Value-Based Payment Models: Can Pharmacies Find Opportunity in CMS’s MIPS and APMs?

Mar 8, 2018CMS Star Rating, Independent Pharmacy Insights, Pharmacy Growth, Pharmacy Insights, Value Based Payments

The healthcare landscape in the United States is rapidly evolving. In 2016, the Centers for Medicare and Medicaid Services (CMS) released its Final Rule of Medicare Access and Children’s Health Insurance Program (CHIP) Reauthorization Act (MACRA).  This outcomes-based reimbursement legislation created a large shift in how healthcare providers are reimbursed, switching from a volume-based payment system to a value-based payment system. The new Quality Payment Program (QPP) introduced two value-based models: Merit Based Incentive Payment Systems (MIPS) and Advanced Alternative Payment Models (APMs) (1).

While these payment systems will challenge healthcare providers to improve quality, there is also a unique opportunity for pharmacies to work with providers to improve patient outcomes –– which will grow their organizations and strengthen their positions as both healthcare providers and relevant community resources.

What are MIPS and APMs?

MIPS is a CMS program that measures a provider’s performance in four areas:

  • Quality
  • Cost/Resource use
  • Improvement activities
  • Advancing care information

MIPS is open to clinicians billing more than $30,000 a year in Medicare Part B and who see more than 100 Part B patients a year. (2)

A provider’s MIPS (weighted) performance score determines their compensation for the future Medicare beneficiaries they treat.  Starting in 2019, payments for these beneficiaries will be adjusted up, or down, by up to 4 percent based on performance during 2017. By 2022 that percentage will increase to up to a 9 percent payment adjustment.

APMs is a value-based payment approach that rewards quality and value. It is subject to additional requirements, above and beyond MIPS.

Qualifying APMs participants must have 20 percent of their patients or 25 percent of their payments go through an alternative payment model to be excluded from MIPS requirements. These eligible physicians and clinicians would then receive a 5 percent lump sum bonus beginning in 2019 but must also share in the potential for financial risk associated with not meeting the requirements of the APMs program. It’s important to note that, in 2019, a practice must see 35 percent of patients through alternative payment models, compared to the current 20 percent. (2)

It is due to these additional requirements, and the risk involved, that most providers will opt into MIPS. And it is within MIPS that pharmacies may find more opportunity to work with providers.

What are the Opportunities Open to Pharmacies Through MIPS?

Pharmacists who are familiar with value-based payment models can implement enhanced services and tailor them to help providers meet, or exceed, quality benchmarks. When pharmacies can demonstrate to providers how their scope of enhanced services can positively impact a patient’s therapeutic outcomes — and their subsequent reimbursements —they will win additional referrals. This approach can also help pharmacies qualify for future opportunities to supply additional services.

Some ideas that can help pharmacies improve their services include:

  • Ensure patients with prescriptions for opioids are documented in the Prescription Drug Monitoring Program (PDMP)
  • Consult the PDMP before filling and inform prescribers of any inconsistencies
  • Have employees obtain mental health first aid certification.
  • Use evidence-based screening to identify patients at risk and in need or services
  • Conduct regular reviews for at-risk, unstable patients, or those not responding to treatment
  • Utilize rapid diagnostic testing to diagnose influenza and streptococcus in the pharmacy under a collaborative practice agreement (CPA)
  • Individualize care plans and proactively educate patients
  • Enroll patients in medication synchronization programs
  • Screen for comorbid conditions
  • Update pharmacy technology

Closing Thoughts

Pharmacists are on the front line of helping to improve patient outcomes. It is through an active participation in patient care, and by opening a dialogue with customers, that pharmacists can play an enormous role in facilitating a patient’s access to care and decreasing the chances of hospitalization and/or readmissions, which can effectively raise the overall cost of healthcare across the board.

Value-based payment models are here to stay. If today’s pharmacies want to make a positive impact in their patient’s quality of care, in addition to their bottom line, they should audit their strengths and identify the opportunities open to their organizations. By acquiring a strong grasp of the ideology behind these new Quality Payment Programs, pharmacies will find myriad opportunities just waiting to be implemented.

Do you have any thoughts on the new value-based payment models? How do you think this change in how payments are disbursed might affect your pharmacy? We’d love to know and may even share those experiences in future blog posts, white papers, and e-books. If you’d like to add your experience, please contact

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