Optimize Capture Rates in the Outpatient Pharmacy

October 2019 - Vol. 16 No. 10 - Page #2

Q&A with Dennis Killian, PharmD, PhD; William C. Cooper, RPh, PD; and Gregory K. Shaeffer, MBA, RPh, FASHP

Pharmacy Purchasing & Products: What strategy directed Peninsula Regional Medical Center’s efforts in opening an outpatient pharmacy?

Dennis Killian, William C. Cooper, and Gregory K. Shaeffer: Peninsula Regional Medical Center (PRMC) in Salisbury, Maryland, a 266-bed subsidiary of the Peninsula Regional Health System, has operated an ambulatory pharmacy since 2013. Our reasons for opening the outpatient pharmacy were threefold:

  1. Improve care by ensuring patients leaving the hospital receive their life-saving medications
  2. Reduce 30-day readmissions related to drug therapy upon discharge, which has a strong impact on reimbursement
  3. Decrease overall prescription costs for employees in our PBM benefit plan

To accomplish these goals, our strategy was to capture as many employee and patient prescriptions as possible.

PP&P: What processes do you leverage to optimize employee prescriptions in the outpatient pharmacy?

Killian, Cooper, and Shaeffer: To operate a successful outpatient pharmacy, it is essential to incentivize employees to fill their prescriptions at the pharmacy. At PRMC, it took about 3 to 4 months after go-live to capture a significant percentage of employee prescriptions. When we evaluated why this was more challenging than anticipated, we discovered that the pharmacy that previously managed employee refills often relied on automatic refills that did not take dosage changes or discontinuations into consideration, and in some cases, had not been requested. For example, some employees reported having 6 months’ worth of a given medication as well as test strips in their homes. This haphazard medication management practice initially soured employees’ opinions of the more regimented outpatient pharmacy program. To change this attitude (and to reduce medication waste), we focused on supplying employees with only a 30-day initial supply and then migrated to a 90-day supply once the patient’s status was reviewed and the regimen was determined to be effective. While the 30-day supply could be filled at any pharmacy, the 90-day supply could only be filled in the hospital’s outpatient pharmacy.

Communicating the additional benefits of the outpatient pharmacy was crucial to gaining staff buy-in for its use. For example, we were able to offer staff significant discounts, including a reduced copay; generic medications from the outpatient pharmacy have a $10 copay, while the same medications sourced from a retail pharmacy carry a $20 copay. The lower cost and increased convenience were extremely effective in incentivizing employees to use our service; from January through May of 2019 we realized a 91% prescription capture rate for non-specialty medications on almost 20,000 prescriptions and a 95% prescription capture for specialty medications on 300 prescriptions (see online-only FIGURES 1 and 2 at pppmag.com/outpatientfigures).

Active communication with Human Resources (HR) was crucial to PRMC’s ability to offer these employee benefits. To incentivize use of the outpatient pharmacy, be sure to work in close collaboration with the HR department.

PP&P: What were your top considerations when choosing a pharmacy benefits manager (PBM) to manage the prescription drug plan?

Killian, Cooper, and Shaeffer: When choosing a PBM, it is critical that the hospital take the lead in delineating what is required. Rather than letting the PBM direct the conversation, the hospital should drive negotiations. Use the request for proposal (RFP) process to establish any non-negotiable priorities, such as lower copays and benefit design that preferences the ambulatory pharmacy for all medications including refill and specialty pharmacy prescriptions. Ultimately, PRMC’s top priorities in choosing a PBM were flexibility and customizability; the PBM must be willing to make concessions that benefit the hospital.

Important tips to keep in mind when choosing a PBM include the following:

  • Be selective in choosing a formulary plan. Although many generic formulary plans are available, not all will fit your hospital’s needs. When evaluating different plans, be sure to take into account the available pharmaceutical rebates and percentages. One of the ways PBMs capture revenue is by obtaining rebate dollars from pharmaceutical companies based on utilization of certain agents, often branded products. Therefore, it is important that hospitals negotiate a percentage of that revenue. PRMC shares in a rebate program developed by the PBM based on our formulary.
  • Choose a PBM that offers robust reporting capacity. The PBM we selected allows us to mine data at any time without assistance. This has proven extremely useful, as we have direct access to information whenever it is needed. Some PBMs require the hospital to submit a request for data and then wait for the report to arrive, which can be time-prohibitive. We can directly query the data to determine where specialty prescriptions are being filled, for example. The PBM’s customizable dashboard allows us to monitor formulary alignment, prescription capture rates, member-paid vs plan-paid percentages, generic substitution rates, etc.
  • Cost is not the only consideration. When choosing a PBM, it is easy to focus simply on price; however, pricing is only one consideration. It is also critical to analyze the PBM’s cost structure (see SIDEBAR). In addition, if the PBM requires the hospital to use their specialty pharmacy or mail order business, this can negatively impact the ambulatory pharmacy’s revenue. To ensure the benefit design is conducive to serving the health system’s bottom line, negotiation is mandatory to represent the health system’s interests. We found that some PBMs offered contracts that were incompatible with our pharmacy’s goals; the PBM we ultimately selected understood the objectives within the PRMC framework.

