Elements Magazine Vol. 11 Iss. 1 March 2022

FINALLY HEAR

Are independent pharmacies ready for OTC hearing aids?

LOW DOSE, HIGH PROFIT This compounded drug has a 50 percent margin and is changing lives

Boost Your Benefits

A complete guide to employee benefits VOL. 11 ISS. 1 | MARCH 2022

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CONTENTS ON THE COVER

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FEATURE | Boost Your Benefits Everything pharmacies need to know about offering employee benefits

DEPARTMENTS

EWS 07 N

| To Err Is 2021

The top medication safety concerns from ISMP

TRENDS 08

Are pharmacists prepared for the new category of OTC hearing aids?

SOLUTIONS | Seven services that third parties will pay for

12 RETAIL 31

| Finally Hear

| The Is the End

Inspired end cap tips from a national retail consultant

16 SOLUTIONS

| How to Get Paid

Seven services that third parties will reimburse

25

SPOTLIGHT | Low Dose, High Profit

28

MONEY | Injury Income

This compounded drug has a 50 percent margin and is changing lives

31

How to streamline your workers' compensation claims

OUTLOOK | Chronic Care Collaboration

Chronic care management offers high reimbursement for low investment

ELEMENTS | The business magazine for independent pharmacy | MARCH 2022

OUTLOOK | Chronic care mgmt. offers high reimbursement for low investment

3

E

ON THE WEB

ELEMENTS

The business magazine for independent pharmacy

VOLUME 11, ISSUE 1

Find more strategies, tips, and expert advice to improve your business.

MARCH 2022 PUBLISHER & EDITORIAL DIRECTOR Matthew Shamet

The Real Reason Pharmacy Profit Margins Are Declining

EDITOR

There’s one statistic in the industry

Greyson Honaker

data that doesn’t make headlines. A

ART DIRECTOR Lisa Doherty

statistic that tips the profit pendulum.

Most importantly, a statistic that pharmacies can actually control.

CONTRIBUTING WRITER Erin E. Rand

INTERESTED IN ADVERTISING? elements@pbahealth.com

Biden’s Executive Order on Drug Pricing Reform The latest plan from the White House could have a big impact on the prescription drug market, including PBM drug pricing transparency and access to generics and biosimilars.

How to Perform a Break-Even Analysis (and Why You Should) This essential equation determines the exact point you start turning a profit.

Learn how to use it to make your business viable for the longterm.

Elements magazine is published quarterly by PBA Health. © 2022 PBA Health. All rights reserved.

Neither this publication nor any part of it may be reproduced without written permission by PBA Health.

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Follow Elements magazine for pharmacy business tips and advice, news announcements, industry information, and exclusive offers.

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NEWS

TO ERR IS 2021 The top medication safety concerns from ISMP

T

hroughout each year, the Institution for Safe Medication

2021 with guidance on preventing those errors and avoiding safety

Practices (ISMP) identifies common medication safety issues it is

problems this year. Here are some highlights from that report, Top

seeing across the industry. These issues vary and occur at all points

10 Medication Safety Concerns from 2021. For the full top 10 list and

in the dispensing process—preparation, administration, disposal,

recommendations, visit ISMP’s website.

and documentation. ISMP has rounded up the top concerns from

1

MIX-UPS BETWEEN PEDIATRIC AND ADULT COVID-19 VACCINES Although the cap and labeling for the adult and pediatric Pfizer vaccines are different, ISMP received reports of mix-ups. When the caps are

2

MIX-UPS BETWEEN COVID-19 AND FLU VACCINES "Health authorities strongly encouraged people to receive both the flu vaccine and the Covid-19 vaccine during the same visit,” ISMP said. “Unfortunately, once

removed, the labeling differences aren’t clear, so

the flu vaccine was available, mix-ups between the

pharmacies use the wrong vial or syringe. Some

flu and Covid-19 vaccines started happening.” Errors

pharmacies dilute adult formulations to administer

occurred because of product mix-ups, like grabbing

to children without realizing that is not acceptable.

the wrong syringe, or because of staff mishaps, often

“These mix-ups may have scared people, increased

due to shortages. Staff may have been distracted or

vaccine hesitancy, and weakened public health

interrupted while also managing dispensing along with

efforts to get children vaccinated,” ISMP said.

vaccine administration.

ISMP RECOMMENDATIONS

ISMP RECOMMENDATIONS

• Separate the different formulations and label

• Schedule vaccinations for a dedicated time

the storage bins

• Ensure, dedicate staff to vaccinations

• Use barcode scanning during vaccine preparation

• Provide a separate area for administration

• Apply labels to vaccine syringes

3

ADMINISTERING EPINEPHRINE INSTEAD OF COVID-19 VACCINE Because pharmacies keep epinephrine ready to go in case of anaphylactic reactions, some have mixed it up with Covid-19 vaccines. Adrenalin® vials from

4

IMPROPER DILUTION OF THE PFIZER-BIONTECH VACCINES Dilution mistakes have occurred with the PfizerBioNTech vaccine. ISMP stated, “In many cases, practitioners used too little diluent, too much diluent,

Par Pharmaceutical closely resemble the Pfizer-

or diluted the vaccine vial twice. In other cases, the

BioNTech vaccine in size, shape, and label design,

vaccine was administered without dilution, the wrong

and both have purple caps.

diluent was used, or 1.8 mL of air in a syringe was used to ‘dilute’ the vaccine.” Pfizer vaccines with a

ISMP RECOMMENDATIONS

purple cap must be diluted, while Pfizer vaccines with

• Stock epinephrine autoinjectors

a gray cap must not be diluted.

• Store epinephrine in a different location • Use barcode scanning before administration

ISMP RECOMMENDATIONS • Prepare and dispense predrawn labeled syringes • Do not open syringe packages ahead of time • Do not store gray- and purple-capped vaccines together ELEMENTS | The business magazine for independent pharmacy | MARCH 2022

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TRENDS

FINALLY HEAR Are independent pharmacies ready for OTC hearing aids?

I

f you have a bad knee, you simply buy a cane or walker off the shelf

“What I'm most excited about is that the pharmacist can now

of a retailer. If you have minor myopia, you grab a pair of reading

contribute to hearing healthcare, and we can collaboratively work

glasses off a common revolving kiosk. If you have mild hearing loss,

with our audiology colleagues to help get these devices to the

you go to a physician, then to an ear doctor, then to an audiologist,

people who could benefit,” said Lucas A. Berenbrok, PharmD,

and then you take some tests and are finally fitted for a hearing aid.

associate professor of Pharmacy and Therapeutics at the University

That arduous process is one reason only one-fifth of people who would benefit from a hearing aid use one, and why the FDA has

of Pittsburgh.

As the most accessible healthcare professional, pharmacists

issued a landmark proposal to make hearing aids available over the

stand in the perfect position to assist the 30 million people who

counter. “A big part of it is the complexity of the current pathway,”

could benefit from this new category of medical devices. “It fits

said Elaine Mormer, an audiologist and professor of Communication

in the whole picture of the pharmacist as a broad front door to

Science & Disorders at the University of Pittsburgh. “Walking into a

health,” Mormer said. “Communication is such a key part to health,

pharmacy and finding something off the shelf will be much better

for people to get that information about what they should be doing

than the current scenario for a lot of people."

to take care of themselves. Pharmacists can really help keep that

In 2017, the Over-the-Counter (OTC) Hearing Aid Act—part

channel open.”

of the FDA Reauthorization Act—required the FDA to develop regulations for a new category of OTC hearing aid. Although the law defined the new category and obligated the FDA to establish regulations, this new FDA rule will finalize regulations and finally make OTC hearings aids available to the public in 2022. This rule means independent retail pharmacies will have new devices to offer in their front end, as well as a new opportunity to care for their patients. According to the National Institute on Deafness and Other Communication Disorders, nearly 30 million U.S. adults could benefit from hearing aids.

pbahealth.com/elements 8 8 pbahealth.com/elements

What I'm most excited about is that the pharmacist can now contribute to hearing healthcare.

