PLAN OF ACTION FOR DEALING WITH PHARMACY REIMBURSEMENT MATTERS (Discontinued)

To pursue the following plan of action to deal with pharmacy reimbursement:

1. To educate members on the systems and mechanisms of reimbursement through such activities as:

a.   Sponsorship of a focused Institute on reimbursement.
b.   Development of a series of articles in AJHP focusing on existing major reimbursement models, using a case-study approach.
c.   Development of a glossary of key term definitions to ensure common understanding.
d.   Development of a manual of reimbursement for pharmaceutical services.
e.   Development of a checklist of information and documents that will assist pharmacist-administrators in understanding how pharmacy fits into the institutional fiscal structure of their own institutions.
f.   Focus of attention on reimbursement issues at all ASHP continuing education programs through a call for papers or other appropriate mechanisms.

2. To enhance understanding of pharmacy concerns relative to reimbursement among administrators, financial managers, fiscal intermediaries, and third parties through such activities as:

a.   Expansion of liaison activities with related organizations, including the Hospital Financial Management Association and Blue Cross/Blue Shield.
b.   Development of an article or series of articles in publications aimed at these audiences.

3. To initiate data gathering to establish an effective ASHP clearinghouse for reimbursement information through such activities as:

a.   Development of a geographical profile of current reimbursement mechanisms by region and state.
b.   Survey of institutions to determine those discrete pharmaceutical services currently being reimbursed separately for both inpatient and ambulatory care.
c.   Collection of qualitative and quantitative justification documentation successfully used in achieving reimbursement.

4. To continue to review and assess appropriate legislative and regulatory alternatives related to payment for pharmaceutical services.

5. To foster research in the area of cost justification of pharmaceutical services through solicited papers for continuing education programs, targeted research grants through the ASHP Research and Education Foundation, and other appropriate mechanisms.

Note: The Council and Board view this recommendation as a long-range, three- to five-year- plan of action, some elements of which will be addressed immediately.

Rationale

This policy position was developed before preparation of a policy rationale became routine, so no rationale is available.

Background

The Council discussed the Final Report of the Task Force on Payment for Pharmacy Services and background materials defining existing systems and reimbursement mechanisms. The Council agreed on the following points as a basis to develop a plan of action to deal with the issue of payment for pharmaceutical services.

1. An important need exists to educate pharmacist-administrators and other practitioners on existing reimbursement systems and mechanisms. Similarly, pharmacists must assume responsibility to better inform others, including administrators and fiscal officers within their institutions, of pharmacy's needs and concerns.
2. Problems of reimbursement are hospital-specific and frequently are internal within the institution rather than external with third parties. No global solutions are available. As such, the successes of pharmacy as a whole will depend on individual successes within individual institutions.
3. Quantification and justification will continue in importance if we are to successfully achieve goals in the area of reimbursement. 
4. Substantial effort will be required to draw the distinction between the pharmacy product and service in the understanding of administrators, financial managers, third parties, and consumers of health care.
5. Assuming that primary problems are internal to the institution, pharmacy inust maintain a less reactive posture, and pharmacist administrators must begin to plan more proactively for the fiscal future.

The Council requested ASHP's outside counsel on reimbursement matters, Frank Samuel, Esq., of Shapiro, Dickstein & Morin, to expand on his earlier comments before the ASHP House of Delegates regarding fee-for-service. Fee-for-service reimbursement, defined as payment for professional services rendered made directly to the provider (in this case, the pharmacist), involves a "political" judgment on two levels. On the level of budgetary control, there is concern that fee-for-service offers a mechanism to maximize income to the individual provider, with a fear that such a mechanism drastically increases the flow of dollars in the reimbursement system. On the level of logistic and administrative control, there exists concern with further complicating the system and setting precedents that might ultimately affect many categories of health-care providers. The Council discussed the perceived professional objective of increased autonomy through fee-for-service reimbursement. Mr. Samuel cautioned that fee-for-service is not the "wave of the future"; rather, the reimbursement community is attempting to reduce the autonomy of all providers. Cited were pressures for procompetition initiatives, one objective of which would be to force providers to enter into agreement to decrease autonomy.

The Council also discussed advantages and disadvantages of separating pharmaceutical-service charges from product-related charges. Because cost benefits of service are a critical element of this decision, successful separation of the service component tends to recognize and legitimize its existence. Further, under competition, the product segment might be increasingly "squeezed"; hence, separation might offer more long-range flexibility. However, separation may also make these services an easy target for future exclusions. Other disadvantages include complicating the system and current lack of justification documentation. Further discussion focused on unique concerns related to reimbursement for pharmaceutical services for ambulatory patients.

Based on its discussion, the Council believes ASHP's long-range plan to deal with reimbursement issues should focus on data gathering, educational efforts, liaison activities, and legislative/regulatory activities and, where feasible, should be coordinated with affiliated state chapter activities. The Council reviewed plans for a Reimbursement Institute as part of the August 1982 ASHP National Institute.