016 promises to be an exciting year and I would like to share some of our perspectives on what that might bring.
Influences and Trends
Presidential election campaigning will be in full force, and healthcare is once again expected to be a major battleground. Since the last presidential election, the major provisions of the Affordable Care Act (Obamacare) have taken effect. Prior to the ACA it was estimated that 50-55 million people in the US were without healthcare insurance. Of that number, it was estimated that 30-33 million would be eligible for some form of health insurance coverage under the ACA. Currently we have approximately 17 million of those eligible uninsured enrolled and expectations are that an additional 16 million will be enrolled within the next two to three years.
Repeal of the ACA is the stated position of all Republican presidential candidates. Unfortunately, the alternatives offered by this group are highly unspecific—and if implemented “as is” very likely to radically reduce the coverage currently provided under the ACA. While the overall implementation and operation of the ACA leaves much to be desired, the extension of health insurance coverage and the movement toward accountable care with an outcomes-based focus have been long overdue.
We can’t afford to spend 18-20% of our GDP on healthcare while at the same time ranking 38th worldwide in health outcomes. We need a better system of patient access and coverage resulting in improved outcomes, and at reduced costs. With medications as a major contributor to costs we can expect scrutiny on this element from the Democratic side. The recent pricing debacle surrounding the 5,000% price increase for Daraprim by Turing has provided additional fuel for the debate. In the wake of the Turing controversy, both Hillary Clinton and Senator Bernie Sanders have announced plans to control drug costs as a part of their presidential campaigns. Bottom line, healthcare will once again be center stage in presidential election politics.
Here is our “Visante Top 10” list of areas of focus for our clients and ourselves.
1. 340B Mega Guidance Impact
With the release of the 340B MegaGuidance document and subsequent public comment period, we expect this initiative to be finalized in 2016 with a likely implementation late 2016 or early 2017. This could bring some significant changes to the program. It seems clear that HRSA plans to continue to expand its audits of covered entities and 340B providers will need to take a careful look at their programs in light of the impending changes associated with the MegaGuidance.
Some key elements, among the many included in the MegaGuidance, will be:
• The decision to allow or disallow the use of 340B drugs for hospital discharge prescriptions (the current proposed language would eliminate the use of 340B drugs for hospital discharges);
• The use of independent 3rd party audits to support contract pharmacy program compliance and the implications of how to address the new quarterly audits; and
• The decision on whether to address the restricted access to 340B drugs imposed by manufacturer limited distribution networks.
We are ready to support our clients in any element of their 340B program needs and anticipate significantly more activity in this space for 2016 as programs work to proactively bring their programs into compliance with the new MegaGuidance and ensure they are ready for a HRSA audit.
Visante has been an independent consulting and audit review provider since the inception of the HRSA 340B audit program. All of our 340B subject matter experts are well experienced in the program having directed or managed their own large programs prior to joining Visante. We are totally independent with no fiduciary relationships to any type of 340B program, service, or provider and work exclusively for our client’s interests. We are a platinum sponsor for 340B Health and work at that level also to support lobby and legislation efforts to support the program.
2. Sterile Compounding
The United States Pharmacopeia has been actively working on a revision of Chapter 797 Compounded Sterile Products and has also chosen to break out the previous section in the current Chapter 797 dealing with Hazardous Medications as Compounded Sterile Products into its own chapter – USP Chapter 800.
These works have been released for public comment and I anticipate that both Chapters 797 and 800 will be finalized sometime in 2016. The target date for publication of USP 800 is February. It is important to note that any USP chapter falling under 1,000 can be enforced by the FDA, surveyed against by The Joint Commission and adopted by State Boards of Pharmacy.
Clearly, in the wake of the NECC tragedy, state boards are increasing scrutiny of compliance with USP 797. If these new chapters stay close to the wording in the currently released versions, there will likely be some significant changes required for most pharmacies in both physical facilities for sterile compounding and also in the compounding processes and quality control elements.
At the same time the Drug Quality and Security Act is now in place with the key function being the creation of voluntary outsourcing facilities under Section 503B. These 503B compounding outsourcing providers must now meet FDA cGMP requirements and are regulated by the FDA. This is in contrast to 503A facilities, which are still licensed as pharmacies and regulated by State Boards of Pharmacy. In 2016, I anticipate pharmacies becoming much more active in the area of sterile compounding as a result of the above actions.
As pharmacies work to determine strategies for sterile compounding and outsourcing, Visante has subject matter experts experienced in both USP and cGMP activity to support these decisions.
