Over the last decade, outpatient infusion areas have experienced tremendous growth, not only in the number of infusions but also in the available therapies provided. While physician practices realized high financial margins from infusion therapies administered in the office setting in the 1990s, changes in Medicare reimbursement, along with ever-increasing therapy costs, have altered the way practices operate. Many physician practices have joined health systems and have transitioned their patients to the hospital setting for infusion care, while many independent practices have transitioned their patients as well, simply due to the costs and shrinking margins associated with providing infusion services.
Although this influx of infusion business had significant potential to bolster the bottom line for hospitals, such a strategy was not typically driven by hospital leadership. In most hospitals, the launch and growth of outpatient infusion happened organically, without the benefit of the resource and infrastructure support afforded a new service line, which often resulted in a lack of oversight. This improper oversight can leave many hospitals poorly positioned to lead a fee-for-service site of care that manages chronic disease and keeps patients healthy and out of the hospital.
Moreover, the high cost of infusion and injection therapies administered in the outpatient infusion setting has heightened the interest of finance departments in the past few years—and since that high cost lies with pharmacy, finance often looks to pharmacy leaders for answers. Thus, it is imperative that pharmacy leaders immerse themselves in the infusion business and by doing so it will quickly become apparent how critical pharmacy’s oversight is to a successful outpatient infusion operation.
Novant Health’s Approach to Infusion Center Management
Serving the mid-Atlantic region, Novant Health has 15 medical centers, over 500 medical group practices, close to 4000 medical staff providers, and over 530,000 ED visits per year. Twelve of Novant Health’s acute care facilities have outpatient infusion centers. Last year, in 100 chairs and beds, we cared for more than 6500 patients in 34,000 visits, helping manage the health of the communities we serve. In this busy environment, to maintain a high level of care and a robust future for outpatient infusion, proper financial management is critical. Several steps are vital to maximizing revenue in infusion services, including the following:
- Determine opportunities for improvement
- Create strategies to address the most significant areas
- Optimize the revenue cycle
- Take ownership of financial management in infusion services
Novant Health’s approach to managing revenue in the infusion center is outlined in FIGURE 1.
Evaluate: Identify Opportunities for Improvement
The continually changing landscape of products and payors yields significant opportunities for ongoing improvement. To optimize this site of care, invest either in an internally-led or externally-led assessment of infusion services. If internal talent and capacity is available, organizations can certainly evaluate the business on their own. This low-risk/low-return approach can be extremely effective, especially if high-return opportunities have already been addressed. On the other hand, hiring an external consultant will add risk in terms of cost, but may generate a higher return. Along with expertise and capacity, an external consultant also brings a sometimes much-needed outside perspective. Furthermore, with recommendations from external consultants often carrying more weight than those from internal resources, you can also leverage the voice of an external consultant to gain organizational support for opportunities that you have already identified internally.
Novant Health began assessing its infusion centers with the help of an external consultant several years ago. An internal consultant from Novant Health’s Organization Development department partnered with the external consultant to help navigate the system and ensure the appropriate stakeholders were involved. The assessment identified key infrastructure needs regarding organizational structure, cost center structure, and the pharmacy charge description master (CDM), along with multiple opportunities to improve operations and human experience. As a result of the collaboration with the external consultant, we also developed internal expertise, and last year launched a second internally led formal assessment focused on revenue cycle and operational standardization opportunities.
Execute: Create Strategies to Address High-Margin Opportunities
Whether an organization chooses an internal or external evaluation approach, it is important to assess the entire business: from top referrers to workflow and from product mix to margin. Securing the right supporting structure prior to beginning is key, so start by evaluating the business reports and pharmacy CDM and then move on to the operational elements.
Design Infrastructure Improvements
The importance of developing a business statement/plan for infrastructure improvements specific to the infusion areas cannot be overemphasized. Many infusion centers are set up to mirror nursing departments, with only the nursing components of the profit and loss business captured. However, because pharmaceutical products typically make up the vast majority of the expenses and charges in this site of care, it is essential that both pharmacy and nursing are included in the cost center financial statements.
