Summer 2011
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Notes from The Cleveland Clinic: A Discussion with David Kvancz
David A. Kvancz, MS, RPh, FASHP
Chief Pharmacy Officer
The Cleveland Clinic Foundation
Cleveland, OH

How would you describe the management of ambulatory injectable drugs?
The management of ambulatory injectable drugs across the health system doesn't differ much from the responsibilities and roles of a chief pharmacy officer in the inpatient setting. You have to be responsible, accountable and concerned with procurement, supply chain integrity, proper storage and mixing, drug selection, dosing and preparation, and ultimately, administration and monitoring of the product and the patient.

I don't see a significant difference in terms of responsibility and accountability. What I do see is that managing becomes much more complex in a large health system across the various sites of care. Often there is no pharmacy presence where these drugs are stored, prepared or administered. As a result, you have to develop policies, procedures and quality-ssurance mechanisms to assure that what you are doing on campus with direct pharmacy involvement translates to the same outcomes being met across the health system, physician office settings, ambulatory surgery centers, etc.

What are some strategies for getting involved in new programs and services that may include ambulatory injectable therapies?
If the hospital is contemplating hiring medical staff in a particular service area or contracting for a new service, the pharmacy department can contribute to that discussion and process. The ability to do so may be based on the department's track record and organizational positioning and ability to be proactive rather than reactive in strategic discussions. The bottom-line question is that if there will not be a pharmacy presence in that service area, how can we proactively ensure the same level of quality that we provide on the main campus?

How does one ensure the quality of services for injectable therapies in the ambulatory care setting?
You must develop policies and procedures that install quality monitors for product procurement, preparation, administration and monitoring. This function may have to be carried out by other qualified health professionals-and the pharmacy can provide guidance and oversight to do that. If you get to a point where you can aggregate the volume of ambulatory injectable therapies, you may be able to have a physical presence there.

Another way of handling this issue may be to look at remote communication and dispensing technologies that allow a pharmacy presence in a remote manner. It is a very different process. The important part is to first recognize that there is a need for at least pharmacy oversight, if not pharmacy presence. If you can't have pharmacy presence, then develop specific programs, policies, procedures and strategies that align the consistency of drug utilization, drug management and drug procurement in those environments, so it achieves established for the pharmacy presence at the main campus.

How can quality issues be addressed without a pharmacy or pharmacist physically present in the area where infusions and injectables are being administered?
The quality of prescribing can be monitored through the use of standing orders and remote communication technologies (fax, online order entry, etc.). Without a pharmacy presence drug preparation has to be delegated in all likelihood to the nursing staff. Policies and procedures must be worked out in advance and be consistent with those used on the main campus in terms of outcome and double checks to ensure patient safety.

Another strategy is to place pharmacy technicians in these facilities and perhaps in the employ of private physician offices, but with a lateral or collaborative reporting relationship to the pharmacy department. We had that in the Tucson area where I was many years ago. We are currently contemplating that for the Cleveland area as well. Obviously you have to check with your state board's rules and regulations. Placing a well-trained, educated and reliable pharmacy technician in the facility for the purposes of procurement, storage and preparation may be the first step toward establishing a pharmacy services presence.

People initially might object, saying it should be a pharmacist instead. But the reality of our economic world today is that patient volume may not support that option. Pharmacists are not currently reimbursed directly for service provision. So you have to ask: Are you better off trying to train a set of nurses in procurement and preparation, despite a significant nursing shortage that's not expected to abate any time soon? Or should you try to work collaboratively with that practice setting and place a well-trained pharmacy technician there who can bring about some level of standardization? Given the importance of patient safety-the primary marker here-you must have processes in place at your ambulatory site that allow for the same degree of double-checks that are in place within the health system. Are the people who are checking trained as adequately as those on the main campus, whether it's a nurse or pharmacy technician or the physician for the final check, etc.?

I just had this discussion with my staff recently. The immediate reaction was no, you can't put a technician there without a pharmacist. Yet it's a small practice and it cannot afford to pay someone $100,000 a year to mix drugs. So even if you put a pharmacist there, you have to have someone to prepare drugs and it's kind of ridiculous to have the nurse prepare them if the pharmacist is there. The pharmacist shouldn't be the one to prepare them because we have a technician who can do it much more effectively and economically. It challenges pharmacists to think differently about what the real value is. The real value should be on the design of the medication use system, continued monitoring of that system, continued monitoring of the patient and influence of the actual prescribing order, as opposed to drug procurement and preparation.

How should billing of injectables in the ambulatory care setting be managed?
In general, ambulatory care areas deal with a limited number of drugs and patient types and therefore are more familiar with Medicare coding requirements than perhaps the staff even on the main campus. On the main campus, you are dealing with inpatient and outpatient coding, and the vast majority of that is not drug related. In most organizations, it is difficult to find a resource expert in the area of pharmaceutical billing. Organizations need to decide if they want to outsource billing of pharmaceuticals to the patient billing department or perform this service within the pharmacy. It is essential that the pharmacy manager understand billing systems and processes to ensure that medications are being billed correctly.

What resources are required to perform billing?
The staffing requirement is based on volume and can vary widely from a low of a quarter of a full-time equivalent (FTE) to more than 10 FTEs. You must look at people who have been educated or are certified coders. A number of certifications are available in this field, which helps you check the person's credentials. The days of hiring the high school graduate or part-time student to come in and plug a bunch of charge numbers into a computer with quantities to bill pharmaceuticals are gone. You need a coder, reimbursement specialist or somebody certified in these areas.

How should organizations plan for implementation of average sales price (ASP)?
On a quarterly basis, as soon as the ASPs are released, conduct an analysis of the changes in the ASP reimbursement model and make projections, based on your volumes, of whether or not you will experience a net revenue increase, decrease, etc. with the newest rounds of ASPs. A couple of websites can help with this. Probably one of the best is ACCC, Association of Community Cancer Centers, which has a spread sheet developed by Ernie Anderson of the Lahey Clinic. ( DrugRevenueCalculator.xls).

Using the spread sheet helps you look at this issue from a payor perspective, in terms of weighted averages and making projections. The alternative is to conduct your own internal analysis by:

  • evaluating your payor mix
  • determining actual receipts of payment for each episode of care
  • allocating the revenue that's been paid on an episodic care basis to the drug cost. In many organizations, drug revenue can be determined based on the percent of charges submitted in that episode.

The process requires intense detailed analysis in order to make accurate projections. Some people apply the Medicare ASP to all patients as a worst-case scenario, even though the Medicare population is only perhaps 20% or 30% of their total. It's an easy, quick and dirty way to do it, but you shortchange yourself and the department because many payors pay better than Medicare today based on percent of charges.

What advice would you give to pharmacy managers?
First you have to take an active role in understanding the reimbursement process with respect to billing and coding. Next, analyze actual payments received against the cost of the drug-particularly in a hospital outpatient UB92 billing environment. It's easier to do in a CMS1500 environment (physician office clinic), because you get a line-item explanation of benefit statement for the drug, radiology service, etc. In a UB92 hospital outpatient environment, you get a lump-sum payment for that episode of care. So you've got to develop a process, based on percent of charges, to figure out if the organization is being reimbursed for the cost of the drug. Depending on the payor mix, the organization may be losing money, breaking even or profiting on injectable therapies.

Although we weren't educated to be billing and reimbursement experts, we need to develop expertise. Ultimately, accountability for accurately billing and receiving payment for drugs lies with the director of pharmacy.

Volume 20
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