LeadingAge NY Comments on Independence of LTC Consultant Pharmacists ( )

Transcription

1 LeadingAge NY Comments on Independence of LTC Consultant Pharmacists ( ) Introduction Please accept and consider the comments of LeadingAge NY on section 5.) Independence of LTC Consultant Pharmacists ( ) of the proposed rule entitled Medicare Program; Proposed Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs for Contract Year 2013 and Other Proposed Changes; Considering Changes to the Conditions of Participation for Long Term Care Facilities ( ). LeadingAge NY (formerly NYAHSA) is the state affiliate of the national LeadingAge (formerly AAHSA). Founded in 1961, LeadingAge NY is the only statewide organization in New York representing the entire continuum of not for profit, mission driven and public continuing care, including home care, community services providers, adult day health care, nursing homes, senior housing, continuing care retirement communities, adult care facilities, assisted living, and PACE/MLTC. Our nearly 500 members serve an estimated 500,000 New Yorkers of all ages annually. General Comments In general, our comments can be broken down between our concerns with implementation of the proposed rule for all nursing homes and our concerns with the specific impact of the proposed rule on those nursing homes that do not utilize an outside vendor pharmacy and maintain their own (i.e., in house) pharmacies. Our comments are concerned with the following aspects of the rule: It creates the potential for increased administrative burden and costs and thus represents an unfunded mandate; We do not believe that the problem it is meant to correct is widespread and there are better ways to handle the potential for conflict of interest; We also believe that there are advantages to the current system that will be lost, with potential downsides for both facility operations and resident care; and There are unique circumstances for nursing homes running in house pharmacies that are not addressed in the rule, and the rule needs to make an exception for these nursing homes. We do not suggest that the vendor consulting model is better or worse than the independent consultant model; there are advantages and downsides to both. Therefore, we are not supporting one model over the other, but would support the nursing home having the discretion to determine which model works best for their needs. LeadingAge NY also believes that the negative behavior being used to justify this change is the exception and not the rule, and is not sufficiently widespread to justify the sweeping scope of this proposal. In fact, we contend that overall the

2 vendor pharmacies provide excellent service to the residents of New York nursing homes, and our impression is that these pharmacies employ the professional standards of corporate compliance and ethics necessary to avoid the conflict of interest problem cited in the proposed rule. We also strongly believe that the vast majority of individual pharmacists, both vendorbased and independent, employ the standards of professional ethics and conduct that ensure that their main interest is in the quality of care of the nursing home resident. This proposed rule, therefore, unfairly and unreasonably paints an entire industry and the individual professionals in that industry with the same broad brush, when a more precise and surgical approach is what is really needed. Another Unnecessary and Unfunded Mandate At a time when nursing homes are confronting serious current and potential funding cuts at both the state and federal levels, the proposed rule creates the potential for increased administrative burden and costs, and thus represents yet another unfunded mandate. The proposed rule acknowledges that in many cases the services of the consulting pharmacist are being provided at a certain cost advantage to the nursing home as part of the overall vendor pharmacy contract. This likely reflects the fact that a consulting pharmacist working for a large vendor has certain cost advantages and economies of scale. For example, a consultant needs to utilize certain software in order to gather data and perform analysis on the nursing homes drug utilization and benchmark that against a large sample. The vendor employed consultant is generally able to provide this level of service more cost effectively due to the large corporate infrastructure supporting his/her consulting practice. The loss of these cost advantages for the nursing home, along with the added burden of needing to independently secure the services of a consultant does indeed impose an added administrative and cost burden to the nursing home, and these costs should be recognized in terms of added reimbursement. While we understand that the appearance of a conflict of interest is driving this proposed rule, CMS needs to acknowledge that there are real advantages to current system. The ability of the pharmacy consultant to readily obtain the nursing home s drug utilization and cost profile gives the vendor employed consultant more ready access to data and analysis, and often red flags on utilization can be available on a real time basis. This has proven effective when the consulting pharmacist is working closely with the nursing home s clinical staff and quality review function. The consultant pharmacist interacts with the nursing home staff primarily through a quality assurance committee review of medications. Under current quality measures, there is a strong incentive to reduce medications. In addition, up until recently in New York, drug costs were included in the daily Medicaid rate and this created a strong financial incentive to eliminate unnecessary or duplicative polypharmacy. Within this quality review function, the consulting pharmacist is only one member of a team, reviewing the resident s care and it is highly unlikely that he/she can coerce the use of a particular drug over the judgment of the medical, nursing and other clinical staff.