Developing a true business statement requires time and engagement from nursing, pharmacy, finance, revenue cycle, and the electronic health record (EHR) teams. The business statement will facilitate an understanding of margins and help manage spend and reimbursement. Consequently, the executive team will have confidence that the business will support the strategic growth required to meet community needs.
The pharmacy CDM should be evaluated early on in this process. Product markup should be aligned with the organization’s values: a markup too high is unethical and will likely lead to unwanted publicity, while a markup too low may jeopardize the viability of the business. Additionally, it is critical to validate that various elements of the CDM are accurate; inaccurate National Drug Code (NDC) numbers and Healthcare Common Procedure Coding System (HCPCS) codes can lead to costly billing errors, as can inaccurate calculations. One example was discovered wherein 1 milligram of an IVIG product was billed every time 500 milligrams were used; most of the visits exceeded timely filing requirements, so this money was unrecoverable. Knowing the payment methodology for all major payors is critical, particularly for payors with percentage of charge contracts. When we evaluated Novant Health’s markup, we found that it was so low on multiple products that we were not even recovering drug cost, so we implemented changes to our markup basis and methodology.
For our markup basis, we elected to use cost since this would most fairly correlate cost to charge. We have seen infusion centers that use cost as a basis where the same multiplier is applied to all products to generate charge, and others where drugs seemed to be randomly paired with different multipliers; both of these methods can lead to undercharges, overcharges, and inconsistent charges. With the goals of fairness, consistency, and transparency, we developed manageable categories with markups for each and tested products to ensure resulting charges were fair and consistent.
Optimize Site of Care
Clinicians and administrators alike often have the perception that an infusion center is simply the area that provides chemotherapy and blood transfusions. While this is accurate, the infusion center also provides non-oncology infusions and injection therapies; a lack of awareness of these non-oncology infusion and injection therapies can hinder strategic oversight of the business. It is important to recognize that chronic disease management outside of oncology can contribute significantly to the bottom line while also improving community health. This potential is often overlooked when infusion services are seen as an offering only within the oncology service line.
Growing the infusion center service line requires identifying community needs and local specialty physicians who require infusion services for their patients. Infusion typically sees high volumes of oncology, neurology, gastroenterology, rheumatology, and infectious disease patients. If an organization does not see volume in these specialties, it is important to understand why and determine whether these opportunities exist.
While specialty physician referrals can boost financial performance and improvements in community health, a focus on other referral pathways can increase volume and support efforts to transition patients to the most appropriate, efficient, cost-effective site of care. Examples include the following:
- Hospitalists can help identify inpatients who could be discharged to continue antibiotics in outpatient infusion, reducing length of stay
- Community or infectious disease physicians can refer patients with simple cellulitis directly to the infusion center rather than to the ED
- ED physicians can help identify patients who could return to the infusion center for treatment, avoiding admissions and readmissions
- Patients needing treatment for rabies exposure can receive a first injection in the ED and subsequent injections in the infusion center; however, we often found that these patients returned to the ED for every injection, increasing cost to the patient and adding avoidable volume to busy EDs
- Obstetric patients with severe nausea who have a predictable need for hydration can be treated in the infusion center rather than the ED. Efforts to identify such patients and route them to the infusion center helps relieve pressure on the ED and puts the patient in the most appropriate site for the service needed
For all referrers, use of the infusion center will increase if a physician’s assistant, nurse practitioner, or physician staffs the center to provide medical oversight. In the state of North Carolina, pharmacy is fortunate to hold a dual credentialing as Clinical Pharmacy Practitioners through the state boards of pharmacy and medicine. For Novant Health and other health systems, this provides an opportunity to expand access and medical oversight in infusion centers directed by these practitioners. We expect this model to grow as health systems continue to look for ways to ensure they are maximizing use of outpatient places of service.
Ensure Efficient and Effective Processes
The best strategies to address operational opportunities grow out of the inclusion of cross-functional teams at the outset of the project, during the assessment itself. Engage those team members performing the work, who can speak to actual rather than prescribed processes. This cross-functional expertise not only gains buy-in from multiple teams, it also leads to the development of the most informed solutions. Process improvement work in our infusion center is driven through collaboration with nursing, case management, laboratory, revenue cycle, finance, pricing, providers, practice managers, service line leaders, and for support, operational design and improvement. These relationships have grown stronger over time and have enabled pharmacy to drive multiple infusion efforts.