BECOMING EDUCATED

HOW TO RECOGNIZE HEARING LOSS

To help prepare pharmacists for this role, Mormer and Berenbrok

The proposed OTC rules apply to hearing aids intended for

created an accredited continuing education course that teaches

people 18 and older who have perceived mild-to-moderate

pharmacists how to recognize hearing loss, assess the need for OTC

hearing loss.

hearing aids, assist in the selection of devices, communicate with patients with hearing loss, and collaborate with audiologists.

“For many people, they just don't even know where to begin,”

The proposed FDA guidelines outline some of the common indicators of mild-to-moderate hearing loss, but pharmacists can help patients validate their need for a

Mormer said. “Once people start coming through the door for these

hearing aid by recommending a hearing test. Berenbrok said

hearing aids, they’re going to have a lot of questions.” Mormer

that some pharmacies test the patients in their pharmacy

and Berenbrok’s CE course (CHAMP-Championing Hearing Using

through an online test on a tablet.

Accessible Medication Experts at the Community Pharmacy)—as

In his experience with pharmacy patients, Berenbrok has

well as an additional paper on pharmacist competencies—can train

learned two reliable indicators of hearing loss: continually

pharmacists to become a trusted resource for patients and open

asking to repeat himself over the phone and leaning in close

the door to a beneficial, new partnership.

to hear him in person. Mormer added that patients with

“I always like to emphasize the fact that we really believe in this

hearing loss may look directly at your face while you are

collaborative approach,” Berenbrok said. “Even though it's an OTC

talking or have difficulty hearing when there is background

hearing aid, the pharmacist still has a really great opportunity to not

noise.

only offer devices to folks with mild-to-moderate hearing loss but also to collaborate with the local audiologists for those who can't be helped by these devices. So this is a really great way to bring our two professions together.”

PSAP VS HEARING AID Under the new regulations, companies will need to distinguish between Personal Sound Amplification Products (PSAP) and hearing aids, which are not the same thing. The FDA distinguishes them by “intent.”

PSAPs are intended to amplify sounds for those without hearing loss, and hearing aids are intended to improve hearing for those with hearing loss. Hearing aids are classified as medical devices and are regulated for safety and effectiveness. PSAPs are not.

“Because such PSAPs are regulated as consumer electronics and not medical devices, they may be more variable in terms of product quality compared to hearing aids,” the FDA says. “The FDA does not regulate such PSAPs for safety and effectiveness like we do for hearing aids.”

ELEMENTS | The business magazine for independent pharmacy | MARCH 2022

9

SELLING HEARING AIDS

PHARMACIST COMPETENCIES

Before selling OTC hearing aids, Mormer emphasized the

When the Over-the-Counter (OTC) Hearing Aid Act was enacted,

importance of understanding the eligibility requirements. Certain

Berenbrok and Mormer saw a gap that needed to be filled. “No one

criteria exclude people from purchasing aids even though they are

in pharmacy was talking about this,” Berenbrok said. “We quickly

sold over the counter.

recognized that we needed to get people aware and educated on

“There’s a whole host of exclusions for self-care. Understanding

what pharmacists could and should do.”

those exclusions and how to recognize those conditions is huge,” she said. “Some hearing loss is due to a medical condition that

Collaborating with pharmacists, audiologists, hearing aid

should be medically treated. You don’t want to miss that and

manufacturers, and other national organizations, Berenbrok and

have the person buy a hearing aid when they actually have a

Mormer developed a consensus list of competency statements for

brain tumor.”

pharmacists when assisting a patient seeking OTC hearing aids.

Pharmacists should have a plan for referring patients who don’t qualify for OTC hearing aids. If you haven't established a

Below are some of the competencies published in “Pharmacist

relationship with an audiologist, Mormer recommends a website

competencies for over-the-counter hearing aids: A Delphi study.” For

called Find an Audiologist by the American Academy of Audiology

the full list, find the article in the Journal of the American Pharmacists

that helps start that connection.

Association.

It’s important for pharmacists to learn how to communicate with people who have hearing loss. "They need what we call ‘good

COLLECT

communication strategies’ to make sure they're being heard and

Identify medical conditions that can induce or

understood clearly by the patients,” Mormer said. Some of these

exacerbate hearing loss.

strategies include making your face visible, reducing background noise, and in some cases using a portable amplifier.

Recognize the signs and symptoms of hearing loss.

Like with other OTC devices, patients can learn how to use the hearing aid by reading the label and manual. However, pharmacists

ASSESS

may serve as a guide for those who need help understanding the

Assess the individual’s need for referral

instructions or using the product. For example, many hearing aids pair with smartphones for activation, controls, and features, and

Describe hearing health care interventions

some older adults may not have a smartphone or may not be adept

available to persons with hearing loss

at using one.

With this being a new market, pharmacies should be vigilant

PLAN AND IMPLEMENT

about vetting products before stocking them. “Do some homework

Assist patients in the selection of hearing

and make sure that the company is accurately labeling their

devices by considering the individual’s needs

product,” Berenbrok said.

and preferences.

Educate patients about features and functions of hearing devices sold at the pharmacy.

FOLLOW-UP: MONITOR & EVALUATE Access manufacturer resources to assist patients with the care and operation of hearing devices sold at the pharmacy Recommend care and maintenance for hearing devices sold at the pharmacy COLLABORATE Collaborate with hearing health care professionals for the purpose of advice and referrals.

Describe the audiologist’s scope of practice COMMUNICATE Communicate the benefits and limitations of hearing devices sold at the pharmacy

10

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Explain the effects of untreated hearing loss

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RETAIL

THIS IS THE END Inspired end cap tips from a national retail consultant

I

n the universe of retail, end caps are the center point of gravity. As shoppers orbit your store, end caps pull them in. Their heads, like

End caps draw attention not only to their display but also to the rest of the aisle. “The end cap is the greeting. It’s the beginning of

bobbing planets, always rotate their way. Even shoppers zooming

the chapter, letting them know what's down the aisle,” Daves said.

toward a destination can’t resist a well-designed display shining at

“It provides additional purchases rather than just going in there and

the end of an aisle.

getting what’s on their list.”

“There's a lot of purchase power there,” said Therese Daves,

That means pharmacies stand to gain or lose substantial

CEO of Medallion Retail, a retail marketing agency that has worked

dollars depending on how they handle their end caps. “If I owned

with Starbucks, Hershey’s, Barnes and Noble, and other national

a small shop, I would make the end cap work as hard as possible,”

retailers. “They are the premier spot because they are the most

Daves said.

visible aspect of the store.”

RENT OUT YOUR SPACE

Make endcaps the star of your store with these tips.

DON’T DISCOUNT

At many major retailers, brands pay money for a spot on the

You want to move clearance items, so it makes sense to put

end caps. Olay and Revlon might bid on the end cap in Target’s

them on end caps where shoppers will see them. But most

cosmetics section, giving Target extra revenue. Plus, Target still

retail experts advise against that intuition. “I would not

makes money on every product it sells from that end cap.

recommend it because it is such a premier spot,” Daves said.

Daves said, “Small independents could do a collaboration.

They could go out to a group of brands and give them that position to rent. We used to do a lot of venture-supported marketing, and

“You don't necessarily want to be known for discounting. You want to be seen as an authority on products themselves.”

Plus, Daves says, putting clearance items in the back of the

that was a way that retailers could use their real estate with that

store forces discount shoppers to pass regularly priced items

premium spot at the end cap and help with the overhead that goes

on the way, tempting them to add more to their cart.

with owning an operation.”

