Charging for Inpatient Medication Therapy Management

July 2014 - Vol.11 No. 7 - Page #30

In today’s cost-conscious environment, where every department is expected to do more with less while providing exceptional patient care, implementing effective revenue-saving initiatives is especially vital. Thus, hospital pharmacists are continually tasked with reevaluating systems and processes to capture revenue wherever possible. Charging for medication therapy management (MTM) services is one effective strategy, but it is rare to encounter an inpatient pharmacy that bills for MTM services, as MTM is typically interpreted as only an outpatient program. However, inpatient cognitive services provided by pharmacists can be billed to insurers, and this practice has the potential for substantial financial return, generating revenue that can be used to support the organization and facilitate growth of the clinical program. Consequently, hospital pharmacists should consider the clinical and financial benefits of implementing an inpatient MTM service. 

Asante Rogue Regional Medical Center (ARRMC), located in Medford, Oregon, is a 378-bed regional referral and trauma center, part of the three-hospital Asante Health System. ARRMC specializes in heart and stroke care, orthopedic services, cancer care, and diabetes care, and offers a range of additional services, including neurology and neurosurgery, bariatric surgery, rehabilitation services, the area’s only neonatal intensive care unit, home care and hospice services, and the only hospital-based sleep center in southern Oregon. ARRMC has provided MTM services to inpatients, and billed for these services, for the past seven years.

The Medication Therapy Management Process 
Inpatient MTM is intended to optimize patient care by meeting the following objectives: 

  • Increase appropriate medication use to improve patient outcomes
  • Prevent or resolve medication review–related issues
  • Develop and implement optimal medication therapy regimens and monitoring plans
  • Monitor for adverse drug events
  • Provide education to the patient or patient’s caregiver

MTM services focus on consistently optimizing medication use, enhancing communication between patients and the health care team, and improving patient outcomes.

The process begins when the inpatient pharmacist is consulted to identify and resolve medication-related patient care issues. The pharmacist collects and analyzes all patient-specific information necessary to make appropriate evidence-based medication therapy plans. The pharmacist either addresses medication-related concerns with the physician, or makes the necessary changes to therapy and monitoring plans when protocol permits. 

Pharmacists consult a total of over 500 times a month between our 378-bed community, not-for-profit hospital and 125-bed sister hospital. Some common MTM consultations include: 

  • Antimicrobial stewardship: 72-hour time-out (ie, a pause at 72 hours to review the indication and expected duration of antimicrobial therapy, designed as a time to make appropriate adjustment to, or discontinuation of, treatment based on the available clinical data), redundant combination, drug-bug mismatch
  • IV to PO conversion
  • Kinetic dosing (eg, vancomycin, aminoglycosides)
  • Renal dosing
  • Total parenteral nutrition monitoring and adjustment
  • Anticoagulation monitoring and adjustment
  • Patient discharge education
  • Other services requested by medical staff

A typical consult for MTM service is generated either by a new physician order or per protocol. For example, an order for warfarin generates an MTM consult based on the pre-established protocol, allowing pharmacists to dose and monitor all warfarin in the hospital. Upon receipt of the order, the pharmacist reviews the patient’s medical record and conducts an assessment. The pharmacist visits the patient briefly to discuss the care plan, including any changes to therapy or monitoring. The visit and the plan of care are then documented in the medical record. 

MTM documentation involves creating an ongoing, patient-specific, chronologically ordered record that describes all care provided in an established, standard format. This documentation facilitates communication between the pharmacist and other health care providers, improves patient outcomes, enhances continuity of care, ensures compliance with laws and regulations related to maintenance of patient records and provision of MTM services, protects against professional liability, and captures services provided for billing or reimbursement.

