Is fee for service dead?

December 10, 2014

Now that pharmacists are being recognized as full members of the healthcare team, we don't have to worry about payment any more, right? Not quite.

Healthcare is evolving into an interdisciplinary approach that enables teammates with different training and different expertise in evaluating and treating patients to combine to produce the best medical outcomes. Institutions are using transitions-of-care billing codes, and more settings are moving toward a form of payment based on diagnosis-related groups (DRG), under which costs are associated with the care of a patient with a particular diagnosis, cared for by an interdisciplinary team.

So fee for service (FFS) is dead! Pharmacists are part of the team. We don’t have to worry about billing for pharmacist services in this new utopian world. We don’t have to worry about that messy thing called money, right?

Not so fast. Let’s look a little closer.

Where will the money come from?

How will the team pharmacist be paid? Current Procedural Terminology (CPT) codes for DRG and non-MTM services are directed toward payment of federally recognized providers and for current overhead costs incurred by the “team” that currently receives federal recognized recognition. The pharmacist is not officially on this team.

Many commercial carriers follow CMS guidelines for group-care payment, and the pharmacist salary isn’t accounted for there, either. Because pharmacists aren’t included in the payment calculation and are viewed as nonproviders, the bucket of DRG money has to be split further. In a financial sense, pharmacists either become administrative overhead; take away from the fixed payment already determined without their participation; or, in an inpatient setting, are supported by the doses of meds dispensed in the central pharmacy.


Revenue creation

As pharmacists, we have no ability to bring money in. This puts us at the disadvantage of having to justify our existence with the more nebulous, less understandable “cost avoidance” argument: We will decrease costs just by being there (to the tune of a six-figure salary). Easy argument, right? Proven in the literature, right? In the eyes of those paying that salary, not necessarily.

In the outpatient setting, if you can obtain a contract with a self-insured entity, you can use the Asheville Project to make the cost-avoidance argument. But it’s not so easy to get those contracts.

In nongovernmental ambulatory care and community pharmacy, we still have to fall back on revenue creation, and for now, CPT codes for low-level CPT, Medicare Part D plan, and MTM will have to do. But the lowest “incident to” CPT code doesn’t cover the cost of pharmacist services; the Part D plans and other forms of payment structured for pharmacy benefit managers (PBMs) are inadequate; and many payers still do not recognize MTM CPT codes monetarily if the services are performed by a pharmacist.

By the way, much of community pharmacy payment for MTM services is also based on cost avoidance. The problem there is that someone other than the pharmacist is getting most of those saved dollars.


Only one way

It gets worse. The team scenario mainly pertains to large teaching, academic, or government facilities that might have extra funds to support an extra administrative healthcare cost on the team. But most patients who would benefit from pharmacists services are located somewhere else: in the community; in a small community hospital; in a long-term-care facility; or even in the aforementioned team-utilization facilities, but on other medical services.

Pharmacist services have to be paid for. The easiest and only direct way to financially account for them to administrative and managerial decision-makers is through revenue streams - for which, read FFS. It is the only way for us to bridge the gap between the current world of paying for services and the coming world of team-based care. To get there from here may take years. In the meantime, provider substitutes for pharmacists will be used, such as PAs, ARNPs, and others such as RNs who ARE federally recognized providers.

Will pharmacist provider status be a cure-all for pharmacist payment problems? It depends. It depends on whether future CPT and other billing codes include the extra pharmacist provider. It depends on how well pharmacists will be able to use existing and future codes to cover their costs to the system.

We must keep in mind that we are grossly outnumbered by practitioners in the medical and nursing professions, and the political war chests of other professional organizations are highly funded; we will have to be more professionally and politically active to achieve our professional goals. We have to concern ourselves not only with provider status but with how we can earn our place at the table now.

Is fee for service dead? If you think about it in the macro sense, not on your professional life.

Michael Schuh is a clinical MTM pharmacist in Jacksonville, Fla. Contact him at