12

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TAILOR TO YOUR CUSTOMERS

MAKE PRODUCTS STAND OUT

Although Daves advocates learning from other retailers, she

There’s a famous retail book by Paco Underhill called Why We

emphasized the importance of designing end caps to engage your

Buy: The Science of Shopping. Daves calls it her bible. In the book,

unique community. “Independents have the benefit of knowing

Underhill emphasizes the importance of making products stand

who their customer is and what they are looking for,” she said.

out from the crowd. “You want to bring focus to them,” she said,

“They can be more organic and can have fun with it.” Daves

paraphrasing Underhill. “You want to take a purple item and put it

recommended Etsy and Pinterest as good places to find creative

in a sea of yellow items, and that purple item will stand out.”

inspiration. .

LEVERAGE SIGNAGE

BE FLEXIBLE

"Our business is very much about signage and display,” Daves

Don’t be static with your endcaps. Pay attention to seasonal and

said. “I look at Target as being a great role model in the sense that

customer trends and quickly adapt. “Think about who's coming in

they really make their end caps work through signage and display

during your day," Daves said. “Change the flow of the product that

to get shoppers to look at them and engage with them.”

you're trying to sell towards the flow of the traffic."

Daves used older people as an example case for how to use

She pointed to airport stores that alter their look and feel

signage functionally. Because they have a harder time bending

depending on the incoming flights. "If there’s high traffic from

to see the lower shelves, you can use shelf talkers to call out

Japan, they literally change their end caps to attract those

products, making them easier to find.

travelers coming in.”

LEARN FROM OTHERS

OWN IT

Target, Michaels, Barnes and Noble. These are a few of the big

No matter your approach, make it your own. Don’t be afraid to

names Daves mentioned as exemplars in end cap merchandising.

experiment to find what works for you. “Try different things,

Although you want to tailor end caps to your community, you can

change the normal format,” she said. “At the end of the day

glean effective ideas from the national players. “We have to look at

you beat your own drum, which is really fortunate as a small

what they're doing,” Daves said. “That can give us inspiration.”

independent. You can ultimately own what you're doing.”

ELEMENTS | The business magazine for independent pharmacy | MARCH 2022

13

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SOLUTIONS

HOW TO GET PAID Seven services third parties will pay for

T

wenty years ago, Blockbuster was king of the movie rental

many will either go the way of Blockbuster or the way of Netflix. Will

industry. It sat safe on its throne, living off the same business

pharmacies stick to dispensing, or will they diversify?

model year after year until a newcomer upended its rental kingdom

“It is becoming increasingly important that pharmacists

with a different way to do things. Netflix offered customers a

practice at the top of their license and training as margins continue

mail-order subscription service with no late fees, forever changing

to narrow for dispensing services. And, likewise, it is critical that

consumer expectations. But Blockbuster didn’t budge and continued

plans and payers reimburse pharmacists for the provision of

to rely on the tried-and-true rental model.

enhanced services beyond medication dispensing,” said Laura A.

Then as media became more digitized, Netflix foresaw it

Rhodes, PharmD, assistant professor of Pharmacy Practice and

couldn’t simply dispense discs and continue to thrive. Even though

director of the Enhanced Community Pharmacy Services Fellowship

it had already revolutionized the industry, Netflix transformed its

at Palm Beach Atlantic University.

service, becoming the first platform for on-demand streaming and

If you’re looking to add some alternative revenue streams

founding its own film studio that now wins Emmy and Academy

through pharmacy services, Rhodes has provided a number of

awards. Blockbuster went bust, and nearly every movie rental

options that third parties will reimburse.

retailer that didn’t evolve died.

Experts and owners in the independent pharmacy industry realize that pharmacy business is on the same sort of brink, and

1

REMOTE PATIENT MONITORING Rhodes mentioned an emerging service called remote patient monitoring, which “involves the use of digital technologies to capture medical and other health data from patients that is electronically transmitted to pharmacists for assessment.”

Through a partnership with a provider, the pharmacy supplies a monitoring device to the patient, trains the patient on the device, and then

hospitals.

2

CHRONIC DISEASE MANAGEMENT Pharmacies can get paid for a variety of chronic disease management services. “There are many examples of this, and the level of involvement may vary from informal (patient counseling or consultations at the pharmacy counter without a fee) to more formalized services in collaboration with other healthcare providers as a billable service,” Rhodes explained.

One billable service is chronic care management

monitors the patient’s readings—for a total of at least

(CCM), which entails coordination of care activities,

20 minutes a month. The provider bills the payer,

disease state management, and addressing

typically Medicare, and reimburses the pharmacist

preventive care measures, among other services

based on the agreement.

dictated by the particular partnership. To get

When the readings require attention, clinically

reimbursed by Medicare, each patient needs to

referred to as “escalation,” the pharmacist calls the

receive a minimum of 20 minutes of care between

patient to understand the situation and provide the

the pharmacist and provider each month. CMS

necessary treatment, whether that’s counseling or a

reimburses $64.03 for those 20 minutes.

referral to the supervising medical provider.

16

This article outlines only the services that are covered by CMS, private insurers, or other payer partners like provider offices and

pbahealth.com/elements

3

CPESN USA “Some independent pharmacies are utilizing clinical integration as a pathway to payer opportunities for enhanced services,” Rhodes said. CPESN USA is a nationwide clinically integrated network of

6

conduct annual wellness visits inside the office of a provider. These include reviewing medical and medication history, measuring vitals, providing necessary screenings, and offering medical advice

services beyond medication dispensing.

or referrals. Rhodes referenced a couple of studies demonstrating the monetary value of pharmacist-

with health payers, purchasers, and partners to get

led annual wellness visits for physicians’ offices. One

pharmacies paid for enhanced services. Payment

study concluded, “Pharmacist-provided collaborative

methods vary for each agreement and include fee-for-

clinical services in the primary care setting appear to

service, fee-per-member, or pay-for-performance.

… potentially increase[e] the practice’s annual MIPS

CPESN USA has minimum standards for joining

reimbursement by $16,920.”

the network, such as face-to-face access, medication

A portion of that money goes to the pharmacist,

reconciliation, clinical medication synchronization,

depending on the agreement specified in their

immunizations, comprehensive medication reviews,

contract. Most contracts use incident-to billing, but

and personal medication record documentation.

pharmacists could negotiate other types of payment

DIABETES PREVENTION Medicare will reimburse pharmacies for participating in the National Diabetes Prevention Program (DPP).

The program offers group-based lifestyle education

7

with the provider.

TEST-AND-TREAT “Test-and-treat takes point-of-care testing to the next level,” Rhodes said. Typically when patients test positive on POC test, pharmacists must refer them to a medical

sessions to adults with prediabetes or who are at risk for

provider for treatment. But in some states, pharmacists

diabetes. This can be offered by the pharmacy without a

can “treat” the condition by prescribing and dispensing

collaborative practice agreement or state-wide protocol

medicine.

but requires an approval process through the CDC,

This is usually allowed for minor, nonchronic

which requires lifestyle coach training and a certain

health conditions, though some states allow

quota of enrollees.

treatment of even chronic conditions under a

Pharmacies can also offer a Diabetes Self-

collaborative practice agreement. Legality varies

Management Training/Education (DSMT/E) program,

widely. Some states have completely legalized

which includes glucose self-monitoring instructions,

some form of test-and-treat, others allow it under a

diet and exercise education, an insulin treatment

statewide protocol, and some require a collaborative

plan, and motivation for beneficiaries to use the skills

practice agreement. Each instance outlines different

for self-management. To qualify for reimbursement,

criteria and different requirements for qualification,

pharmacies must be accredited by the Association of

so pharmacists need to become familiar with their

Diabetes Care and Education Specialists (ADCES) or

state’s rules.

the American Diabetes Association (ADA). Payment for both diabetes programs is usually fee-per-member.