Optimize the Revenue Cycle
From the provider and patient perspective, scheduling is typically the first process encountered in the infusion center. To ensure this experience is a positive one, evaluate the scheduling process. Consider who does the scheduling and where they sit, as both of these variables affect the quality of the scheduling experience. Some infusion centers have schedulers who are part of the infusion center department and can devote all of their attention to the infusion center’s patient and departmental needs; in other centers, schedulers sit outside of the infusion space in a central location, scheduling for multiple departments. While having dedicated schedulers in the infusion center might prove the best model for patients, nurses, and providers, budget constraints often prohibit this, particularly in a large system with multiple infusion sites.
With the explosive growth in the infusion business, capacity expansion is required at many centers; carefully built scheduling templates along with tight pharmacy, lab, and nursing workflows can help provide additional capacity without the need for extending hours or expanding space. For example, minimizing patient wait times in infusion chairs increases access, creating room for the urgent and emergent visits that providers expect. Scheduling rules designed to match the right drug to the right time can redistribute the traditionally heavy morning patient volumes throughout the day, providing a more consistent experience for patients and caregivers.
If the infusion center is at capacity, extending open hours and days is another way to enhance access without physical expansion. Analyze visit data carefully and seek feedback from patients and providers to ensure it makes sense from both a fiscal and human experience perspective. For patients who work, evening or weekend appointments can be a powerful differentiator that sets your infusion center apart, so if volume justifies the expense, extending hours can be extremely positive. Offering services 7 days a week may be necessary to fully support non-traditional use of the infusion space, such as transitioning inpatients to the infusion center for antibiotics.
Insurance Verification and Prior Authorization
Once scheduling is complete, the insurance verification and prior authorization processes are set in motion. Work with the organization’s revenue cycle teams to understand and improve upon these processes. Identify what information is available regarding denials in the infusion space and brainstorm ways pharmacy can support revenue cycle in obtaining authorizations and appealing denials. While the team members who appeal denials often have clinical backgrounds, those working in insurance verification and prior authorization often do not. With the right workflow in place, pharmacy can help support the prior authorization team by providing clinical perspective for challenging cases.
If the organization’s revenue cycle teams are performing at a high level, make sure infusion stakeholders are aware. Oftentimes, physicians who have moved from private practice to join a health system highlight the lack of communication they experience related to prior authorizations and denials. For example, at one hospital where the prior authorization completion rate before patient visit was nearly 100%, providers were concerned that the hospital was not capturing reimbursement due to lack of prior authorizations. Team performance was stellar, but nobody shared that story with pharmacy, nursing, or providers. Thus, the importance of comprehensive communication throughout the organization cannot be overstated.
Pharmacy can support efforts to optimize infusion chair time by identifying ways to ensure medications are available as soon as possible. This requires a close analysis of automated medication dispensing systems, IV room schedules and protocols, and pneumatic tubing systems or other medication delivery methods. Including nursing in these efforts will ensure critical problems are identified and appropriate solutions are developed. Utilizing the services of a specialty pharmacy within the health system can also improve medication availability.
In the past, most commercial payors have reimbursed products delivered in the infusion center at a percentage of charge, with claims filed under the medical benefit. Cost to the payor has varied widely depending on charges generated by a given hospital, but the influx of expensive biologics and orphan drugs has compounded that issue and forced payors to implement strategies to manage cost. For example, payors are increasing the number of products that must be procured from specialty pharmacies, where they can better control and project cost. In addition, payors are shifting from medical benefit to prescription benefit coverage, which often offers technological efficiencies and better management and outcome tracking, ultimately helping manage cost.
To ensure medication access in anticipation of these changes, Novant Health launched an in-house specialty pharmacy in 2014. By working with manufacturers and payors, we have improved medication access and medication therapy management for our patients.