3. Specialty Pharmacy
The prescription drug spend in 2015 is expected to top last year’s record number of $374B. Much of this increase has been driven by specialty pharmacy (high cost drugs used to treat complex conditions). While the prescription drug spend overall in 2015 increased by 13%, specialty drugs increased by 17%. In total, specialty pharmaceuticals comprised approximately 30% of the total prescription drug spend while representing less than 1% of total prescription volume. And, this trend is expected to continue with estimates that by 2018 specialty pharmacy will consume 40-50% of the total US prescription drug spend.
The impact of this trend for hospitals is obvious. In addition to being the primary treatment modality for the majority of these complex patients, medications represent the fastest growing expense line for the majority of organizations and are also a major source of revenue. Combined, the opportunity to impact quality of care outcomes and financial outcomes through specialty pharmacy is significant, and it is imperative that organizations have a well-defined strategy around specialty pharmacy.
Visante specialty pharmacy subject matter experts have all directed/managed their own successful specialty pharmacy programs and are well experienced in business planning and program analysis, program design, program implementation and program management for all facets of specialty pharmacy (including clinical, financial and regulatory). We are also totally independent in this area and work to support our client’s needs in whatever manner presents the most optimal approach. This may be a partnership with a local or national provider, or a specialty program owned and operated by the client site, or some type of combination service. As specialty pharmaceutical growth continues to accelerate in 2016, I anticipate more organizations will be working to define a long-term strategy and Visante is ready to assist in any element of those plans.
4. Employee Rx Drug Benefits
All employers continue to look for ways to ensure that quality healthcare services are extended to their employees while also looking for ways to manage these increasing costs.
As prescription drug spending continues to escalate, the impact on employee health plans will be significant. This is due, in part, to increases in overall drug spend due to a combination of the introduction of new drugs, greater use of specialty drugs for complex diseases, a lower than usual rate of patent expirations, and an overall increase in marketplace demand as a result of expanded coverage for a population that had previously been underemployed or chronically uninsured.
Methods employed in the past to control the cost of medication therapy may no longer be adequate. The use of pharmacy benefit managers (PBMs) has been an effective strategy to help improve medication utilization and cost, however they are often a resource whose business model is not totally understood by employer groups and hospitals.
While traditional PBM models have been successful in the past, we should definitely not consider a “one size fits all” approach for the future. With the emergence of new PBM models using pass-through pricing versus traditional, lock-in pricing, there are now alternatives that could help with further cost reductions for the pharmacy benefit. This also could include using internal pharmacy resources to provide the benefit to employees.
The key to better management of the pharmacy benefit is a complete understanding of what a plan is actually buying from a PBM. Whether incorporating a traditional lock-in approach or a pass-through arrangement, both can be transparent as long as the revenue sources are disclosed and understood and a high degree of communication exists between the PBM and its client.
In either case, the key to reducing drug costs for a plan sponsor is transparency. Visante consultants have a wealth of experience in managing the prescription benefit and we approach this by using human resource experts in conjunction with pharmacy experts to help organizations evaluate their PBM programs. This should include a full understanding of their options to ensure an equitable, “apples to apples,” comparison in any PBM analysis. This will provide them the best opportunity to extend quality pharmacy benefits to their employees at the best financial advantage.
5. Ambulatory Pharmacy
With the continued move to drive the cost of care to the lowest level possible while still providing quality outcomes, the emphasis on outpatient care continues to increase. New and exciting models of care — such as the Patient Centered Medical Home — are providing new practice opportunities with an emphasis on collaborative and multidisciplinary care.
With medications as the primary treatment modality for the majority of outpatients, the opportunity for pharmacy to actively support this process is significant. By using pharmacists practicing at the top of their license and supporting medication selection, education and adherence, there are many opportunities to contribute to significant improvements in patient outcomes.
An important key to these activities is the capture of initial prescription data. Increasingly, organizations are better understanding the value of a well-developed outpatient prescription pharmacy service. An important first step is to have a program to actively capture this prescription volume beginning with discharge from the hospital through the hospital’s outpatient pharmacy.
A well-coordinated program can produce capture rates of up to 75%. This impacts readmission rates where up to 35% can be medication related. It also generates a significant revenue stream for the organization. The prescription data can then effectively flow into the medication reconciliation program with accurate prescription information moving to the pharmacists in the ambulatory clinics or patient centered medical homes allowing for continued education and support for adherence and compliance.
With the continued evolution of ambulatory care in 2016, I anticipate more organizations will be exploring opportunities to expand ambulatory pharmacy programs and Visante consultants have a proven track record supporting all facets of a comprehensive program.
6. Controlled Substance Compliance
The tragedy of prescription drug addiction is apparent throughout the US. According to the CDC, nearly 15,000 Americans die annually by overdosing on prescription painkillers. This is more than deaths from heroin, cocaine, and all other illegal drugs combined. Increasing prescription opioid abuse has contributed to drug overdoses becoming the largest cause of accidental death, surpassing traffic accidents.