5

Under a collaborative agreement, pharmacists can

pharmacies that focus on providing enhanced The CPESN USA network contracts directly

4

ANNUAL WELLNESS VISITS

Payment methods are still in flux, but besides cash payment, pharmacies can partner with providers on a “collaborative billing model with shared

HOSPITAL DISCHARGE

performance-based payment incentives.”

Sometimes called transitions of care, hospital discharge services involve delivering meds prescribed by the hospital, performing medication reconciliation, and checking in regularly for a month. Medicare and private insurers will reimburse for the services, typically using a fee-for-service or a fee-permember model, which can accumulate quickly and substantially. Some pharmacies report a 300 percent return on investment for transitions of care services.

Hospitals may also pay for discharge services directly to help keep down readmissions.

ELEMENTS | The business magazine for independent pharmacy | MARCH 2022

17

BOOST

FEATURE

YOUR BENEFITS

A complete guide to employee benefits H

ealth insurance. Paid leave. Retirement plans. For most independent community pharmacies, there is likely no legal

obligation to provide these benefits or others to your employees.

They can be costly, and with profit margins already thin, why should you bother with an expensive benefits package?

“The crux of it is that talent is hard to come by,” said Grace Jaén, vice president of health and welfare at G&A Partners, a professional employer organization that assists small businesses with tasks like human resources, benefits, workers compensation, and payroll. “Ultimately the only reason that you have to offer benefits is to recruit and retain employees.”

“When a company provides benefits such as health insurance or tuition reimbursement or other voluntary benefits, generally, it helps in attracting employees and it also reduces turnover,” said John Dooney, a knowledge advisor for the Society for Human Resources Management. “That’s really one of the best arguments for providing them, and it shows that the company cares about the health of their employees."

Think of employee benefits as an integral part of your compensation plan rather than a series of optional extras. “Your benefits package is where you can strategically differentiate your compensation from the competition,” said Tae Youn Park, associate professor of human resources studies at Cornell University’s ILR school.

According to the Bureau of Labor Statistics, employers spend around 30 percent of their total compensation package on benefits, meaning for every $100 you spend on compensation, $70 goes to wages and $30 goes to benefits. “Communicating about that 30 percent is really critical,” said Park. “Employees tend to not think about the 30 percent, but it can be very useful in signaling that it’s better to work for you than it is at some other location.”

This comprehensive guide to employee benefits will help you tap into the perks employees want the most so you can retain your best team members and win over top talent.

18

pbahealth.com/elements

HEALTH INSURANCE I

f your pharmacy has fewer than 50 full-time employees, there's no legal obligation to provide health insurance. But to remain

competitive as an employer, it's a good idea to provide it anyway.

"People tend to think of benefits like health insurance as a legal requirement, even though that's not the case," Park said. "They just have expectations that businesses are going to provide it."

Health insurance can be costly for an employer—the Kaiser Family Foundation found the average annual cost to employers was $6,440 per employee in 2021—so use a broker to shop around.

"Carriers will have different requirements, but typically the employer

FSA OR HSA?

is going to pay for at least 50 percent of the medical premium on base plan," said Jaén. "That's the lowest. It's more standard that we see an employer pay 75 percent of a base-level plan and use that same dollar amount to apply to other higher-tier plans."

When choosing a health insurance plan for your employees, Jaén

Flexible spending accounts (FSAs) and health savings accounts (HSAs) both allow employees to save for qualified health expenses

recommends performing a benchmark study of similar markets to

before taxes. Consider the features of each when choosing a health

find out what they are doing to ensure your package is comparable

insurance plan for your employees.

or better. To keep your health insurance plan, you may want to offer a menu of plans with a range of deductibles, premiums, and care options.

Preferred provider organization (PPO) plans have a large network of doctors, hospitals, and specialists. These come with a range of premium and deductible options.

Health maintenance organization (HMO) plans have a smaller network of providers, and employees must be referred to see a specialist. These come with lower premiums and deductibles.

"Employees should ensure that the plan they choose allows a

HEALTH SAVINGS ACCOUNTS

• • • • • •

Become available with high deductible health plans Are owned by the employee, and they can take the savings when they leave their job Savings carry over from year to year and never expire Can be used as long-term or retirement savings Cannot be used for dependent care Have a maximum contribution limit of $3,650 for individuals and $7,300 for families

spouse to be added to it," Dooney said. The ACA requires dependent eligibility, but not spouses, and having that option will create an added value for employees.

Also consider add-ons like dental and vision insurance, shortterm disability, or an employee assistance program. "This kind of ancillary package is something that the employer doesn't have to spend any money on, but it gives employees the option to get plans that they may not otherwise have access to, sometimes at a discounted rate," said Jaén.

FLEXIBLE SPENDING ACCOUNTS

• • • • • •

Become available with a traditional employer-provided health plan Are owned by the employer, and savings must be forfeited when employees resign A maximum of $570 can be carried over each year, depending on the plan Cannot be used as long-term or retirement savings Can be used for dependent care Have a maximum contribution limit of $2,850 for qualified health expenses and $5,000 for dependent care expenses

ELEMENTS | The business magazine for independent pharmacy | MARCH 2022

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RETIREMENT BENEFITS R

etirement options typically fall into two categories: a defined benefit plan or a defined contribution plan.

A defined benefit plan is what many think of as a traditional

pension plan in which the employer funds a promised amount for retirement. “There aren’t many of these plans anymore. They used to be more popular, but maybe 5 percent of organizations outside the government offer them,” said Dooney.

A 401(k) falls under the defined contribution plan category, which means that employees make contributions to fund their own retirement. “This shifts investment risks from the business to the employees. The stock market has been performing fairly well in the past decades, so employees have been getting more returns from the defined contribution plan than the defined benefit plan,” Park said.

While there are other options for retirement plans, a 401(k) is by far the most popular because it allows employees to make contributions before taxes. If you decide to offer a 401(k), the next decision is whether you will match contributions, and if so, how much.

When employers offer a match, they allow employees to essentially double their retirement investment. For job-seekers who are thinking about long-term financial stability, an employer that offers a 5 percent match will be more appealing than one that offers a 2 percent match.

“Only about half of employers who have a 401(k) plan in place offer any sort of match,” said Jaén. For employers that do offer to match contributions, the average is around 3.5 percent.

When offering a match, be sure to budget for the highest potential costs, Jaén said. Assume that 100 percent of your employees will enroll and max out their potential matching contribution. "It's very hard to give an employee a benefit and then scale it back later if you find you can't afford it," she said. "If you're just getting started with 401(k) matching, start where you can really feel comfortable. You can always increase the benefit later, but it's so hard to take it away."

401(K) TAX BENEFITS A 401(k) isn’t just a good recruiting tool—employers can also use their 401(k) plan to reap additional benefits come tax season.

STARTUP COST TAX CREDIT The SECURE Act rewards small businesses that set up an employee 401(k) plan by creating a tax credit for qualified startup costs. The credit is whichever is greater: $500 or the lesser of $5,000 or $250 multiplied by the number of non-highly compensated employees.

Businesses can claim this credit for up to three years.

AUTO CONTRIBUTION TAX CREDIT Employers can claim another $500 in tax credits for three years by automatically enrolling eligible employees in the 401(k) plan.

MATCHING CONTRIBUTION DEDUCTION If employers opt to match contributions to employee 401(k)s, those contributions can be considered business expenses and treated as tax-deductible.

1000-HOUR ELIGIBILITY While there is no requirement for your pharmacy to offer a 401(k) plan to employees, if you do, you must adhere to a regulation that requires all employees who work at least 1,000 hours in a 12-month period to be eligible for enrollment.

In 2024, provisions of the SECURE Act will expand eligibility even further. The SECURE Act requires that long-term part-time employees also be allowed to enroll in a 401(k) plan. This applies to non-union employees who have worked between 500 and 999 hours in the previous 3 consecutive years.