Developing and Implementing the Program
At ARRMC, pharmacists have been offering MTM services to inpatients since 2007. The initial impetus for the program was pharmacy’s desire to demonstrate its growing value to the institution; thus, the MTM program was developed and implemented. An inpatient MTM program can be set up in four steps:

1. Review state laws to determine the necessary criteria for MTM in your state. For example, the Oregon State Board of Pharmacy requires that the documentation notes for the consultation be captured in the Subjective, Objective, Assessment, Plan—or SOAP—format (see TABLE 1). Each consultation must include a patient visit, documentation of that visit, and a plan of care in the medical record. After conducting the visit, the pharmacist documents the MTM services by writing a SOAP note. Because pharmacists initially felt some hesitation about visiting patients and writing SOAP notes, pharmacy provided education on the formatting and content of these notes, as well as some helpful suggestions for how to conduct patient visits utilizing Studer’s AIDET framework1:

  • Acknowledge – Greet patients with a smile and use their names
  • Introduce – Introduce yourself and tell them why you are there
  • Duration – Let them know how much of their time you need
  • Explanation – Explain to them the service you are providing (eg, to review anti-infective dosing)
  • Thank You – Thank them for their time and ask if there is anything else you can do for them 

2. Establish billing values with the finance department (The Evaluation and Management [E/M] CPT codes work well—see TABLE 2). Inpatient MTM E/M codes range from level 1 to level 5 (see FIGURE 1) with each level of service covering a different activity based on the complexity of the MTM service, not the time required to complete it. A level 1 MTM is the least complex form, requiring little or no follow-up and no change in therapeutic plan. A typical level 1 intervention would be a review of medications to assess fall risk with no changes to therapy. In contrast, a level 4 MTM would be of higher complexity and may require an in-depth assessment, as well as changes to medications and monitoring plans (eg, a new start parenteral nutrition consult, anticoagulation consult, or new start kinetics).

Click here to view a larger version of this Figure

3. Hospital pharmacists must conduct patient visits, which are required for billing, and document those visits according to state and federal requirements. It is prudent for pharmacists to document their visits by starting and ending their progress notes with statements that confirm face-to-face contact. Examples include I visited with the patient and The patient understood the plan of care. In cases when critically ill patients are intubated and sedated and, therefore, unable to communicate, this must be documented in place of the patient visit (eg, I visited the patient and found he was unable to communicate due to intubation and sedation).

4. Establish a reporting system to collect all pharmacists’ MTM progress notes. Your biller should be trained to review each progress note, code it for the level of service provided, and then submit it for payment. A daily report is generated based on key fields in the electronic medical record, specifically progress note and pharmacist author. The biller then pulls each pharmacist progress note and scans the title, which must specify whether the services were ordered by a physician or are being conducted under protocol (eg, vancomycin dosing per protocol). The biller then scans the first few lines of the note to ensure that the pharmacist visited with the patient. 

Once these criteria are met, the biller reviews the note in more detail to determine the level of service on a scale of 1 to 5. Currently, our billers document their MTM reviews, including patient name, pharmacist name, date of service, MTM level, MTM charge, MTM type, and payers billed, on a spreadsheet. Managers periodically audit the billers’ records to assess patterns, provide pharmacists feedback on the quality of their MTM services, and discuss reasons why charging could not occur (eg, failure to document the patient visit).

The Billing Process
All MTM services are billed by the finance department at ARRMC. Due to the Diagnosis-Related Group (DRG) system and lack of provider status, Medicaid and Medicare do not reimburse for inpatient pharmacy cognitive services. MTM services, however, are provided to all patients regardless of reimbursement status. Insurers reimburse for E/M-coded services provided to inpatients. To project the financial return, use the relationship between insurance predominance and negotiated rates. For example, for an average hospital with 35% insurance paid care and 80% negotiated rates, the return would be ~28% of charges billed. 

A cost-benefit analysis was undertaken to determine appropriate billing values for each level of MTM service. Pharmacists’ time was valued at $1.33 per minute based on the productive time calculation (see TABLE 3). Pharmacists’ time spent on patient care activities related to MTM is the primary cost driver in the cost-benefit analysis (see TABLE 4). The activities include clinical assessment, patient visit, ordering, and documentation. The cost of billing is additionally included at $2 per bill for an estimated cost of the biller’s time. The example shows that it costs approximately $35.25 to provide level 1 MTM services. Billing discussions should start from this premise at each individual organization. 