Healthcare workers are not immune to the dangers of prescription drug abuse. Due to their close proximity to these highly addictive medications it is essential that the development and implementation of effective anti-diversion polices be undertaken.
Although some healthcare workers will divert medications for personal use, others divert to supply a significant other or friend, to sell drugs to others, or to stock a party supply.
This year there has been increasing activity by the Drug Enforcement Agency (DEA) relative to the security and monitoring of hospitals to provide for controlled substance handling. Unfortunately, many of the DEA’s hospital reviews have resulted in substandard performance with accompanying multi-million dollar fines.
In 2016, I expect DEA scrutiny of hospitals to escalate.
A well-coordinated controlled substance program in a hospital has many elements and moving parts and it is often difficult to maintain complete oversight on everything going on with this process. Most hospitals and healthcare organizations have a lengthy “to do” list and adding one more thing to the list is often overwhelming. Having an external review with its perspective on an organization’s controlled substance program is a great way to support an ongoing commitment to the highest standards of control and practice in this area. This is definitely an area where an “ounce of prevention is worth a pound of cure”.
Visante approaches our review of controlled substance programs from a multi-disciplinary perspective using a team of experienced pharmacists, pharmacy technicians and nurses to provide a comprehensive program review and assessment. Our consultants have implemented, audited and provided support for the CMS OMS system. We can provide assistance to verify your program is compliant.
7. Continuing Evolution of ACOs & Population Health Management
The jury is still out on the ultimate configuration of programs such as Accountable Care Organizations, bundled payments, and value-based reimbursement. However, it seems clear that the US healthcare system must continue to drive innovation and transformational change if it is to ultimately be successful in improving outcomes and reducing cost.
CMS has stated that by 2018 it wants 50% of Medicare fee-for-service payments going through ACOs or bundled payment arrangements and 90% of traditional Medicare payments paid through these arrangements. Couple this with new pilots such as the CMMI oncology pilot (planned for a January 2016 launch) and this emphasis becomes very clear. In this program, payers and providers agree to be accountable for the total cost of an episode of care for oncology patients, defined as 6 months.
In addition value-based programs, such as readmission penalty programs, are also continuing to expand. The original diagnostic groups under which 30-day readmissions would not be paid by CMS included AMI, CHF and Pneumonia. For 2016, total hip and knee replacement and COPD will be added to this list. And more discharge codes are being considered.
As a part of the overall evolution of accountable care, we continue to hear more about population health management. PHM focuses on aggregating and analyzing health-related data from multiple information sources to create a comprehensive patient record allowing providers access to more actionable information that supports better decision making to drive improved clinical and financial outcomes.
Typically, PHM programs use some type of business intelligence tool to support data aggregation and analysis to help provide a comprehensive clinical picture of patients which will drive the improved clinical and financial outcomes. With medications as a mainstay of therapy, this is an increasingly important element of an effective population health approach. In a recent Journal of the American Medical Association article, it was stated that “nearly three in five American adults take a prescription” medication. That number “is up markedly since 2000 because of much higher use of almost every type of medication, coupled with Medicare Part D expansion, and enhanced access to insurance coverage under the Affordable Care Act.”
An effective strategy around medications is a key element of a successful PHM approach. Visante consultants have extensive experience working with hospitals and health systems and health plans to create medication optimization programs that support PHM initiatives. In addition, Visante is partnering with High Five Software to launch two specific business intelligence tools designed to support pharmacists to better manage the data around medications to produce more actionable information allowing improved clinical and financial outcomes.
8. CMS compliance for MA-PDs, PDPs and Health Exchanges
Medicare Plan Sponsors have felt the impact of the continued heavy emphasis on compliance with Medicare program requirements, especially as they relate to beneficiary access and quality of care. In the April issue of Visante’s newsletter, the Insider, we provided information about increases in civil monetary penalties (CMPs) over the past 12 months. This trend not only showed that the volume of CMPs had increased nearly three-fold, but also that the magnitude of those penalties was increasing, with over 83% of the penalties in 2015 over $100,000.
In addition to the rise of penalties for non-compliance, CMS program audits also experienced significant changes in 2015. The CMS program audit continued to have the same program areas consisting of Coverage Determinations, Appeals and Grievances (CDAG), Formulary and Benefit Administration (FA), Organization Determinations, Appeals, and Grievance (ODAG), Special Need Plans – Model of Care (SNP-MOC) and Compliance Program Effectiveness (CPE), but there were several changes in the audit protocols as CMS continued to improve compliance in these areas.