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PAID LEAVE W

hile not a legal requirement in most states, offering some sort of paid leave is necessary to win over employees. “It’s more a

matter of how many days you will offer than whether to offer them, in my opinion,” Park said.

Paid leave falls into two categories, combined paid time off (PTO) that includes both sick and personal leave or separate vacation and sick leave buckets. “Generally, if it’s PTO with combined sick and other leave, the employer will have to pay out when an employee leaves, so when that occurs, an employer could be paying out more with PTO versus just vacation leave,” Dooney said.

“If you’re just getting your toes in the water with paid leave, we recommend starting out with 80 hours of combined PTO for

PARENTAL LEAVE Parental leave as an employee benefit was once uncommon, but employees are now more eager for it.

new employees,” Jaén said. Typically, the amount of paid leave an employee has will increase with their tenure at the company.

According to the Bureau of Labor Statistics (BLS), employees with a one-year tenure tend to have between 5 and 14 vacation days,

“It’s becoming a more popular benefit than we have seen historically,” Jaén said. “Some companies put it as part of their PTO package, or they can offer it separately.”

while those with a 20-year tenure will have 20 or more. On average, workers of all tenure have 7 sick days.

“Younger generations are paying a lot more attention to mental and physical health issues,” Park said. “In that case, offering enough

It’s important to note that parental leave is different from FMLA leave, which is often used by new parents who want to take unpaid leave for the birth and care of their newborn child.

paid time off is a very effective way for them to take care of that.”

Most workers who receive paid leave are full-time employees,

There is also a distinction between maternity leave and parental

but part-timers will also get sick or need the occasional day off.

leave. Maternity leave is time for mothers to recover from

Offering some form of paid leave to part-time employees will

childbirth. Often, maternity leave policies will specify a leave time

discourage them from coming in when they are sick, which is

of 6 weeks to recover from a normal vaginal delivery and 8 weeks to

especially important in a healthcare setting.

recover from a c-section.

Paid leave is also a good tool to keep your best employees content during a labor shortage. “When you’re dealing with skilled

Parental leave, however, is gender-neutral, and it is intended to

labor, you are trying to keep them from leaving with their hard-to-

provide new parents time to bond with their child. “If you’re going

replace skills, so you may be better off having generous benefits in

to offer parental leave, you need to offer the same amount for both

place,” Dooney said.

the mother and the father,” Jaén said.

When building a parental leave policy, you’ll also have to decide whether you want to offer it as a paid leave or an unpaid leave. “We see that about 40 percent of companies offer some sort of paid leave for new parents, but it’s at all different levels,” said Dooney.

If you offer short-term disability insurance for your employees, new mothers can use that benefit to keep getting paid a portion of their wages while they aren’t working.

ELEMENTS | The business magazine for independent pharmacy | MARCH 2022

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COMPENSATION I

EXEMPT VS NON-EXEMPT

n a job-seekers market, a competitive wage is the most effective way to win over the best talent.

"People come to work for wages," Jaén said. "Medical benefits

NON-EXEMPT EMPLOYEES

are a factor, too, but wages are really the major consideration for why

Certain employees are entitled to protections under the Fair Labor

an employee would think about moving to a new job."

Standards Act. Classified as non-exempt, these employees are

She said that G&A Partners helps clients determine appropriate

entitled to earn the minimum wage, and they must receive overtime

wages by creating a job description and performing a benchmark

pay when they work over 40 hours a week. Non-exempt employees

study based on the described duties. Pharmacies that don't have the

are typically paid on an hourly basis, or they have a salary that is

resources to do a full benchmark study can use resources like the

less than $35,568 a year.

Bureau of Labor Statistics, Glassdoor, and even Google, to determine what wages are appropriate.

As we come out of the recession caused by the Covid-19 pandemic, keep the changing job market in mind. With many employees moving to new jobs and higher than usual inflation, wage expectations are being pushed upward.

"It costs more to bring people on to perform a job right now, so the existing employees will have comparatively lower compensation in comparison," Dooney pointed out. Employers should perform salary reviews in order to ensure that long-term employees are not getting left behind. If you don't adjust salaries, you encourage employees to leave and get a higher salary elsewhere.

"We're seeing a lot of amazing employees getting recruited by other companies right now," Jaén said. Sometimes they go back to their current employer and give them a chance to make a counteroffer, but sometimes they don't, so it's important to proactively pay your mission-critical employees a high wage.

EXEMPT EMPLOYEES Exempt employees, on the other hand, are not required to receive overtime pay (although employers can compensate exempt employees for extra work if they wish). They also typically earn a salary instead of hourly pay.

To be classified as exempt, the employee must pass the Department of Labor’s duties test, which determines whether they qualify for one of the following exemptions: •

Administrative exemption

•

Executive exemption

•

Learned professional exemption

•

Creative professional exemption

•

Outside sales exemption

BASE PAY VS VARIABLE PAY

.

There are two ways to think about compensation.

The most common way employees are compensated is through a flat payment. This could be an hourly wage or a yearly salary, but employees know exactly what compensation they will get for the work they put in.

But you can also reward your employees by implementing a profitsharing agreement on top of that base payment. "Under this model, you share the annual profit. You tell the employees about how the business is going and how much you earned that year, and then you tell them how much of that you are going to share with them," Park explained.

A profit-sharing plan will make your employees more invested in the success of the pharmacy, and the promise of extra income at the end of the year can differentiate you from competitors who are only offering that base rate.

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TUITION ASSISTANCE

PET INSURANCE Don't just think about your employees when building a benefits package—show them you care about their furry friends, too.

TELEMED ASSISTANCE

"During Covid, many people adopted pets, and so pet insurance is the new benefit that seems to be of interest to employees," said Dooney.

A comprehensive pet insurance policy works similarly to a human health insurance policy.

It will cover vet bills, ranging from annual wellness visits to chronic conditions to acute illnesses.

Tuition support is a way to invest in individual employees while also investing in the future of the business.

"Offering tuition support will help you attract the type of employees who want to continue their education while working," Park said.

When designing a tuition assistance program, be clear about the conditions attached and what kind of programs are eligible. You can reap a long-term benefit by providing assistance to employees who want to become pharmacists or pharmacy techs, but there's less of a benefit in assisting an

Because veterinary bills have the potential to be extremely costly, a pet insurance policy can be an incredibly valuable benefit for current employees and job candidates who have pets.

The hot topic in the past five years, but especially in the last year, is telehealth,” said Jaén.

These services are available to your employees 24/7. They can talk to a healthcare professional who can write them prescriptions or connect them to the care they need.

"It's dirt cheap and the reception by employees is hugely positive," Jaén said. "The perceived value of the benefit is astronomical compared to the actual cost to the employer."

Telehealth plans may be available as an add-on to your standard health insurance, but Jaén pointed out that when it comes as a bundled

employee with their modern dance degree.

service, employees typically have to pay a

In addition to narrowing down the programs

standalone plan, there will be no charge to

that are eligible for assistance, you can also

co-pay, which makes it less popular. With a employees.

place conditions on things like which schools employees can attend or what GPA they must maintain.

You can even exclude up to $5,250 per employee from taxable income when you provide tuition assistance at the graduate or undergraduate level.

ELEMENTS | The business magazine for independent pharmacy | MARCH 2022

23

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PRSRx.com

SPOTLIGHT

LOW DOSE, HIGH PROFIT This compounded drug has a 50 percent profit margin and is changing lives

O

ne of Bradley White’s pharmacy patients had been to five

cooked, and played with her kids. “I felt like I got my life back,” she

doctors and tried half a dozen medications to relieve her

said. “I don’t know how I would function if I didn’t have this.”

extreme fatigue and persistent insomnia. Her thyroid condition had

In the four years he’s specialized in low-dose naltrexone, White

gotten so bad that she essentially lived on the couch. She couldn’t

has been a part of story after story of patients suffering from

cook, play with her kids, or do any of the other activities she used

chronic ailments only to find relief in LDN, wishing they had heard

to enjoy.

about it long ago. “The coolest thing is you've got a patient that says,

This went on for months until she heard about a special medicine that could only be concocted from scratch—one she had never seen on TV, heard on the radio, or come across on the internet. A drug no one advertised because no one manufactured it.

