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.

The More Things Change, the More We Can't Stay the Same | NCPA Executive Update | March 9, 2018

by NCPA | Mar 09, 2018

Dear Colleague,

Doug Hoey

On the road again tonight, living the glamorous life in a Hampton Inn digesting dinner from Dairy Queen a little after 9 p.m.

I'm coming back from luminary meetings at the CPESN® USA Mid-Year Meeting and Workshop in North Carolina. I found some irony that the report by the Wall Street Journal of Cigna making a bid to buy Express Scripts for $67 billion coincided with the CPESN meeting. Consolidation is taking place all around pharmacy, and the big are trying to get even bigger. The larger the entity, the more distance there is between the provider and the patient, which likely leads to higher costs and poorer care. The CPESN network is about doing the exact opposite. It is bridging that gap between the provider and the patient.

I talked with dozens of pharmacy owners at the meetings yesterday and this morning, and they shared some of the hundreds of conversations they have had with other pharmacy owners in their states over the last year. It occurred to me that the CPESN network is so simple, yet so revolutionary, that more overall understanding could be useful. So, here are a few questions from some of those conversations.

Can you run CPESN-USA network by me one more time?
The CPESN-USA network is a clinically integrated network serving affiliated local community pharmacy networks.

Um, clinically integrated network? Should that mean something to me?
Yes and no. It's a fairly new term to the pharmacy world, so there is a good chance you might not have heard of it. And, even if you have, it might run together with other health care jargon that fills our complex health care system. But, YES, it is definitely meaningful to you because pharmacists that improve quality and lower costs by virtue of being clinically integrated are able to do something that independent pharmacies normally can't — negotiate together for clinically integrated services to receive a share of the dollars that payers save in patient care costs, e.g., fewer hospital visits as a result of the enhanced services the pharmacies provide.

PBM contracts signed for pharmacies are "take-it-or-leave-it" contracts. Won't this just be more of the same?
First, PBMs aren't the target audience for the clinically integrated network. The network's focus is the medical side of a health benefit, where savings are achieved from proper medication use and management. A clinically integrated network provides a different service of value to the plan sponsor. For example, maybe the plan sponsor has a group of patients who are increasing its costs. The clinically integrated network could be hired to manage that group of patients, working with other healthcare providers. If the network helps to lower the patient care costs, depending on the contract with the payer, the CIN can share in the savings, and/or they are paid for their service, potentially in new ways like per-member, per-month.

A "payer" is a "plan sponsor," right?
Sometimes. Not always, though. I often hear the term "payer" used when "plan sponsor" is what is really meant. The distinction is important. A plan sponsor is at the top of the food chain. It is the entity ultimately writing the check. It's usually employers, the government (aka taxpayers) or individual consumers who buy their own health insurance. Those three groups often directly or indirectly hire other entities ("payers") to take their money and pay the providers. So, a payer could be a health insurance plan, PBM, plan administrator, etc. Pharmacy often has to deal with the pharmacy-side payer, not the medical-side payer. The CPESN network is designed to collaborate with plan sponsors and medical-side payers trying to manage their total health care costs.

So, how many plan sponsor contracts in the CPESN network?
There currently are 38 CPESN local networks. Each one of those networks is identifying plan sponsors in their region (usually their state). There is a high level of interest because this is innovative and different from what they are used to seeing. The plan contracting process makes molasses seem like WD-40, though. It's slow. Really slow. Importantly, "network adequacy" is essential to win a contract.

What's network adequacy?
Just what it sounds like. The pharmacy network must have enough pharmacies in it to adequately cover the plan sponsor's patients in the plan that need their services. Right now, there are only two states with solid CPESN network adequacy — Iowa and Arkansas. Not coincidentally, those two states are getting the most interest from plan sponsors.

What's my next move?
If your pharmacy is patient-focused and does more than pour, count, lick, and stick, there's a good chance that being part of this clinically integrated network is for you. Take this 10-question assessment to see for yourself. Then, find your local network, sign a participation and ACH draft agreement, and contact three of your colleagues and encourage them to do the same.

NCPA spoke up about the attempt by Cigna to buy Express Scripts a few hours after the announcement. Take a moment to read our statement. Bigger is not better. Clinically integrated networks of patient-centric pharmacies bring patients and providers closer together.

Doug Hoey

P.S. If you're concerned about the trend of corporate heath care consolidations that put profits first and patients last, take advantage of the chance to talk directly to decision makers at the 2018 Congressional Pharmacy Summit, April 11-12. You'll meet with your member of Congress on Capitol Hill and get the latest information about our priority legislation. Register today!