The audit protocols for 2015, announced last February, included new universes such as the Pre-Audit Issue Summary, Beneficiary Impact Analysis and the CPE Tracers. The CDAG and ODAG universes had the greatest increase from 2014, going from three universes required in CDAG and three in ODAG to 13 and 15, respectively. Also, a new audit classification — Invalid Data Submission — was introduced. This classification affected audit scores if the Plan Sponsor was not able to provide valid universes within three attempts.
In October, CMS made additional changes to the protocols for both the remainder of the 2015 audits and also for the 2016 audit season. This was in response to the feedback received from the plans. These changes have provided some positive benefits that have clarified the universes in CDAG and ODAG, but have also brought some additional problems for CPE, requiring consolidation of multiple types of information into a single field. This consolidation relies on manually entering the data instead of being able to pull it from existing Plan Sponsor systems.
The 2016 audit season will also introduce two new pilot program areas: Medication Therapy Management (MTM) and Provider Network Adequacy (PNA). Scores from these areas will not impact the overall audit score, but will afford CMS extra scrutiny. Plan Sponsors are struggling with the implementation of these changes for the New Year.
Compliance for Medicare Parts C and D will continue to be an important area of focus for Plan Sponsors in 2016 with the modifications to the audit protocols, new pilot program areas, and increased civil monetary penalties. Visante consultants have significant experience in CMS program audits. We provide mock audit services to determine a plan’s level of readiness in each program area before audit, and audit validation services afterwards, as required by CMS to complete the audit process. In short: we can provide assistance before, during and after your audit.
9. Antimicrobial Stewardship (AMS)
The call-to-action to combat the spread of multi-drug resistant organisms (MDRO) continues to escalate worldwide. In the US we have seen numerous alarms raised by the Centers for Disease Control, an executive order by President Obama, and various actions by states, such as California, to mandate AMS programs.
To date, we have not seen these actions really resonate with the decision makers in C-Suites of hospitals and health systems. The majority of hospitals in the US do not have high functioning AMS programs and, even for those that do offer programs, relatively few have effectively analyzed their programs for performance.
An effective AMS program requires a high degree of multidisciplinary activity and coordination. AMS programs must include dedicated and knowledgeable infectious disease physicians, infectious disease pharmacists, laboratory support, infection control and nursing support as well as a specific AMS data surveillance and analytics tool. We often see pieces of the above in place in organizations, but we rarely see all of these operating on a consistent basis to produce a high functioning AMS program.
An effective AMS program is absolutely a hospital’s best defense against MDROs and is a way to improve the quality of care for patients while, at the same time, reducing the cost for anti-infective medications. For most organizations, anti-infective medications still represent 15-20% of the total drug budget expense. A well-conducted AMS program can produce significant annual savings in this budget while reducing the spread of MDROs and improving patient outcomes. It is also important to note that each time a patient experiences an MDRO, this adds an average of $28,000 to the cost of a hospitalization. So, reducing MDROs also has a positive effect on overall hospital costs.
As scrutiny of MDROs continues to increase, we believe that 2016 will be the “tipping point” wherein more organizations will start to recognize this issue and begin to take more definitive action to improve their organizational performance.
Visante brings a proven multidisciplinary approach to helping organizations create a high performance AMS program. Using infectious disease physicians and pharmacists along with informatics and nursing specialists we support the entire required continuum of care to create a high functioning AMS program.
10. Pharmacy Automation
With increasing demands to work more efficiently, we expect that pharmacy automation technology will continue to expand significantly in 2016.
According to a new study by Grand View Research, Inc., the global market for pharmacy automation devices is expected to reach $8.9 billion by 2020, growing at an estimated compounded annual growth rate (CAGR) of 7.3% from 2014 to 2020. The 2014 market figure base was $3.1 billion. These figures include all types of pharmacy automation including inpatient and outpatient dispensing systems and sterile compounding technology.
The rise in demand for pharmaceutical products, technological advancements, and precise robotic tools to carry out pharmacy operations are some of the key drivers contributing to the growth of this market. With this rapid proliferation of automation and the significant capital resources invested, ensuring that the full capabilities of the technology are being utilized is an important element for any pharmacy to consider. Often, while technology providers know their products inside and out, they are not experts in pharmacy workflow design and can’t fully support hospital operations in terms of changing their internal processes to allow for optimum utilization of the technology.
Visante, as a totally impartial third party familiar with both technology and all elements of pharmacy operations, is in a unique position to assist with the evaluation, selection and implementation of pharmacy technology to help maximize the utility of the products and help the vendor and the pharmacy achieve optimal use of the equipment.
As we move forward into 2016, there is no doubt that healthcare is facing some serious challenges on a level not previously encountered. However, with big problems come big opportunities and at Visante, we are excited to be able to offer innovation, creativity and transformational change support to advance programs around medicines optimization as a solution to many of these problems.