The Shift to Value-Based Care

December 2014, Vol 2, No 6 - Inside Pharmacy
Danielle Mayer, PharmDc
Maria V. Scarlatos, PharmD, CPHQ
Samuel Stolpe, PharmD

In recent years, the US healthcare system has been shifting from a fee-for-service system to a value-driven system.

Purchasing for value, which is led by the federal government inside programs such as the Medicare star rating system and considers cost and quality, is becoming a significant driver of healthcare reimbursement.

Medication use quality is becoming increasingly important as both federal and commercial healthcare dollars are strained in the chronic disease management of America’s aging population. Pharmacists can contribute meaningfully to the quality goals of payers. Their unique position in the community setting grants enhanced patient access and excellent opportunities for medication management.

Performance Measures
A key feature of value-driven payment systems is the use of performance measures to evaluate the quality of provider services. The basis of performance measurement is the regular collection of data to assess whether the processes performed are leading to desired patient outcomes. There are several types of performance measures used in our healthcare system. The widely used framework for measuring quality of care includes metrics to analyze structure, process, and outcome. Structure measures focus on the physical attributes of a setting where patient care is delivered, whereas process measures assess how care is delivered in these settings. Outcome measures gauge the impact of the care provided on health status.

With the advent of new quality incentive structures put in place through federal government programs, health plans and pharmacy benefit managers (PBMs) are shifting focus to quality-of-care measurement goals. The Centers for Medicare & Medicaid Services (CMS) has done this through the implementation of a program called the star rating system. This program rates contracted health plans and PBMs that provide coverage to individuals who enroll in Medicare Advantage (Medicare Part C) and Medicare prescription drug plans (Medicare Part D).

The 2015 star rating system for Medicare Part D includes 13 quality metrics, 8 that assess member experience, and 5 that are directly tied to clinical quality, specifically medication safety and adherence.1 These 5 measures account for approximately 50% of the given Part D plan’s star rating and represent a potential area for pharmacist intervention and impact. The medication safety measures include the use of high-risk medications in elderly patients and the use of angiotensin-converting enzyme (ACE) inhibitors and angiotensin II receptor blockers (ARBs) in patients with diabetes. The additional 3 measures determine adherence to oral diabetes medications, ACE inhibitors/ARBs, and statins. The 2015 star rating system for Medicare Advantage plans contains 33 measures of quality in addition to the Part D measures.

Star ratings that health plans or PBMs obtain are public facing, and published in multiple plan listing services, such as Medicare’s online enrollment tool on Star ratings have been shown to influence patients’ plan selection and are tied to other benefits and penalties.2 Medicare Part D plans that receive a 5-star rating have open enrollment throughout the year, enabling beneficiaries to switch to a 5-star plan at any time. Medicare Advantage plans receive quality bonus payments based on their overall star rating. These quality bonus payments have resulted in almost $200 million per year in revenue for 5-star plans. Plans that receive fewer than 3 stars for 3 consecutive years risk termination of their CMS contracts.3

Incentives to Improve Ratings
In response to these measures, Medicare plans have developed strategies to improve their ratings. There are many levers available to health plans and PBMs to improve their star rating performance. Some plans have restructured their formularies and others are implementing clinical services to improve disease state management. Some health plans and PBMs are moving forward with incentive and penalty programs for pharmacies based on improvements to the plan’s star measures. The unique position of pharmacists in the community setting provides excellent opportunities to improve medication adherence and medication use safety, the 2 areas of most gravity inside the CMS Part D measure set. Payers are recognizing that pharmacists can be an integral part of the solution to meet their quality needs.

Some incentive programs emerging in the marketplace include bonus payments for pharmacies based on star measure performance. In October 2013, Inland Empire Health Plan, based out of Southern California, created a pay-for-performance program to motivate community pharmacies to collaborate with the health plan and improve medication use quality for their beneficiaries.4 In-network pharmacies are measured based on metrics that are included in the Medicare star rating system, including adherence and medication use safety. Pharmacies that perform well on the metrics receive a monetary incentive every 6 months.5

How to Perform Well
One of the most important initial steps for a pharmacy to perform well inside of a pay-for-performance model is to learn exactly how they are performing on the measures that matter to health plans.

Pharmacy Quality Solutions has developed a performance information management platform, called EQuIPP, which currently includes more than 53,000 pharmacies.6 EQuIPP provides health plans and community pharmacy organizations unbiased, benchmarked performance information. This platform allows pharmacies and health plans to engage in strategic relationships to improve medication use quality. For example, EQuIPP provides information to plans and pharmacies about medication adherence metrics, a group of measures that comprise 3 of the 5 medication-related measures in the Medicare Part D star rating system.

Adherence is measured using the proportion of days covered methodology that is based on the fill dates and days supply for each fill of a prescription. This type of adherence calculation is able to account for early fills and overlapping prescriptions, and provides a conservative adherence estimate. Based on numerous studies of the relationship between adherence and health outcomes, 80% was set as the threshold above which patients can be considered highly adherent to most chronic medications.7 Medication adherence and medication use safety constitute common goals for patients, health plans, and pharmacies to collaborate on to achieve positive health outcomes.

An increasing number of health plans and PBMs are partnering with their network pharmacies, using EQuIPP as a common platform to target medication use goals. For example, Healthfirst of New York announced a partnership with Pharmacy Quality Solutions in May to improve its CMS star ratings for the 120,000 individuals covered by their Medicare Advantage Plan using EQuIPP.6 This partnership will enable Healthfirst to use a pay-for-performance model to collaborate more efficiently with in-network community pharmacies on medication use quality for Healthfirst beneficiaries. Pharmacies included in these types of incentive and disincentive programs incorporate a variety of solutions to target high performance on Pharmacy Quality Alliance (PQA)’s medication use measure set. Pharmacists have employed programs such as medication synchronization, medication therapy management, and patient-centered behavioral counseling interventions.

Pharmacists seeking to further understand their role in this value-driven system can access a program recently launched by PQA called EPIQ (Educating Pharmacists In Quality). This complimentary online continuing education program is designed to train practicing pharmacists, health professionals, and pharmacy students in measuring, improving, and reporting quality of care in pharmacy practice.

Managing the quality of medication use is now a recognized component to ensure optimal patient care, and pharmacists are an integral part of the solution to meet payers’ quality needs.

Leveraging pharmacy services to help health plans impact quality metrics is an opportunity for pharmacists to serve as a critical member of an integrated healthcare team. To take advantage of this opportunity, however, pharmacists must transition their approach from a mind-set of quality measurement resistance to quality measurement engagement.

  1. Centers for Medicare & Medicaid Services. Part C and D performance data: 2015 Part C and D Medicare star rating data. Updated November 18, 2014. Accessed November 24, 2014.
  2. Reid RO, Deb P, Howell BL, Shrank WH. Association between Medicare Advantage plan star ratings and enrollment. JAMA. 2013;309:267-274.
  3. Nau DP. Intersection of quality metrics and Medicare policy. Ann Pharmacother. 2011;45:1582-1584.
  4. Inland Empire Health Plan. IEHP rolls out early payments to providers eligible for ACA Medicare increases. Published October 2013. Accessed November 17, 2014.
  5. Inland Empire Health Plan. Pay for performance (P4P) program. Accessed October 14, 2014.
  6. Pharmacy Quality Solutions. Healthfirst selects EQuIPP to support improvement of Medicare star ratings. Published May 22, 2014. Accessed October 13, 2014.
  7. Nau D. Proportion of days covered (pdc) as a preferred method of measuring medication adherence. Accessed October 10, 2014.
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