3 While we acknowledge that the potential for a conflict of interest exists in the current arrangement, we do not believe that such occurrences are widespread. Nor do we believe that the scope of the problem is such that it justifies eliminating the arrangement completely. The real solution to the problem is to ensure that the vendor pharmacy has the proper corporate compliance standards in place and that an arms length relationship between the vendor and the drug manufacturer is maintained. In House Pharmacies The proposed rule also ignores the circumstances of the nursing home in house pharmacy and a special exception needs to be made for these operators. By way of background, prior to the implementation of Medicare Part D, approximately 40 nursing homes in New York maintained their own in house pharmacies. The complexities and added administrative overhead required under Part D reduced that number to less than half. For many LTC facilities the decision to maintain an in house pharmacy in the face of the added burdens created under Part D was a very difficult choice. These facilities strongly believed in the benefits of maintaining an in house pharmacy, which include: 1. Faster response times to changes in drug orders and special orders; 2. Enhanced ability to customize and adapt the drug formulary to the needs of the residents; 3. Greater quality control; 4. Better coordination between the pharmacy and other clinical services; and 5. The ability to better coordinate the resident s care and reduce hospitalizations. While many nursing homes were forced to acknowledge that they could not meet the added investment in administrative overhead needed to continue operations under Medicare Part D, those facilities that did maintain their own pharmacies did so out of a belief that they are providing an enhanced level of service and quality to their residents. The general profile of those facilities in New York able to maintain pharmacy operations under Medicare Part D is that of a non profit, mission driven, and a large, multi level provider. In many cases these operations include in house medical staff and they have an administrative and technical infrastructure on a par with most hospitals. LeadingAge NY is recommending an exception for nursing home in house pharmacies based upon the following: 1. To the extent that the application of this rule may require the nursing home with an inhouse pharmacy to incur additional administrative burden over and above what is already necessary to comply with current regulations, this proposed rule represents yet another unfunded mandate and creates yet another disincentive for providers to maintain in house pharmacies; 2. Nursing homes with in house pharmacies are not receiving the manufacturer s rebates and other incentives that create the potential conflict of interest rationale underlying the proposed rule, and therefore should be exempt;

4 3. It is redundant to apply this rule to a nursing home in house pharmacy in any case since the single entity (i.e., the nursing home) ends up administering the pharmacy and hiring the consultant, regardless; 4. Should this rule create an added disincentive for maintaining an in house pharmacy, it represents just one more step in consolidating the pharmacy services in nursing homes under a small handful of large vendors (as noted in the proposed rule 3 large vendors account for 90 percent of the market); 5. There is no evidence to indicate that these independent pharmacies are problematic either in terms of the quality of service to the residents or in terms of the negative behaviors noted in the proposed rule. To the contrary, those nursing homes that have remained committed to their in house pharmacy services did so because of their strong believe that they are providing an enhanced level of service; 6. Those nursing homes providing in house pharmacy services are already under stringent internal and external review relative to the quality of service they provide. They must meet state pharmacy licensing guidelines and employ only qualified licensed professionals. There are strong internal quality reviews along with state licensure and survey reviews. This added level of scrutiny is simply unnecessary, and penalizes providers who have actually chosen to invest more resources in quality of care. In other words, there is already ample internal and independent review of the quality of care making this added measure unnecessary; and 7. Hospitals are not required to have their in house pharmacy services reviewed by an independent consultant, and it is unfair and unjustified to treat the nursing home with some added level of suspicion. Finally, this proposed rule, if applied to in house pharmacies, runs counter to the overall goals of CMS in terms of encouraging and promoting reduced hospitalizations and greater care coordination. Combined with an in house medical staff and an institutional special needs plan, the in house pharmacy model provides the nursing home greater flexibility in being able to coordinate resident care and keep residents out of the hospital. In fact, among those providers who made the difficult decision to keep their pharmacies operating, this was their main motivation. However, you are now proposing a rule that penalizes those providers who are doing exactly what CMS is promoting with their larger overall policy objectives. The easier course of action for any of these nursing homes is to contract out pharmacy services to one of the large vendors, who without a doubt provide excellent services and relieve the facility of considerable administrative burden. Unless an exemption is applied, this proposed rule creates one more disincentive for maintaining in house pharmacies and represents another case of no good deed goes unpunished in the world of regulatory over kill. For the reasons noted here, it is clear that the nursing home in house pharmacy model is a very different animal from the vendor pharmacy model and must be exempted from the proposed rule. Conclusion Thank you for your consideration of these comments, and as always the staff at LeadingAge NY is available to assist or answer any addition questions you may have.

5 Patrick Cucinelli, MBA, LNHA, EMT Senior Director of Public Policy Solutions Tel Cell Fax