Skip to main content Back to Top


Hospital Earns Financial Rewards for Inpatient MTM Services

Kate Traynor

An Oregon hospital may have cracked the code for private-payer reimbursement of inpatient medication therapy management (MTM) services provided by pharmacists.

Deborah Sanchez, director of pharmacy practice and residency at 380-bed Asante Rogue Regional Medical Center in Medford, said the hospital last year billed private and public insurers for about 5000 MTM encounters.

None of the expenses were reimbursed by Medicare or Medicaid. But Sanchez estimates that the MTM services continue to bring in about $50,000 per month from one private insurer with whom the hospital has negotiated rates for the services.

"It's money. It's not nothing," Sanchez said. "You bill a lot more than you receive, but the hospital bills a lot more than it receives overall, as well."

Sanchez said the hospital first examined the possibility of billing for inpatient MTM services about five or six years ago. She said the pharmacy and finance directors "discussed the services we were providing and if there was an opportunity to do billing for them."

Ultimately, she said, "the facility determined that the types of services that we provide in the hospital as pharmacists" fall under evaluation and management (EM) inpatient procedural codes.

EM codes capture three key elements of patient care encounters—patient history-taking, physical examination, and medical decision-making—and categorize the services on the basis of complexity.

Sanchez said her hospital uses the SOAP (subjective data, objective data, assessment, plan) documentation style to meet state requirements for documenting pharmacists' MTM services.

Oregon state law permits pharmacists to provide MTM services and to establish collaborative practice agreements with physicians. Both of these activities require adequate documentation of the pharmacist's encounter with the patient, and Sanchez said the SOAP process satisfies the state's requirements.

She said some of the hospital's pharmacists weren't familiar with SOAP charting and "needed a little bit of training" in the method and how to work it into their daily practice.

"They were already doing [patient] education, so it wasn't a huge deal" to document what they were doing, Sanchez said.

Sanchez said the hospital established five billing levels for MTM services. Because the services are provided to inpatients, all encounters are face-to-face.

At the low-complexity end of the spectrum are level 1 MTM services such as simple fall consultations, medication reviews, and medication reconciliation for patients who require little or no follow-up and no change to the medication regimen.

Level 2 services are brief but more complex than level 1 services and are problem focused. Examples may include a fall consultation that results in a medication change, a renal function evaluation with no change to therapy, the ordering of laboratory tests, or a switch between oral and i.v. therapy.

Sanchez said pharmacokinetic or renal function monitoring with subsequent dosage adjustments may represent moderate-complexity (i.e., level 3) services, and initiating warfarin therapy or evaluating a drug-induced disease may be considered level 4 services by the hospital.

Level 5 services require a complete physical exam and involve extremely complex medical decision-making in patients who are critically ill. Examples may include services for intensive care unit patients with multiple medication problems or services focused on the prevention of serious adverse drug events.

"It's broken down by category, by complexity," Sanchez said. "These all go through the biller, and the biller codes them. And they do the same thing for other nonphysician provider practitioners."

She said hospital administrators have emphasized the importance of submitting bills for services even when there is no expectation of reimbursement, because the data help establish the value of pharmacists' clinical work. And billing the Medicare program ensures that the agency has this data available when it sets payment rates.

Sanchez said other pharmacists have contacted her about billing for inpatient MTM services, but she doesn't know if other hospitals have implemented a process like that used at her facility.

She said the success depends on the willingness of insurers to reimburse for inpatient MTM services and the existence of a billing system that allows the codes to be processed for payment. She speculated that "flat-rate" or bundled-payment systems may not permit the type of billing that her hospital has successfully used.

Sanchez said allowing pharmacists to provide billable MTM services has had a "community impact or cultural impact" at the hospital by promoting and codifying pharmacists' routine interactions with patients at the bedside.

"When you . . . become that practitioner who is face-to-face and interacting with the patients and caring for them, you change the dynamics of your role, becoming much more visible," she said. "We've gotten some phone feedback and some letters, and [patients] really appreciate some of the care they've gotten."

She said pharmacy students who come to the nonprofit community hospital during experiential rotations are enthusiastic about using the SOAP documentation format.

"In this kind of setting—which is the majority of [U.S.] hospitals anyway—a lot of times the pharmacists aren't actually seeing the patients very much. So when [students] come to us, they realize that here they get to go and see the patients," Sanchez said. "They feel like they are doing patient care. I hear a lot about that."

Join / Renew

Join ASHP or renew your membership to take advantage of our benefits, services and resources
View Benefits
Link the whole card

Link the whole card