Chapter 2: Planning and Steps to Building the Ambulatory Practice Model

Web case: Medication Therapy Management Service

Your organization is a multi-site health system with several hospitals, a community physician division, and a home health group. You are the clinical manager in a Department of Pharmacy and have served in this position for 7 years. Your pharmacy services span the organization from the inpatientdistribution and clinical care to the outpatient pharmacy services. You have 50 FTE pharmacists and 40 FTE support staff and administrative assistants.

Dr.Busybee, a local community physician, would like you to provide services in his office. You are uncertain how your current hospital clinical practice model compares to a community outpatient environment. During your needs assessment of his practice, you determine that he is at risk for losing his performance-based contract with his largest insurer based on poor performance on key disease management indicators: achievement of goal hemoglobin A1C values in diabetes and INR values in target for patients on warfarin anticoagulation. You reside in Maryland, and the first step is to understand the rules and regulations regarding pharmacist practice. You contact your state’s board of pharmacy and state pharmacy organizations, and they provide detailed information on current laws and regulations. You discover that in Maryland, HB781 “Physicians and Pharmacists: Therapy Management Contracts” passed in 2002 and the regulations were finalized in 2004. In the community setting, HB781 states that a CDTM protocol, approved by both parties, may authorize the pharmacist to modify, continue, and discontinue drug therapy through written disease specific protocols. Additionally, the patient must sign the protocol approving the pharmacist’s involvement as part of the team on a yearly basis. This law exempts institutional facilities from the collaborative practice restrictions, which means your new community practice will need to meet the HB781 requirements and that pharmacists will not be permitted to initiate drug therapy.

On further discussion with the practice administrator, you note that their staff is uncomfortable with caring for patients on insulin and warfarin therapies due to the complexity. In evaluating potential service delivery models,you determine that an integrated service makes the most sense based on the fact that

  • you have access to the documentation without having to purchase or build your own system;
  • you will be located within the office with direct lines of communication with the providers for real-time decisions; and
  • due to working in the physician office, you avoid any renovation to retrofit your current pharmacy space for the new task of running a direct patient care service.

Dr.Busybee produces a medication use report from his prescription service to address the question of patient volume. The report indicates there are currently 15 patients on insulin therapy, 45 patients on other diabetic/hypoglycemic medications, and 35 patients on warfarin. Based on your discussions with other external pharmacy providers caring for similar patients and with input from Dr. Busybee on the general complexity of his patients, you determine that visit lengths will be 40 minutes for new patients and 20 minutes for established patients. At a minimum, you expect to see your established AC patient monthly and your established diabetic patients every 3 months. With Dr. Busybee’s input, you estimate20−30% of patients will have more frequent visits. Additionally, Dr. Busybee notes that he has an overall 65% show rate for patients in his practice.

You need to determine the direct-care pharmacist staffing needs for this new service. You use a resource needs worksheet to help with this task for the 95 patients that will use your new service. Since all the patients have been receiving care in the system, you set out to determine the maintenance level of staffing needed to care for the patients with no adjustments for new visits. You will use 20-minute visit duration for each patient to determine minimum needs. You walk through these steps:

Determining # of monthly visits:

  • 60 patients with diabetes
  • 80% will have routine visits every 3 months = 48 patients every 3 months or an average of 16 patient visits per month
  • 20% will need more frequent visits; we will use monthly for our estimate = 12 patient visits every month
  • 35 patients on warfarin
  • 80% will have a routine visit every 1 month = 28 patient visits per month
  • 20% will need more frequent visits; we will use every 2 weeks for our estimate = 14 visits per month
  • Total monthly visits = 70 (28 for diabetes and 44 for anticoagulation)

Determining monthly staffing needs:

  • Scheduling must account for “no shows” and rescheduling of patients. The visit completion rate is 65%.
  • 70 visits/month x 1.35 “no show” correction = 94 visit slots estimated to meet demand
  • 94 visits x 20 min/visit x 1hr/60min = 31.3 hours staffing/month
  • Corrections need to be made to account for…
  • Documentation time of 10 minutes per completed visit
  • 70 completed visits/month x 15 min x 1hr/60 min= 17.5 hours
  • Total direct care time = 31.3 + 17.5 = 48.8 hours
  • Non-productive time adjustments are 10 – 20 % of time
  • 48.8 hours direct care x 1.15 (15% increase) = 56.12 hours
  • Direct-care pharmacist staffing needs are roughly 56 hours per month or roughly 14 hours per week.
  • FTE = 14 hours/week x 1 FTE/40 hours = 0.35 FTE need

Staffing needs are 0.35 FTE. Now you can determine the best way to schedule the pharmacists based on current resources and availability.

Based on your staffing estimates for pharmacists, you sit down with your department’s pharmacy manager and Dr. Busybee’s practice administrator. You learn that Tuesday and Thursday mornings and Wednesday afternoon would be the only times when there is an open office with exam rooms in the practice. There are no current plans to hire a new provider or expand current work flow. Additionally, the medical assistants are working on other projects during those times, but can cross cover to assist with collecting vital signs for your patients. A discussion with your pharmacy manager reveals that two pharmacists have been expressing interests in expanding their patient care time and also have training well-aligned with your service. From these discussions you choose to provide services on Tuesday morning and Wednesday afternoon. These 2 half-days (8 hours) of staffing support provide a good portion of the 14 hours estimated in your direct care staffing needs assessment.

Financial discussions with Dr. Busybee identify several options to support the pharmacy service. First, you have the option to bill “incident-to” his practice and generate direct reimbursement. Next you consider their potential financial risk and the specific dollar amount associated with loss of their performance-based payer contract. Finally, you calculate the potential increase in revenue based on increased efficiencies for the physician (e.g., less time per appointment as pharmacists handle medication-related issues) and the potential for new patients (e.g., with potentially higher reimbursement levels).

You have already identified and engaged some of your stakeholders. Dr. Busybee, a key stakeholder, is very interested and convinced of the potential value you will bring to his clinic. You have also engaged Dr. Busybee’s finance department, and they are concerned about the legitimacy and compliance issues related to billing for clinical pharmacy services. You collect materials that support this area of pharmacist billing and set up a meeting. At this meeting you lay out what you are trying to do, provide examples from other practice sites with similar billing models, specific regulations, and guidance from CMS and the fiscal intermediary in your area. Additionally, you contact and receive several educational pieces from your national pharmacy organization as to how they view this issue. The finance and compliance people agree that moving ahead with billing for pharmacy services is an acceptable plan.

Resource needs worksheet

Revenue from Reimbursement worksheet

Unused stakeholder worksheet

Group / Who / Motivation / Impact
Payer / Individual Insurers / Unclear / Not driving factor for this service
Mrs. Risk Manager / Avoid lawsuits / Possible service champion to upper management
Provider / Clinical Pharmacists / Expand services currently offered / Provide mentoring and leadership to service
Staff Pharmacists / Expand their skills for future job, diversify current job functions / Provide the resources to see the number of patients necessary to improve the current clinical delivery model
Physicians / Overwhelmed by recent insurance addition
Concerned with liability with lawsuit / If on board, would provide necessary mentoring and referral base for pharmacists.
If not on board, would be very uncomfortable for pharmacists new to this area.
Patient / Employees / Good care / Prevention of adverse reactions would lead to less loss of worktime.
Others / Good care / New model could be confusion at first; need the front staff of the office to be well trained to answer questions and support legitimacy of program.
Supplier / Usual suppliers / No new contract for provider office / Would need to evaluate needs of pharmacists to see if utilization changes.