The only way to get it was through the increasingly rare

‘This drug changed my life,’” White said. “It's something that I am really pleased to be a part of.”

Another bonus for pharmacy owners is that low-dose naltrexone offers not only exceptional outcomes but an exceptional margin. “It can be upwards of 50 percent,” said White, who owns

professional: a compounding pharmacist who created the solution

Medicine Center Pharmacy with four locations in Ohio. “You don't

from raw ingredients, made specifically for each patient according

have to fight with a PBM. You don't have to worry about the audit.”

to their needs. This compounded cure was called low-dose naltrexone (LDN).

After finding the right dose and after enough time, LDN changed her life. Her fatigue disappeared. She got off the couch,

It’s a solution where everyone wins. “It’s a niche market that gives not only a business opportunity for compounding pharmacies at a healthy margin, but is low cost for the patients with a high probability of success.”

ELEMENTS | The business magazine for independent pharmacy | MARCH 2022

25

WHAT IS LDN?

And you’re not billing for time. On top of advising the patient and

Naltrexone itself has been used for decades to treat opioid addiction

working to get the right dose, you have to take the time to learn the

and alcoholism. But low-dose naltrexone is a recent off-label

science, compile the research, and educate the physicians.

development and has been shown to improve just about everything.

Numerous studies attest to its diversity of benefits and to the

THE PRESCRIBER PROBLEM

diversity of diseases it treats: fibromyalgia, Crohn's disease, multiple

Compounding LDN is one thing; getting providers to prescribe it

sclerosis, chronic pain, depression, autism spectrum disorders,

is another. Manufactured drugs have drug reps, clinical studies,

chronic fatigue, and many, many other conditions.

and loads of promotional material behind them. Because LDN

The studies vary in their evidence and quality, however. Some

is not a patented drug, its only advocates are those who have

are based on randomized, double-blind, controlled trials—the gold

discovered it through their own research, a colleague, or a patient.

standard in scientific studies. Others are tentative conclusions

That means many doctors aren’t aware of LDN or don’t know much

reached from animal studies that haven’t been peer-reviewed. For

about it. Because of this, White has had to spend much of his time

the most comprehensive information on LDN, White recommends

on education.

the LDN Research Trust.

Naltrexone blocks opioid receptors to stimulate the release of

“Doctors love data, and they love studies to back up their practice,” he said. “They are looking for process validation, and

endorphins, which relieve pain and modulate the immune system.

they're looking for basically the standard of care to back them up

It also blocks the toll-like receptor 4 (TLR4), reducing inflammation.

for not only liability but effectiveness.”

In large doses, this produces unpleasant side effects and can negate

Sometimes White gets referrals from physicians, but often

immune modulation. In small doses, side effects virtually disappear,

a patient comes in and says they want to try LDN but have no

but all the benefits remain. A dose of 4.5mg provides the same

physicians to help them. So White goes to their physician with

number of endorphins as a dose of 50mg, according to studies by

reputable studies in hand—from Harvard, Stanford, and the like—

the originator of LDN, Dr. Bernard Bihari. When White learned of

and explains how the drug works, the benefits, and the costs.

its benefits, he was surprised. “Initially it was like, is this too good to

And the case isn’t hard to make. The drug is inexpensive, has hardly

be true?”

any side effects, and offers tremendous benefits. “There's nothing to

LDN requires processing a standard 50mg tablet to a dose between .5mg to 16mg, or getting the ingredients in bulk to create

lose on the patient side or the doctor side,” White said.

White also hosts online and in-person seminars. He talks with

capsules, tablets, or other solutions to meet the required dose.

patients over the phone or right there in the pharmacy, sometimes

There is no product on the market with these doses of naltrexone,

pulling out his binder stuffed with evidence from academic studies.

and you can’t simply break the pill in half as you might with other

He cold-calls doctors or reaches out to primary care providers of

drugs. The only way to get it is through a compounding pharmacy.

particular patients. Part of his success depends on these forms of

“This is a perfect example of why compounding pharmacies

outreach, and part of it depends on the credibility the pharmacy has

are relevant in society,” White said. “We are fitting a need that is

built over time in the community. Because he’s a reputable source,

not available commercially in the marketplace. And the thing that's

doctors who get a cold call from him are willing to listen.

interesting about low-dose naltrexone is doses can be all over. So we make 26 different dosage forms and strengths right now.”

GETTING STARTED White’s pharmacy already compounded medications, so it was a simple thing to add to his practice. “The good thing about LDN is on the regulatory side of things, it is not a controlled substance. It is not a hazardous chemical. If you're already compounding and you have appropriate equipment like capsule machines, powder containment, hoods, and procedures for safe practices, you can start right now.”

The biggest obstacle to clinical success is the titration dosage schedule. One patient might require as little as .5mg for effect while another 9mg. Too much or too little and the patient may not experience any benefits. White starts patients on a dose of .5mg and titrates up to find that Goldilocks spot.

"If everything's wonderful, sometimes benefits could take less than a month,” White said. “Sometimes it's six months. It is very individualized.”

This clinical challenge presents a business challenge because working with patients to get the right dose takes a lot of time.

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“You don't have to fight with a PBM. You don't have to worry about the audit. You help the patient.”

CHANGING LIVES Offering LDN requires far more than simply compounding medicine and getting it to the patient. It means becoming a counselor, adviser, and educator. It means persisting through resistance, skepticism, and ignorance. It means enduring the long process of trial and error.

But for White, it has been more than worth it. “My favorite is getting that voicemail, email, or conversation of, ‘Hey, this really helped. Thank you.’ You know, a lot of times you need to write those down when you have those bad days, so you can go back to them and remember you're doing this for the right reasons.”

MONEY

INJURY INCOME How to streamline your workers’ compensation claims

W

orkers’ compensation: for patients who are injured at work, it’s

said. In that case, the patient may have to pay a cash price for their

a critical service for getting the medical treatment they need.

prescription and take the receipt to their workers’ compensation

But for pharmacies without the proper tools, processing those claims can easily turn into a time-consuming hassle. While the pharmacy

insurance provider and get reimbursed.

Since workers’ compensation claims can be somewhat

dispenses the medicine as they would with any other prescription,

sporadic, Hayat Pharmacy doesn’t market specifically to

processing workers’ compensation claims requires extra steps and

those patients. “Usually, whoever patients have been using

adds financial risk.

as their regular pharmacy provider, they also use for workers’

Typically, patients with a workers' comp claim won’t have the necessary documentation when they arrive at the pharmacy because it’s handled separately from the general prescription

compensation,” Kaloti said. “For us, it’s mostly our existing patients using the service.”

However, there are ways that pharmacies can promote their

coverage. “Unlike commercial health plans, no one is pre-enrolled

workers’ compensation services to capture more of that market,

in workers’ compensation. You only get enrolled after an injury

and in those instances, ServRx helps its client pharmacies with

happens,” said Breck Rice, co-founder and chief revenue officer of

outreach. “We have some marketing kits that pharmacies can use to

ServRx, a third-party processor for workers’ compensation claims.

promote their services, especially to places like orthopedic practices

That means by the time they need the medicine, that enrollment

or pain practices,” Rice said. “Those tend to be the places that have

process likely hasn’t been finished yet and the patient may not have

the most workers’ compensation patients.”

proof of coverage. But they know they should not be paying the pharmacy for it.