There are several billing codes that can apply to MTM services. Code 99487 covers complex chronic care coordination (CCCC) without a patient visit. Code 99488 is the same except it includes a one-hour patient visit per month. In the inpatient setting, pharmacists see patients for MTM services almost daily. The new CCCC and transitional care management services (TCMS) codes (99487, 99488) do not work for inpatient MTM. However, the CPT codes 99605-99607 can be used for either inpatient or outpatient services. These codes determine billing values based on whether or not the patient is established and duration of visit. They may be used for inpatient use if an organization decides to do so, but they are not recognized or reimbursed by Medicare. 

Our organization chose to use codes 99211-99215 because they identify the pharmacist as a care provider, while codes 99605-99607 do not. Codes 99211-99215 can be used for inpatient or outpatient services. Billing is based on complexity instead of time. Neither set of codes is covered by Medicare.

Staffing and Buy-In
Although the patient visit and documentation requirements associated with MTM services add a few minutes to each episode of care, MTM services have not impacted staffing levels at ARRMC. We are cognizant, however, that the growing visibility of pharmacy services may increase demand and result in petitions for more FTEs to help with the added consults. 

Implementation of the program added patient visits and documentation requirements to pharmacists’ responsibilities; thus, some pharmacists were hesitant to welcome additional tasks into their already busy schedules. To alleviate this, the program was rolled out in stages, covering a few clinical services at a time. Key to the success of the program was providing pharmacists with training on how to conduct short, yet effective, patient visits. Moreover, maximizing technology to streamline documentation processes (eg, progress note templates and open intervention reports) can assist in facilitating adoption.

Pharmacists completed 5,020 MTM consults in 2012, and the service is growing every year. Currently, over $2,000,000 per year is billed as net patient service revenue for MTM services. In addition, the MTM program will soon be implemented in a 49-bed hospital newly added to our health system. The goal is to implement during the fall of 2014, directly following the hospital’s adoption of an electronic medical record. MTM billing values continue to be routinely adjusted for inflation to ensure that the costs of providing the services are covered. 

As members of the interdisciplinary team, pharmacists are in a key position to identify and resolve medication-related patient care issues. Inpatient MTM improves patient outcomes by enhancing appropriate medication use. Pharmacists from hospitals across the nation continue to consult with us regarding procedures for implementing inpatient MTM services. It is anticipated that billing for MTM for inpatients will increase in popularity moving forward.


  1. The Studer Group Web site. AIDET: Five Fundamentals of Service. May 28, 2014.


Deborah Sanchez, RPh, PharmD, BCPS, is the pharmacy practice and residency director at Asante Rogue Regional Medical Center (ARRMC) in Medford, Oregon. She received her Doctorate of Pharmacy from the University of Wyoming, and is currently working towards a Masters in Healthcare Administration from Simmons College. Deborah’s interests include clinical strategy, change management, medication therapy management, scope of practice advancement, and privileging and credentialing. 

Jeffrey Feyerharm, RPh, is the pharmacy manager at ARRMC. He worked as a staff pharmacist for 12 years and has been the manager for 22 years. Jeffrey’s interests include performance improvement, group dynamics, and utilizing both pharmacists and pharmacy technicians at the top of their license.

James Krick, PharmD, has been a pharmacist at ARRMC for 21 years and served as the pharmacy information specialist for 9 years. He received his Doctor of Pharmacy degree from the University of California at San Francisco and completed a fellowship in pediatrics at Children’s Hospital in Los Angeles. 


Sonja Nisson, RPh, PharmD, has been an independent consultant specializing in hospital systems and patient safety since 2008. From 1997 to 2008, she was the regional manager, pharmacy and diabetes, at the Asante Health System. Sonja was a Joint Commission surveyor from 1991 to 2006 and is on the faculty of Pacific University. 


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