NCPA Executive Update

NCPA Executive Update delivers insights on legislative, regulatory, policy, and industry developments from NCPA CEO B. Douglas Hoey, Pharmacist, MBA, to NCPA members and pharmacy leaders every Friday.

Pay Pharmacies for Performance | NCPA Executive Update | August 19, 2016

by NCPA | Aug 19, 2016

Dear Colleague,

Doug Hoey

When it comes to payment for performance, community pharmacists are ready and willing to perform. In fact, the vast majority of community pharmacists have said to me that they welcome the opportunity to finally be recognized for the work they do every day to improve patient health. They also tell me that they are tired of their pharmacy being lumped together and paid the same as underperforming pharmacies.

The problem is that, at least so far, instead of offering payment for performance, health plans and PBMs have adopted a "less punishment for performance" approach.

In late May/early June, Humana sent contract amendment notices to most independent pharmacies or their PSAOs outlining Humana's new Part D performance program, which starts each eligible prescription claim with a $5 deduction "punishment" with the assurance that at least 80% of pharmacies will never see all of those dollars back.

This program and others like it miss the point. At the root of the issue is that pharmacies should not be forced to fund their own performance program. A payment for performance program should align the interests of the patient, the payer, the plan, and the pharmacy. If any of those components are not in alignment, the plan doesn't work well.

Last month we sent a letter to Humana saying that their ‘less punishment for performance' program is a disappointment. The concept of recognizing pharmacies for performance is on the right track, but the execution of the Humana program is critically flawed.

Read the whole letter to get the full context, but here are some of the ways we said Humana's current punishment for performance program could be salvaged to a program that begins to align the interests of pharmacies:

  • Return 100% of the money subtracted from the pharmacy's payment into the performance incentive pool to reward pharmacy performance.

  • Reward pharmacies for meeting five-star quality measure thresholds (e.g., 79% PDC (proportion of days covered) for the cholesterol [statins] measure), instead of only the top 20th percentile of pharmacies.

  • Reconcile the pharmacy's performance and pay out the reward incentives on a monthly basis rather than holding the pharmacy's performance incentive money for six months.

  • Reward every pharmacy with a 100% PDC with a performance payment no matter where their perfect score falls within a percentile ranking.

  • Do not subtract $5 from prescription claims where the pharmacy's payment is $5 or less.

  • Share the benefits Humana gains from the increase in star ratings generated by pharmacies working to increase their applicable quality measures.

We recently heard back from Humana, and we're still trying to gain additional clarity on some of the responses. But this much is clear: Those health plans that structure programs that successfully align everyone's interests and actually reward pharmacists for their performance are the plans that will ultimately be the most valuable.

Doug Hoey