That puts the pharmacy in a tough spot because they don’t want to refuse treatment for someone in need. “If a patient needs medication for a work-related injury, it’s often something that needs treatment today,” Rice pointed out. As a third-party processor, ServRx works by paying the pharmacy for claims

"Whether or not we collect on the backside, the pharmacy is guaranteed payment."

upfront, then doing the legwork of confirming the veracity of the

GETTING PAID

claim. “Whether or not we collect on the backside, the pharmacy is

By using a service to process workers’ compensation claims,

guaranteed payment.”

pharmacies can sidestep interference from PBMs—but that

In addition to mitigating the financial risk, ServRx helps

doesn’t always mean higher reimbursements. Kaloti has found

to decrease the administrative burden of processing workers’

his workers’ comp reimbursement to be on par with his typical

compensation claims. “It allows the pharmacist to get on with their

prescription reimbursements.

day,” Rice said. “They don’t have to pick up the phone and make a

Rice pointed out that reimbursement varies from state to state.

bunch of calls to the employer and verify that the patient actually

“There’s usually a state industrial commission that establishes a

got hurt on the job. That may be three or four phone calls just to

fee schedule for workers’ compensation claims, and there isn’t a

figure out if it’s even a compliant claim or not.” Even after confirming

blended pricing system like the PBMs put out,” he said.

the claim is authentic, workers’ compensation claims often require

ServRx uses the state’s fee schedule to determine

prior authorization from an insurance adjuster, and ServRx handles

reimbursement for their pharmacy clients. “It’s typically going to be

that.

somewhere around 70 percent of AWP on the generics and closer Milwaukee-based Hayat Pharmacy uses ServRx for workers’

to 80 or 85 percent of AWP for brands, but it does depend on what

compensation claims, and pharmacy president Tamir Kaloti

the state fee schedule is,” Rice explained. “If a state fee schedule is

explained that it makes things easier on the patients. “The patient

only 90 percent of AWP, we can only bill based on that 90 percent

has the right to choose where they want to go get their prescription

of AWP.”

filled, and not all pharmacies will have a claims processor to help them, which means they may not know how to process or bill it,” he

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He said that in most states ServRx beats PBM reimbursements, and he noted that there are certain medications he routinely

reimburses above the PBM rate. “I like to use the meloxicam example because there’s such a huge variance. PBMs will pay $4 or $5, but the pharmacy should be making closer to $90 for that medication. So, when the PBM reimburses, you get $4, but when

TOP CAUSES OF WORK-RELATED INJURIES According to the National Safety Council, these top four categories caused over 90 percent of all workplace injuries in 2020.

ServRx reimburses, you get $90.”

He also explained that certain states—including California, Ohio, and North Dakota—have a state monopoly over workers’ compensation claims, which means a claims processor won’t necessarily be able to secure pharmacies a more favorable

1

reimbursement rate.

PBMS AND WORKERS’ COMP Unfortunately, workers’ compensation claims aren’t automatically free from PBM interference.

“PBMs will buy up workers’ compensation networks and roll that into one of their managed care networks so they can reimburse at lower rates,” Rice explained. “Overnight, pharmacies that were in-network can go from making $40 or $50 in reimbursements to $4 for the same medications.”

He also said that sometimes pharmacies unwittingly make commitments in their contract that give PBMs the right to process workers’ compensation prescriptions. If they decide

2 3

EXPOSURE TO HARMFUL SUBSTANCES OR ENVIRONMENTS Includes electricity, radiation, noise, temperature extremes, contagious and infectious diseases, and more

SLIPS, TRIPS, AND FALLS Includes when workers catch themselves before falling; falling on the same level; or falling or jumping from a higher level

OVEREXERTION AND BODILY REACTION Includes excessive physical effort and microtasks that create strain on the body

to use a third-party claims processor, the PBM can terminate their contract.

Before you start using a claims processor, Rice recommended having someone go through your current contract terms to make sure you haven’t made such a commitment and won’t be punished for going outside the network. This overreach is also another reason it is critical to advocate for PBM reform on a state and federal level.

“Community pharmacies should be able to choose which

4

CONTACT WITH OBJECTS AND EQUIPMENT Includes when a moving object or piece of equipment strikes a worker; when a worker is squeezed, pinched, compressed, or crushed by equipment; when a worker is struck by a collapsing object; and more

networks make sense for them to be a part of,” he said. “Workers’ comp is not a Medicare program, it’s an entitlement program, and pharmacies should have the opportunity to participate or not participate without PBMs putting pressure on them.”

MOST COMMON WORKERS’ COMPENSATION INJURIES In an analysis of the claims from a large insurance company, the International Journal of Environmental Research and Public Health found that these were the most commonly claimed injuries for workers’ compensation cases.

Strains: 30% Contusions: 21% Lacerations: 12%

Sprains: 9% Punctures: 5% Other 23%

ELEMENTS | The business magazine for independent pharmacy | MARCH 2022

29

OUTLOOK

CHRONIC CARE COLLABORATION Chronic care management offers high reimbursement for low investment

A

round two-thirds of Medicare patients are living with

preventive care measures. “It’s really about creating a program that

two or more chronic conditions—and with those chronic

is meaningful for patients and to the providers to help impact their

conditions comes overall poorer health outcomes and higher risk of expensive hospitalizations.

To mitigate those risks, Medicare will pay physicians to

quality measures,” Sinclair said.

Burns notes that because medication management is part of the comprehensive care plan, it is a perfect space for pharmacists to

manage patients’ conditions through a service called chronic care

step into. “So many chronic conditions are managed by medication.

management, presenting an opportunity for pharmacist-provider

If medications are used optimally by patients, that will help control

collaboration. Together, pharmacists and physicians create a

their conditions,” she said.

comprehensive care plan for eligible patients—those with two

Other things that could fall under the umbrella of CCM include

or more chronic conditions—to help maintain or improve their

connecting patients to social services that provide assistance

health. But it is also a chance for pharmacies to get more involved in

beyond direct medical treatments, such as transportation to an

clinical care.

appointment. “It’s a comprehensive mechanism providing dedicated

“I think it’s a wonderful opportunity for community pharmacies and pharmacists to explore because it’s the type of service that really plays to pharmacists’ expertise,” said Anne Burns, vice

attention to addressing the patient’s overall healthcare needs,” Burns said.

Chronic care management services are performed monthly,

president of professional affairs at the American Pharmacists

and pharmacists generally meet with patients over the phone. “It’s

Association (APhA).

very flexible, which is a good thing and a bad thing, because a lot of

Jessica Sinclair, director of education and research outcomes at Avant Pharmacy and Wellness Center said that chronic care management has become one of the pharmacy’s “bread and

times people can get stuck on what they should be doing for CCM every single month,” Sinclair said.

To get reimbursed by Medicare for CCM services, each patient

butter” services. Through the Avant Institute, the pharmacy trains

needs to receive a minimum of 20 minutes of care split between the

other pharmacists how to implement services like CCM in their

pharmacist and provider each month. Pharmacists are considered

own pharmacies.

“clinical staff,” and they can provide part or all of the 20 minutes of

“We really appreciate the value chronic care management

care, while the billing provider is expected to perform an additional

brings to patient care and how it has impacted our business, and

15 minutes of work. The time spent working behind the scenes on

it’s so exciting that more pharmacists are wanting to get into

clinical activities counts toward that number, Sinclair explained.

this space,” Sinclair said. “It really will help move the pharmacy profession forward if we have more pharmacists conducting this type of service in collaboration with providers.”

On the business side, what makes chronic care management services appealing for pharmacies is a healthy reimbursement.

CMS significantly increased the reimbursement rates in 2022.

In 2021, the reimbursement for 20 minutes of CCM services was $41.17, divvied up between the pharmacist and provider. In 2022, that reimbursement has jumped to $64.03. “We’re excited to see it become an even more profitable program,” Sinclair said.

