Under Medicare, hospices are wholly responsible for obtaining and delivering the medications they prescribe for their patients. While some hospices contract directly with one or more pharmacies, most partner with hospice-focused pharmacy benefit managers (PBM) to simplify medication management. As the leading hospice PBM, Enclara Pharmacia provides custom solutions based on two primary models: per diem (PD) and fee-for-service (FFS). Each has unique benefits depending on individual hospice needs.
The PD model is essentially an all-inclusive model with some optional add-ons. It provides a predictable daily cost per patient through a standard formulary. New prescriptions can be filled at any in-network pharmacy while refills are delivered directly to patients via Enclara’s mail order fulfillment program. In both cases, supply limits and other utilization management policies help keep pricing in line from year to year.
While Enclara pioneered the mail order PD model, its FFS “pay-as-you-go” service model has become increasingly popular over the years. FFS provides greater flexibility: Formulary, quantities, refill thresholds and use of Enclara’s mail order program are all at the hospice’s discretion. The hospice pays a negotiated rate for each dispensed medication from any of the over 65,000 in-network pharmacies. Per-patent medication costs can fluctuate based on patient needs and prescribing patterns. However, many hospices are able to realize significant savings by combining FFS and strategic utilization management.
Enclara provides a variety of tools and guidance to help hospices using the FFS model keep costs in line while providing the best possible patient care. Utilization management depends on both clinical judgment and an understanding of all the factors that contribute to overall medication spending.
Deprescribing is Central to Quality End-of-Life Care
The number one strategy for reducing all these costs is deprescribing: stopping medications which are no longer helping patients and may even be causing discomfort. These are typically maintenance medications meant to prevent or slow the progression of chronic conditions. Drugs to manage cholesterol, hypertension and dementia are top targets for deprescribing due to unpleasant side effects and limited benefits in end-of-life care.
Secondary to deprescribing is conversion from higher cost medications to ones that are less expensive and, often, better tolerated. For example, inhalers are expensive and difficult for many patients to use properly, while nebulized versions of the same drugs are cheaper and easier to administer. Both deprescribing and conversions reduce the number of prescriptions the hospice must pay for and manage. They are essential but not sufficient. The next step in utilization management requires looking at the full cost of prescriptions.
Strategic Dispensing Helps Manage Hospice Pharmacy Costs
Several factors go into the cost a hospice pays for medication in Enclara’s fee-for-service pharmacy model. It is natural to focus on the price of the drug at the quantity ordered, but that can be misleading. Each prescription has static costs in addition to the variable cost of the medication itself. These include a standard PBM administrative fee and a dispensing fee which can vary by pharmacy. Other costs, known as ancillary charges, may apply for local delivery, rush orders and special packaging.
For many of the inexpensive generic medications common in hospice, the cost to dispense and deliver a prescription can easily outweigh the price of the drug itself. Knowing this, hospice clinicians can make more informed choices around quantity.
Proactive Prescribing Reduces STAT Charges
As any hospice clinician knows, patient symptoms and functional status can change from hour to hour. When they do, new medications are needed right away. That is why rush (also known as STAT) dispensing and delivery charges can be a top concern for hospices. One way to reduce STAT orders is to prescribe some drugs for as-needed use, even before they are strictly necessary. This is the idea behind comfort kits – a collection of a few doses of several common hospice medications to have on hand for rapidly emerging symptoms. Many pharmacies offer comfort kits at lower cost than obtaining all the drugs separately. The Enclara mail order ComfortPakTM can cost less than what many local pharmacies charge for a single STAT delivery. The contents include suppositories and liquid medications for patients who can no longer swallow, which is another best practice to reduce STAT utilization that may be extended to other patient medications.
Important Metrics in Hospice Pharmacy Utilization
In the Enclara FFS model, all local pharmacy charges are billed through Enclara, providing full visibility to the individual drivers of hospice medication spend. Enclara’s proprietary EnclarityTM reporting tool provides dashboards for a variety of metrics to help hospices optimize their utilization. Enclara’s clinical pharmacist managers and account managers work with clients to interpret this data. They also benchmark hospice data with statistics from similar hospices with higher or lower per patient drug spending. Among the most closely tracked metrics is Rx/ADC, the daily average number of active prescriptions per patient. This obviously impacts hospice costs but it’s also a quality measure. A high Rx/ADC can mean patients are at higher risk of drug interactions associated with polypharmacy.
More Ideas for Hospice Pharmacy Optimization
There are many ways to improve care while lowering medication costs, but not all of them will work for every hospice. It’s important for hospices to focus their efforts on the strategies that best fit the needs of their patients. Enclara regularly publishes articles and whitepapers that can help hospices formulate their own strategies. Here are a few: