Presenting a live 90-minute webinar with interactive Q&A Structuring Physician-Pharmacy Ventures: Minimizing Regulatory Risks, Ensuring Reimbursement Navigating Corporate Practice of Medicine/Pharmacy, Anti-Kickback and Stark Laws, and State Regulation WEDNESDAY, MAY 3, 2017 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Reesa N. Handelsman, Partner, Wachler & Associates , Royal Oak, Mich. Rick L. Hindmand, Member, McDonald Hopkins , Chicago Todd A. Nova, Shareholder, Hall Render Killian Heath & Lyman , Milwaukee The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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STRUCTURING PHYSICIAN-PHARMACY VENTURES: MINIMIZING REGULATORY RISKS, ENSURING REIMBURSEMENT Reesa Handelsman Rick Hindmand Todd Nova Wachler & Associates, P.C. McDonald Hopkins LLC Hall Render rhandelsman@wachler.com rhindmand@mcdonaldhopkins.com tnova@hallrender.com 248.544.0888 312.642.2203 414.721.0464
Agenda Overview - Drivers of Increased Pharmacy Integration Chatter • State Law, AMA • • Stark & Anti-Kickback Risk Profile • • Institutional Considerations • Pharmacy Management Agreements 5
Integration Drivers – Payment Systems Current: PPS Model • • Effective October 1983. • Today includes - Acute Care I/P (DRG); Outpatient (APC); FQHC (Visit PPS) Some limited exceptions - RHC; Hospice; CAH; etc. • Future: Value-Based Purchasing (VBP) and Bundled Payments • • Per CMS, current payment systems reward quantity, rather than quality What is VBP? • • Reward quality of care through incentives and transparency • Link payment more directly to the quality of care provided May 6, 2011 VBP Regulation: • • “The overarching goal of these initiatives is to transform Medicare from a passive payer of claims to an active purchaser of quality health care for its beneficiaries. ” 6
Integration Drivers – Reimbursement Office-Based Professional Component • Physician Fee Schedule (“PFS”) RVU (non -facility) drug administration CPT codes PFS E&M CPT Code (non-facility) • Drug cost • Part B: ASP + 6% (was percentage of AWP) Hospital-Based Technical Component • APC Professional Component PFS E&M and/or procedure CPT Code (facility) • Drug cost • PPS - Part B: • ASP + 6 % (if drug cost greater than drug packaging threshold of $100 for 2016) • Bundled into APC (if drug cost lower than drug packaging threshold of $100 for 2016) Limited subset of drugs with “pass - through” status (separate payment regardless of price ) • • Status indicator G – roughly 40 in 2016 OPPS Final Rule • CAH • 101% of reasonable costs Pharmacy • Part D ingredient cost plus dispensing fee (plan specific) • Part B reimbursement not available for any drug usually self-administered 7
Issues Impacting Drug Cost and Reimbursement Costs Revenues • • Care coordination Part A Reforms • • ACO/Shared Savings Site Neutral • • Bundled Payments Bundled Payments • VBP • Part B Reforms • Therapeutic substitutions • From ASP + 6% to? • System-wide P&T Committees • VBP • Advanced Practice Clinicians • PBM Consolidation • Pharmacists as providers? • MAC Transparency • 340B • DIR Fees • • Rural to Urban Reclass Contract Terms • • Specialty Pharmacy Partnering & Development Any willing provider laws • 340B Contract Pharmacy and Prescription Transfers • Patient Assistance Programs • Pricing Power via Provider Integration (Vertical and Horizontal) – GPO Considerations Other Factors • • Price negotiations – Part D Access 8
Integration Drivers –VBP… And Beyond CMS: Better Care. Smarter Spending. Healthier People: Paying Providers for Value, Not Volume (January 26, 2015) Consider – Role of pharmacy and other vertically integrated providers Source: Centers for Medicare and Medicaid Services – January 26, 2015. 9
Integration Drivers –VBP… And Beyond Source: Centers for Medicare and Medicaid Services – January 26, 2015. 10
Integration Drivers –VBP… And Beyond • CMS Bundled Payments for Care Improvement (BPCI) Initiative Organizations to enter into payment arrangements that include • financial and performance accountability for episodes of care 4 Models (Participants as of April 2016): • • Model 1 (1): Episode of care focused on the acute care inpatient hospitalization. Awardees provide a standard discount to Medicare from the usual Part A hospital inpatient payments Separate TC and PC, but gainsharing permitted • Model 2 (649): Starting at inpatient admission, episodic care payments for a • 30-, 60- or 90-day period Model 3 (862): Starting at post-acute admission, episodic care payments for • a 30-, 60-or 90-day period • Model 4 (10): Prospective bundled payment arrangement Lump sum payment made to a provider for the entire episode of care • includes PC and TC 11
Integration Drivers –VBP… And Beyond In Models 2 and 3, bundle includes: physicians’ services, post -acute provider care, • readmissions, and other related Part B services Including: • Clinical lab services; DMEPOS; and Part B drugs. Part B Drugs include physician administered drugs. • • CMS BPCI Initiative Models 2-4: Years 1 and 2 Annual Reports to CMS 2015 • “…BPCI appears to have affected provider performance.” • • “We observed statistically significant declines in SNF use and increases in HHA use…” • “Readmissions dropped more for BPCI Model 2 participants, although ED visits without a hospitalization increased …” • 2016 • “We remain limited in our ability to estimate the impact of the initiative under most Model and episode combinations because of insufficient sample size and the limited time the initiative has been underway.” 12
Integration Drivers –VBP… And Beyond December 20, 2016 Episode Payment Model Final Rule: • • Heart attacks; • Coronary bypass surgery; or • Surgical treatment of hip or femur fractures • Episode begins with inpatient admission and extends to 90 days after the date of discharge. The Medicare is automatically included in the applicable EPM. Proposed that related items and services for EPM episodes would include the following • items and services paid under Parts A and B: Services: Physicians; I/P hospital; I/P psychiatric facility; LTCH; IRF; SNF; HHA; • Hospital outpatient ; Independent outpatient therapy ; Clinical laboratory; and Hospice Items: DME; and Part B drugs • • Start date for the EPMs has been delayed for an additional three months, from July 1, 2017 to October 1, 2017 13
Integration Drivers - Impact With shift to population health and cost reduction incentives, what are we to do? • Focus first on the clear quality and cost drivers through coordination (including • pharmacy/specialty) • Highest cost patients are demonstrably concentrated 14
Integration Drivers – Drug Payment 2016 CMS Proposed Part B Drug Payment Rule (Withdrawn) • 15
Integration Drivers – Practical Issues • Consider: Role of physician, APC and pharmacist medication management in readmissions and HACs • Collaborative Practice Arrangements • Benefit has to be provided directly by Hospital or agent of hospital under hospital direction and control • Bedside delivery • Self-administered drugs (generally Part D) • Establishes refill relationship 16
Pharmacist Professional Practice • Various states (e.g., WA, VA, WI) • Wis. Stat. 450.033 (2014) • Incident-to billing for professional fees an option (in the office setting – not in the hospital setting) • Must meet direct supervision standards: “immediately available,” meaning at least in the office suite 17
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