PRACTICALITIES OF CCM On a patient level, chronic care management services in the pharmacy typically happen in between the patient’s visits with their provider. What that entails varies. It could mean coordination of care activities, disease state management, or addressing

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BENEFITS FOR PATIENTS The patients who benefit the most from chronic care management are those who might not have the resources or knowledge to maintain their conditions on their own. CCM services are usually initiated by the billing provider, and patients must consent to receive the services. Like most Medicare services, CCM is also subject to patient cost-sharing.

“It’s really designed to give patients who often slip through the cracks the attention they need to ensure their chronic conditions are maintained—or in some cases even improved—through regular interventions with a healthcare team,” said Burns.

Sinclair notes that by providing a monthly touchpoint with a healthcare professional rather than waiting for a visit every six months, provides an opportunity for patients with complex needs to get necessary interventions earlier. “Patients really do like to know that their provider team is monitoring them more closely and helping them reach their goals,” she said. “And while there is an individual approach to care, there are some core things that we do through CCM to address the social determinants of health and help them navigate the healthcare system.”

In addition to asking questions about medications and treatment, CCM patients often seek help setting up the proper screenings and preventive services. “They might not know how to follow through on all of that on their own, or they might not know they need to,” Sinclair said. “It’s a second chance to make sure they are addressing all those preventive care measures.”

“We really appreciate the value chronic care management brings to patient care and how it has impacted our business. It really will help move the pharmacy profession forward.”

CREATING A PARTNERSHIP As a team-based service, chronic care management must be overseen by a physician or other CMS-qualified health care professional (QHP), such as a nurse practitioner or physician assistant. This means that independent pharmacies can’t get a program up and running without a partnership. Unfortunately, getting that first partnership off the ground can be a challenge.

“We find that one of the major barriers pharmacies report when starting their program is securing that first provider,” Sinclair said. “But after they’ve started with that first provider, they’re able to articulate what they’ve done with their program when making partnerships with other providers in the area.”

Burns recommends seeking out physicians in your area with whom you already share a large patient base. Make an appointment to speak with local physicians about CCM and explain what the pharmacy can do to monitor and manage patients. She added, “Sometimes it takes time to get physicians to understand what the pharmacy can bring to the table and how information will be communicated.”

Make sure to talk about the services you already offer beyond dispensing. “If you’re offering services like immunizations or MTM, let the physician know how you have leveraged these services to impact patient care,” Sinclair said. “It’s really a team effort to offer CCM programs. I would say that without someone like a pharmacist on board, a lot of practices are hesitant to implement these programs because there is so much that goes into making sure that all the requirements are met.”

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If you don’t already have a system for electronic health records

Sinclair stresses that time management will be crucial to

(EHR), getting one in place could help sell the program to physicians.

running a successful CCM program. “There needs to be someone

“Physicians and other QHPs are required to have a certified EHR for

to make sure we’re not wasting time. If there is 19 minutes and 30

recording patient health information and the patient’s care plan for

seconds of CCM care accumulated for the month, we don’t reach

CCM services,” Burns said. “Having an interoperable system that

that 20 minutes and it can’t be billed.”

allows you to share information electronically with the physician makes it a lot easier to communicate about a patient’s care plan.”

Though there is no additional training required, both Sinclair and Burns recommend brushing up on the fundamentals of one-on-one patient care. “Familiarity with the chronic diseases

CREATING THE CONTRACT

patients have is very helpful to improve the management of their

Once you have a provider on board, you’ll have to draw up a

chronic conditions,” Sinclair said. “It doesn’t necessarily require

contract that breaks down how the program will be managed and

extensive knowledge of disease state management, but when

how each party will be paid for their time. The program will be

pharmacists have some experience in the management of major

under the direction of the physician or QHP who is able to make

chronic conditions, it makes the program more effective and

diagnoses and assess a patient’s progress.

more valuable.”

A detailed contract is critical because at the end of the month the provider is the party that bills Medicare for the service, not the pharmacy. After the provider is reimbursed, they pay the pharmacy according to the terms of the contract.

The terms of the contract vary based on what providers need and what pharmacies contribute. Sinclair explained that some pharmacies create a fee schedule where they get paid a set portion of the reimbursement, while others set up a productivitybased arrangement where payment changes based on what they contribute to the service. “There are a couple of different ways to do it, and there’s no one-size-fits-all solution. It really depends on the individual relationship between the pharmacy and the clinic.”

A new rule from CMS allows pharmacists and providers to bill for more time if they end up spending more than 20 minutes on CCM services for a patient. “For a while, we were in a situation where pharmacists would spend 40 minutes a month with the patient but they could only bill for 20 minutes,” Burns said, which meant the service could quickly become unprofitable. In 2022, clinical staff can bill for additional 30-minute increments at a CMS rate of $61.26.

“Obviously, you have to document it and justify why you’re spending that much time with the patient,” she added. “Oftentimes with the initial visit with the patient, the pharmacist will spend time where an add-on code can be helpful.”

MANAGING THE PROGRAM Because chronic care management services are often provided on the phone and there’s no need to buy additional equipment, pharmacies can run a program with extremely low overhead.

“From a dedicated space and equipment perspective, getting a CCM program started is generally not as onerous as some other pharmacy services,” Burns said. “It’s mainly about having the time to put a documentation system in place and pharmacists having dedicated space to conduct the telephonic service.”

“I would say that for upfront work, make sure that someone in the pharmacy is able to learn all the background information,” Sinclair said. “It does require someone who is dedicated to the

“If you’re offering services like immunizations or MTM, let the physician know how you have leveraged these services to impact patient care.”

program, whether that be a couple of days a week or a half a day a week dedicated to learning. They are going to have to step away from the bench and learn how to implement things, especially when it comes to the rules and regulations around medical billing to ensure they are meeting all the requirements from Medicare.”

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DO YOU NEED A CPA?

COMPLEX CCM

As pharmacists prepare to offer a chronic care management

For patients who need more than 20 minutes per month to

program, they may wonder if they need to set up a collaborative

manage their multiple chronic conditions, a related service known

practice agreement with the providers. “Our view is that for most

as complex chronic care management could be an option.

of the CCM services that pharmacists will provide, like medication management, coordinating care, or educating patients about

Complex CCM is for when the patient’s conditions are considered

things that could affect their health, a CPA is not needed,”

unstable enough that significant changes to the care plan need to

said Burns.

be made on a regular basis,” Burns explained. “It’s reimbursed at a higher level and has a larger required time commitment.”

However, it’s still a good idea for pharmacists to check in with the state board of pharmacy to make sure there are no limitations

In 2022, the CMS payment for 60 minutes of complex CCM is

that will prevent them from holding up their end of the agreement

$134.29 with a payment of $70.60 for additional 30-minute

they made with physicians.

increments. Like with regular CCM, that payment is divided between physician and pharmacy according to the terms of

Even though they generally aren’t required, a CPA could help

the contract.

a CCM program run more smoothly. “Without a CPA, if the pharmacist is seeing problems with the medication regimen, the only thing they can do is contact a physician and recommend a change,” Burns said. “With a CPA, pharmacists have more autonomy to make changes according to the terms of the CPA.”

CCM UNDER GENERAL SUPERVISION One of the things that makes CCM ideal for pharmacies is that while pharmacies must be under the supervision of a physician, the services don’t have to be delivered in the same location.

“For some services, Medicare requires direct supervision, which means the pharmacist needs to be in the physician’s office, but CCM has a type of supervision called ‘general supervision,’ which means the individual working under the physician doesn’t have to be in the same physical location,” Burns said.

Under general supervision, the physician or QHP has to be available to the pharmacist, but they can collaborate remotely. Sinclair said that operating under general supervision allows Avant Pharmacy to integrate its CCM services into their regular pharmacy services.

Burns says that operating a CCM program under general supervision could be a steppingstone to other opportunities to work collaboratively with physicians. “There are several other Medicare services like behavioral health integration that are also done under general supervision,” she said.

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