PP&P: What are the benefits of the Meds-in-Hand Program?

Killian, Cooper, and Shaeffer: It is not uncommon for a patient to leave the hospital with a prescription they will never fill. Also known as a Meds-to-Beds program, the goal of our Meds-in-Hand program is to capture patient prescriptions in our outpatient pharmacy and ensure patients leave the facility with the medications they need. This can reduce readmissions, and it is also convenient for patients, as they can go straight home without needing to stop at a retail pharmacy to fill a prescription.

Nationally, about 26% of hospital readmissions within 30 days are a direct result of a preventable medication-related incident or error.1 We face a unique challenge in that the state of Maryland is under a Center for Medicare and Medicaid Innovation (CMMI) project; one facet of this demonstration project requires that patient readmissions be tracked for all patients (regardless of their insurance source) and for all disease states. As an all-risk state, it is important for hospitals in Maryland to be able to minimize the re-admission rate related to medications.

Increasing our capture rate via the Meds-in-Hand program is a critical task for the outpatient pharmacy. Our strategies to achieve this include the following:

    • E-prescriptions. Utilizing e-prescribing allows the PRMC outpatient pharmacy to vet coverage prior to the patient filling the prescription. Thus, if there is a cost or insurance issue, the problem is addressed quickly, prior to a patient being discharged. Utilizing e-prescribing also facilitates investigation of any manufacturer copay assistance that might be available to patients. Moreover, we have a program in place that allows indigent patients to access medications.
    • Pharmacy Counseling During Intake. When using our e-prescribing tool, patients are required to choose the pharmacy they would like to fill their prescription. This is an excellent opportunity for staff members (including nurses, social workers, and discharge planners, as well as pharmacists) to explain the benefits of the Meds-in-Hand program to the patient and ensure that the outpatient pharmacy captures the prescription.
    • Gaining Staff and Patient Buy-In. When we first opened the outpatient pharmacy, we anticipated that the physician would direct the patient to the outpatient pharmacy during the discussion about take-home medications. However, this strategy proved impractical for physicians, so now nurses, social workers, discharge planners, and pharmacists have assumed this responsibility. Upper management reviews the program in staff meetings, highlighting the importance of reducing readmissions. Notes in the EMR remind nurses to discuss the program with patients. We have experienced significant success utilizing this strategy.
      To gain patient buy-in for the outpatient pharmacy’s services, it is critical not to wait until the day of discharge for this conversation to occur. Approach patients early, focusing on the convenience and lower cost of the outpatient pharmacy and related programs, such as Meds-in-Hand.
  • Ambulatory Pharmacy Manager as Advocate. Understanding the customer base is key to any successful outpatient pharmacy endeavor. The entire team must recognize that we serve three distinct customer bases: discharge patients, employees, and the hospital. Keeping the focus on the goal of making sure the patient has the medication in their hands when leaving the hospital benefits both patients and the facility as it decreases readmissions. Moreover, by focusing on providing the employee with convenient, professional service, we gain the employee’s confidence, which also impacts day-to-day interactions throughout the hospital. This increases the ambulatory pharmacy’s employee prescription capture rate, which improves the hospital’s bottom line. The manager must be able to serve as an advocate to focus all employees on the goals of the outpatient pharmacy, in order to drive both employee and patient satisfaction.

PP&P: How is the new telehealth program furthering the goals of the Meds-in-Hand program?

Killian, Cooper, and Shaeffer: The 30-day readmission window is a crucial time during which patients must be closely monitored. PRMC recently began a new telehealth program that monitors the patient from the time they return home through the ensuing 30 days. The program utilizes a population health transition team, which works collaboratively with the Meds-in-Hand program. The team focuses intently on the patient to ensure they will remain healthy to avoid readmission within 30 days of discharge. Because the day of discharge can be hectic, making it challenging for a patient to absorb all of the information that is being conveyed, a robust 30-day plan is critical.

PRMC’s strategy to reduce 30-day readmissions includes the following elements:

  • Comprehensive Management by Transition Team Members. Because issues with medications are the most common reason for readmission, it is critical for pharmacy to be an integral part of the telehealth group. Once the patient has been designated for discharge, an ambulatory pharmacist visits the patient’s room to review their discharge medication list and to let them know we will call to check on them 24 to 48 hours post-discharge. After the patient returns home, a community health worker visits to help set up their two-way, real-time, visual data feed so we can communicate with the patient. On the post-discharge call, pharmacy again reviews the medication list with the patient. This is a critical step, as discrepancies are often discovered at this stage (eg, forgotten medications, over-the-counter and herbal products, etc). Another video chat is then scheduled 10 to 14 days later to capture any new medications that have been added during follow-up visits with the patient’s primary care provider or specialist (eg, cardiologist, pulmonologist, etc) and to update the medication list accordingly. The pharmacist can then assess if the patient has had any cost or medication-related challenges in obtaining their medications and ensure days 14 to 30 progress as smoothly as possible.
  • LACE+ Score. The LACE+ index score (Length of Stay, Acuity of Admission, Comorbidities, Emergency Department Visits) helps identify patients at high risk of readmission. If a patient is identified as high risk, they are visited by the transition team’s decentralized pharmacist for counseling prior to discharge. More information about the LACE+ score is available at:
    www.cmaj.ca/cgi/doi/10.1503/cmaj.091117 2
  • The Discharge Kit. The telehealth program provides a kit that the transition team uses to ensure the patient is healthy in the home after discharge. Kits are specific to individual disease states; for example, the congestive heart failure kit includes the tools necessary to weigh the patient on a daily basis, including an internet-connected tablet to record weights and communicate with the team; a blood pressure cuff; and a pulse oximeter. A tablet stores all the patient’s data for each day, which is accessible to the hospital team. These tools help the patient monitor their symptoms at home while automatically sharing this data with the care team. For example, should the patient’s blood pressure rise significantly, we are able to reach out and intervene quickly. For patient education, the kit also includes a short video that discusses possible side effects of the medication(s). This helps with patient compliance, as this information can easily be forgotten when given at the point of discharge.

PP&P: In your experience, what are the keys to successfully optimizing ambulatory pharmacy services?

Killian, Cooper, and Shaeffer: Two elements are crucial to the success of an outpatient pharmacy enterprise: pharmacy ownership of ambulatory initiatives and developing a culture of trust among all relevant stakeholders.

The most important element contributing to the success of the outpatient pharmacy is pharmacy’s rigorous involvement in the day-to-day management of the department’s offerings. Pharmacy must have a prominent seat at the table in order to capture employee and patient prescriptions and to prevent readmissions post-discharge.

Secondly, developing trust among pharmacy staff, other hospital employees, patients, and hospital management is essential to capturing business in the outpatient pharmacy. For example, employees may fear that if they fill their prescriptions with the outpatient pharmacy, their privacy may be compromised. Pharmacy is integral in educating patients that their health information is private and will remain secure. Employees must trust that the ambulatory pharmacy staff will protect their private medical information properly. Moreover, hospital management must trust the ambulatory pharmacy team to get the job done and maintain focus on the best interests of the hospital.


  1. Pellegrin KL, Lee E, Uyeno R, et al. Potentially preventable medication-related hospitalizations: A clinical pharmacist approach to assessment, categorization, and quality improvement. J Am Pharm Assoc. 2017;57:711-716.
  2. van Walraven C, Dhalla IA, Bell C, et al. Derivation and validation of an index to predict early death or unplanned readmission after discharge from hospital to the community. CMAJ. 2010;182(6):551-557.

Dennis Killian, PharmD, PhD, graduated from the University of Maryland-Baltimore School of Pharmacy, obtaining a PharmD in 1999 and a PhD in Pharmaceutical Sciences in 2001. He currently serves as director of pharmacy services at Peninsula Regional Medical Center (PRMC) in Salisbury, Maryland, where he has been employed since 2005. Dennis has also served as an associate professor of pharmacy practice and administration at the University of Maryland Eastern Shore (UMES) School of Pharmacy since 2010.

William C. Cooper, RPh, PD, received his BS in Pharmacy in 1984 from the University of Maryland-Baltimore School of Pharmacy. He currently serves as the ambulatory pharmacy manager at PRMC, where he has been employed since 1994.

Gregory K. Shaeffer, MBA, RPh, FASHP, graduated from the Temple University School of Pharmacy in 1974 with a Bachelor of Science in Pharmacy and the Temple University Fox School of Business with an MBA in 1988. He recently joined the faculty of the UMES School of Pharmacy as an assistant professor of pharmacy practice and administration. Greg is also the principal at Shaeffer Consulting Group, LLC.


Pharmacy Benefit Manager Cost Structure Options:
Pay As Submit vs Pass Through

When we first opened the outpatient pharmacy we were reimbursed under the traditional model, often referred to as Pass Through, wherein the PBM uses an algorithm to determine pricing. For example, PBMs typically use a Maximum Allowable Change (MAC) table to determine pricing. However, experience has shown that PBMs may not proactively update the table, and it is not unusual for drug shortages to impact pricing. So when using an algorithm, it is necessary to continually manage the process to ensure reimbursement remains accurate.

The benefit of using the Pay As Submit cost structure is that the PBM pays the amount we specify, based on our costs to provide the medication to the patient, including an administration fee. When using Pay As Submit, we can be confident we will receive a predictable amount, as this method is simple and transparent. When using the Pass Through model, our margins deteriorated over time; under the Pay As Submit model, we were able to significantly improve our margins. Receiving a predictable margin facilitates a profitable, self-sustaining program, while at the same time minimizing the organization’s costs.



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