Products from Outside Pharmacies
The decision to allow products from outside pharmacies should be carefully considered. Chain of custody arguments on one side should be deliberated along with ensuring patient access on the other. If an infusion center permits products from an outside specialty pharmacy due to payor requirements, or if free drug programs are used, the pharmacy must take steps to ensure accurate billing occurs.
It is not unusual for patients to receive bills for medication from the hospital since it is essentially indistinguishable from items purchased by the hospital pharmacy. Work with the EHR team to determine whether there is an option to flag the product and ensure that the flag, or indicator, follows the drug through the system. Ideally, that flag would serve as an alert to pharmacy team members and would also trigger no charge for the product. Without a comprehensive electronic solution, pharmacy must develop processes to ensure the patient is billed accurately for the visit. In our system, while we await an electronic solution, we see the most success with a manual tracking process that follows the product from order receipt to the charge verification queue.
Medication and Patient Assistance Programs
Medication and patient assistance programs are typically well supported by pharmacy team members in the community and specialty space, and pharmacy can also effectively support these programs in the hospital setting. This support would likely require additional resources, but the potential for medication replacement and reimbursement recovery more than make up for such an investment. To build a business case for an enhanced medication and patient assistance program, demonstrate the total dollar impact based on existing manufacturer programs for current products in use. At Novant Health, our medication and patient assistant team members each bring in between $1 million and $4 million dollars annually, depending on the service lines they support. Once program assistance is established, leverage the dollars made and saved to justify program expansion.
Product Selection and Clinical Pathways
Pharmacy can also have a significant impact on the infusion business by managing product selection and employing clinical pathways. While formulary management is status quo in the inpatient environment, unfortunately, that is not always the case in the outpatient setting. In the past, product use was largely physician-driven. In addition, costs and volumes were lower, and in a fee-for-service environment, broad use of products had fewer repercussions. With increasing costs and higher volumes, however, outpatient formulary management has become essential. Assessing both cost and payment in addition to clinical benefit, and then identifying preferred products, can have a dramatic effect on the bottom line. The current influx of biosimilars increases the urgency of such an approach.
It is prudent to introduce the clinical pathway approach by first adopting a pathway for just one product, such as an antiemetic, to demonstrate the value and help build support for wider implementation. Formulary management, along with clinical pathways, provides cost benefits, inventory control, and most importantly, contracting opportunities. Commercially available software is available to support clinical pathways, or they can be developed internally.
From a nursing perspective, accurate charting is one of the most important elements of the infusion business. In some centers, nurses enter their own charges, while in others, a separate charge team is responsible for this step. There are pros and cons with each method, so careful consideration is required to identify the best approach for your organization. When using paper charting, the potential for errors and lost charges is high; electronic charting can help ensure the correct current procedure terminology (CPT) code is used for the nursing administration fees associated with each visit, along with the start and stop times of the infusion, an often overlooked aspect of infusion billing. Even when electronic charting is utilized, those responsible for charge entry must receive proper training to understand the appropriate use of CPT codes, as the terminology is not always intuitive. If pharmacy has oversight of the infusion service line, perform random chart audits to determine whether there are opportunities for education to ensure proper charting.
Define Scope of Care
The scope of care for outpatient infusion may not be as clearly defined in the infusion space as it is in other hospital departments. Reviewing the existing scope of care document may reveal opportunities to more specifically delineate what services are covered and whether non-ambulatory patients can be treated in the outpatient infusion area. This approach will help prepare the center for growth and ensure the scope of care document aligns with the infusion center’s strategic direction.
It is critical that referring providers and infusion center nurses maintain a collaborative relationship focused on providing the highest quality care for their patients. To ensure this, evaluate how the organization’s nurses and providers rate their communication with one another. Use this assessment to identify room for improvement, and then help facilitate a solution. In our experience, improving communication is a simple process but one that requires awareness by all parties.
Leverage a Collaborative Approach
Pharmacy should play a leadership role in infusion center management while leveraging the relationships formed during the assessment process to implement recommended changes. Once our pharmacy began leading efforts to create a business statement, amend our markup, and improve operational processes, the organization began looking to pharmacy to support additional infusion projects. In addition, as we have opened new hospitals, pharmacy has been an integral partner in the physical design, workflow design, and marketing of infusion centers. When the EHR was implemented, pharmacy joined with the organization’s IT teams to facilitate learning communities for infusion center nurses and pharmacists during and after the launch.
