One of the Affordable Care Act’s most far-reaching legacies is the ever-increasing impact that Value-Based Care has had on healthcare systems and physicians. In hospitals it’s seen primarily in the form of Per Diems and Readmission Adjustments. For physicians it’s reflected in MIPS (Merit-Based Incentive Payment) scores.

What are value-based care programs?

According to the Centers for Medicare & Medicaid Services, “Value-based programs reward health care providers with incentive payments for the quality of care they give to people with Medicare.” Value-based programs, CMS states, support its 3-part aim: 1) Better care for individuals. 2) Better health for populations. 3) Lower costs.

What’s not mentioned on the CMS page is that health care providers can be penalized for delivering what it considers less-than-optimal care and a bad patient experience. And one of the most commonly-used criteria Medicare and Private Payers use, in determining the level of payments health systems and physicians receive for their services, is the rate of Patient Readmissions. That’s where well-run outpatient pharmacy models can have a profoundly positive impact on patient care and health care provider revenues.

The impact of Medicare patient readmissions on health systems

Medicare closely monitors health care providers’ readmission rates. If it determines a given health care system has too many readmissions, it can reduce all of that system’s payments by up to 3%. Think about that number in terms of profitability. If your health system operates at a net margin of 9%, that’s a 1/3 reduction of your profits on Medicare patient services.

By the same token, physicians who feel they’ve been unfairly dinged on their MIPS scores, because of patient readmissions, may consider moving their practices to other health systems. At the very least, physicians who feel they’ve been unfairly dinged are not happy doctors.

Private payer responses to readmissions

Private payers may penalize health systems for readmissions through reduced payments for whatever services and medications are rendered and dispensed to readmitted patients. At the same time, an increasingly common practice among private payers is to establish annual budgets for health systems. Budgets they base on past years’ numbers of total patients served, and per-patient revenues — and above which they’ll pay nothing to the health system, if its billing during a given year exceeds the “budget” they’ve been given on this payment model.

How can an outpatient pharmacy reduce hospital readmissions?

Statistical evidence indicates that up to 70% of all preventable readmissions are due to patient prescription non-compliance. What’s more, based on the analytics generated by ProxsysRx’s proprietary software, readmissions from prescription non-compliance are often significantly more expensive to health care providers than other readmissions.

Leading causes of medication non-compliance

PREMATURE CESSATION. Way too often, patients stop taking their medication once they begin to feel better.

MEDICATION COSTS. It’s no secret that, for many patients (particularly Medicare & Medicaid patients) the prohibitive costs of their prescription drugs are beyond their ability to pay. Individuals on limited incomes are often left with depressing dilemmas — the most common one being “prescription drugs or food?”

CONFUSION / LACK OF INFORMATION. It’s not at all uncommon for patients to be unsure about their medication protocols. Particularly if they’re discharged from a hospital lacking a well-managed Meds To Beds program and a less than ideal patient experience.

Two classic cases of Preventable Readmission

ONE: A patient is discharged from your health system after his knee operation, and is prescribed antibiotics and pain meds. Unfortunately, the pain lasts longer than the original prescription, but instead of asking his physician for a refill, he goes to your emergency room — and very likely with a bad attitude toward his surgeon and your hospital.

TWO: A patient you treated for pneumonia is discharged without receiving clear and thorough instructions on following her prescription medication protocol. Days later, she feels fully recovered, and abandons her medication. It goes without saying, treating pneumonia is very expensive. At the same time, patients very often begin to feel better long before they’ve finished their prescriptions.

In both cases, you have not only a preventable readmission for which your health system will be paid less (or, possibly, nothing) — but also the risk of a disgruntled patient filing suit against you for a poorly perceived patient experience.

Critical pharmacy services your hospital should offer all patients

MEDS TO BEDS. Bedside prescription delivery is arguably the single most effective method for ensuring that patient prescriptions are captured before they leave your care. ProxsysRx has implemented Meds To Beds programs for dozens of health systems over the years, and the minimum reduction we’ve achieved in medication-related readmissions is 20%.

For one Mississippi health system, ProxsysRx filled over 18,000 discharge prescriptions in our first 12 months of service — during which time, pharmacy revenues increased 125% and readmissions decreased 79% with our Meds To Beds program.

A well-run Meds To Beds program involves discharge prescription delivery by a pharmacist, or a highly-trained employee capable of thoroughly discussing the patient’s prescription protocol — as well as the patient’s existing medications (to prevent medication conflicts or contraindications). For more tips on maintaining an effective Meds To Beds program, Click Here.

PATIENT FOLLOW-UP. Meds To Beds should be supplemented by a Meds To Home program, starting with ongoing contact with discharged patients, to ensure they’re following their prescription protocols — and to answer any questions they may have since their discharge. The program should also be set-up to connect patients with doctors or pharmacists, whenever necessary. This alone will dramatically increase positive patient outcomes.

DISCOUNTED (OR NO CHARGE) PRESCRIPTIONS. As mentioned above, cost is often a key reason why many patients don’t maintain prescription compliance. And yes, providing at-need patients with below-cost or no-cost prescriptions is an expensive proposition, but in reality it’s a fraction of the costs your health system can incur from readmissions — not to mention the potential penalties that come with them.

MEDICATION ACCESS. Cost isn’t the only “affordability” factor preventing patients from maintaining medication compliance. Lack of adequate transportation options and/or nearby pharmacies can also be a problem. Which is why your outpatient pharmacy should also offer home prescription delivery.

What about value-based pharmacy care?

Most well-run, well-financed, fully-staffed outpatient pharmacies have the resources to participate in Value-Based Pharmacy Care initiatives — in which the pharmacy shares the benefits, and the risks, of such a program.

The reason so few actually participate is that they lack the full control needed to ensure the success of a Value-Based Pharmacy Care program.

How Can ProxsysRx Help Your Hospital Achieve Its Value-Based Care Objectives?

For more information, contact Howard Hall. C: 214.808.2700 |