How to choose a hospice PBM?

Pharmacy Benefit Management (PBM) is a reality in the healthcare industry and has become an essential part of hospice care over the past 15–20 years. Hospices must pay for all patient prescriptions related to a hospice diagnosis, highlighting the importance of negotiation and the purchasing power of a PBM.

In addition to their buying power, PBMs provide hospice agencies with the pharmaceutical expertise they need. For example, hospice regulations require a pharmacist to oversee each patient’s prescription regimen, which is typically not available through a local pharmacy provider and could be difficult without the interface capabilities provided by a PBM (see Your EMR-PBM Interface, below). Additionally, hospice agencies can analyze and report prescription data by patient, diagnosis, or day when using a PBM.

Hospice PBMs also provide essential support and education services, such as 24-hour support (essential for hospice physicians), hospice comfort or emergency kits, portals nurse-specific online and even nursing CEUs (continuing education units).

Choosing a PBM for Hospice

Of course, cost is an important aspect in selecting a PBM, but many of the larger hospice PBM players will be reasonably similar financially. Consider the per day versus per drug rate possibilities of PBM.

Another critical factor to consider when choosing a hospice PBM is to ensure that your EMR system communicates with the PBM you have chosen. Make sure the PBM and your EMR provider are willing and able to integrate their systems for the benefit of your agency. A seamless flow of data from your EMR system to your PBM eliminates duplicate patient data entry and helps reduce medication errors. Plus, it can save nurses countless hours of time.

Some hospices partner directly with a pharmacy that offers the full services often associated with a PBM, such as medication review, medication management, and usage reporting, as well as clinical consultation for symptom management and pain. Often, the hospice provider requires these services, in addition to 24-hour medication delivery. Therefore, choosing between a community pharmacy and a PBM is often a time-consuming and costly process for the hospice provider.

Recent multi-billion dollar purchases mean that using the drugs for hospice and hospice patients is a lucrative business.

When it comes to charging for a PBM, there are basically two types: daily and fee-for-service. So how do you decide between the two? Most hospices choose the cheaper alternative. So what is the cheapest PBM pricing option?

I assure you this is not one of those posts that you read and end up not answering your question. You will have your answer after this short reading. First, let me discuss the pros and cons of the two PBM pricing options.

Price per day

Benefits

• You have a specific number to work with. This makes it easier to budget for your monthly pharmacy costs.
• He has a minimal range of drugs. A medical director who fails to adhere to a rigorous formulary can be your worst enemy when it comes to saving on prescription drug costs.
• He maintains consistency in his treatment of his nurses and staff. The sole purpose of daily pricing models is to stay in the form. This simplifies things for your staff.

The negatives

• You are obligated to pay regardless of the circumstances. So, for example, even if you have several patients on duty taking very low cost medication, you will still have to pay the agreed daily allowance. In other words, you occasionally save money and occasionally lose money.
• You will incur costs for drugs and services not listed on the formulary. For example, if a patient is taking off-formulary medications, you will pay the per diem AND the off-formulary medications.
• You develop a misperception of your PPD cost (per patient day). Just because your daily price is $9 doesn’t mean your PPD is $9. When calculating your DPP, be sure to include the cost of off-formulary drugs and services.

Rates per service

Benefits

• They only charge you for what you consume. Whether the drug is on the formulary or not, you pay the same amount. Similarly, if you do not order any prescriptions for a patient while they are in hospice, that patient’s pharmacy fee is $0.
• Now you have more alternatives to drug therapy. There are no price penalties associated with the drugs your hospice selects for a patient. This degree of adaptability can translate into better patient care.
• You have more information about how your money is spent. Each month, you will receive a bill listing all of your hospice medications and their associated costs.

The negatives

• You don’t know the cost of your pharmacy. Because it depends on the medications the patient is taking and the pharmacy they used, you won’t know until the end of the month when you’ll get the bill.
• There are people who take too many drugs. With no price penalties for off-formulary drugs, it’s natural to worry less about cutting a patient’s drug regimen, especially when their medical director prescribes them all.
• Your medical director determines the cost of your medications. Medical directors generally do not consider cost when prescribing drugs. With the “freedom of prescription”, it is natural to ask for the most expensive medicine because it is the “most effective”.