Most recently, pharmacy collaborated with nursing to lead our organization’s second formal infusion assessment. Cross-functional teams evaluated processes to identify the most significant opportunities for improvement and to develop strategies to address them. Findings from that assessment have resulted in improvements that have:
- Reduced denials by providing physician education regarding documentation requirements
- Optimized infusion chair time with the use of refined scheduling templates and revised workflows with the laboratory
- Improved safety and quality by clarifying order sets
- Improved the scheduling experience for patients, providers, and team members by identifying appropriate schedulers, placing them in the right space, and refining the scheduling template
Centralize: Build the Case for Pharmacy-Centralized Oversight
When pharmacy demonstrates leadership in the infusion space by assessing the business and driving improvement efforts, and if pharmacy leads using a cross-functional team approach to gain buy-in from all stakeholders, the organization will begin to view pharmacy as a significant influence in the infusion center.
After our organization’s first assessment, with the assistance of our financial partners, pharmacy began creating unique cost centers, business statements, and growth projections, and receiving requests to explain variances for these cost centers. The finance department began viewing pharmacy as the owners of the infusion space, which bolstered our ability to influence decisions surrounding the business. In turn, pharmacy changed our approach to outpatient products in the pharmacy and therapeutics process and began managing use more deliberately than we had in the past. We carefully considered how to facilitate growth and identify areas for expansion.
During the 6-year period since our initial assessment, in addition to developing cost centers, business statements, and implementing a new markup methodology, pharmacy also made several additional improvements in infusion center management:
- Identified billing errors that garnered $500,000 in collections
- Gained approval for an outpatient infusion center best practice team
- Developed and implemented nursing and pharmacy productivity metrics specific to infusion
- Created a program manager of outpatient infusion position in pharmacy to help manage the infusion business
- Created a leadership structure to support that manager
- Added positions to focus on prior authorizations, denials, and medication and patient assistance
As pharmacy has spearheaded efforts in the outpatient center, the infusion business has tripled in size during this 6-year period.
Secure Executive Sponsorship
Securing executive sponsorship for pharmacy-centralized oversight of infusion was the logical next step for our operation. While we have made significant improvements in the business, our infusion centers currently have multiple leaders, making standardization and strategic planning challenging. The strides we have taken over the past few years have demonstrated to leadership that the infusion space, which is growing in importance as we shift emphasis from inpatient to outpatient care, requires a service line approach. With the vast majority of the expense (at Novant Health, pharmacy accounts for over 80% of infusion expenses [see FIGURE 2]) and charge dollars flowing through the infusion center driven by pharmacy, pharmacy leadership is critical to the management of this space.
Our recent assessment resulted in one recommendation to the executive team: implement pharmacy-led centralized oversight of infusion. Considering the drive to deliver additional services in the outpatient setting, and with new products continually available, effective business oversight is essential for providing optimal access, growing service delivery, managing affordability, and delivering a high-quality human experience in the infusion space. Pharmacy is uniquely qualified to provide this oversight.
Optimizing the infusion center requires maximizing financial management, including evaluating the pharmacy CDM, expanding the referral base, improving access to medications by building the case for medication and patient assistance programs, properly managing product use, and making the case for pharmacy-centralized oversight. As Novant Health’s experience illustrates, developing a pharmacy influence in the infusion center can drive significant benefits to the facility.
Jeffrey S. Reichard, PharmD, MS, BCOP, BCPS, is the director of pharmacy for infusion, oncology, and specialty pharmacy service lines at Novant Health. He received his Doctor of Pharmacy from the University of North Carolina at Chapel Hill Eshelman School of Pharmacy.
Shelley Rae Sigmon, MA, is the program manager for outpatient infusion for Novant Health. She provides strategic, financial, and operational direction and support for Novant Health’s hospital-based infusion centers. She received her Master of Arts degree from the University of North Carolina at Chapel Hill.
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