Community Pharmacy Trends: Payment Models & Services

Is your pharmacy doing everything it can to diversify revenue, improve patient outcomes, and stay relevant? DIR reform and its pharmacy reimbursement challenges are around the corner in 2024. It's the latest curveball thrown at independent community pharmacy in recent times. 

Is your pharmacy fully capitalizing on all revenue options, improving patient outcomes, and keeping pace with the latest developments? What strategies can we employ to ensure the continued existence of these crucial independent community pharmacies and their ability to enhance access to care? We believe that the solution is multi-faceted, but should encompass the following elements:

• Optimizing existing clinical programs including vaccines and medication synchronization.
• Strong emphasis on providing quality patient care programs such as point of care, urgent care, or chronic disease management with a focus on outcomes.
• Ensuring that dispensing visits are of high quality and that reimbursement aligns with the requirements of medical payors.
• A shift in the perception of independent community pharmacies among patients, healthcare providers, insurance payors, and pharmacy teams themselves to viewing ourselves as providers who should be reimbursed for medical decision making.

Independent community pharmacies have undergone a remarkable transformation, evolving from simple medication dispensaries into comprehensive healthcare hubs that offer a wide range of clinical services. Traditionally, community pharmacies relied mainly on prescription sales and over-the-counter medications to generate revenue. However, this revenue model has evolved as pharmacies increasingly offer clinical services such as immunizations, medication management services, and point-of-care testing.

This transformation not only benefits patients but can also significantly enhance a community pharmacy's profits through cash-based services and medical billing for visits. This diversification reduces reliance on prescription sales alone, which can be affected by factors like drug prices and reimbursement fluctuations.

COVID-19 was a time of change for independent community pharmacies. These providers showed up for patients to fill their medications after hours or during lockdown, and nimbly showed they would show up for everything from vaccines to point-of-care testing and monoclonal antibody services, even if not done previously.

Clinical services, whether paid for in cash or billed to medical payors, will play a pivotal role in securing the future of independent community pharmacies. The opportunities are abundant and come with substantial rewards, but the actual implementation presents a formidable challenge. One major obstacle in rolling out these programs is the need to create clinical initiatives from scratch with limited external assistance or resources. This entails the development of protocols, workflows, collaborative practice agreements, establishment of point-of-care testing facilities, acquiring the skills to handle medical billing, and ensuring that patients and healthcare providers are aware of the expanded services offered. Historically, these tasks have been tackled in isolation in the independent community pharamcy space, consuming an excessive amount of administrative time that could otherwise be dedicated to patient care.

Here's how using clinical experts to help with expanding successful clinical services can boost a community pharmacy's profitability:

1. Diversification of Revenue Streams: By offering and expanding upon existing clinical services such as immunizations, health screenings, and medication management programs, pharmacies can diversify their revenue streams..
2. Increased Foot Traffic: Clinical services attract more foot traffic to the pharmacy. Patients coming in for vaccinations or health screenings may also purchase other items while in the store, boosting over-the-counter sales.
3. Medication Billing and Reimbursement: Many clinical services provided by pharmacists are billable and reimbursable through medical insurance. Services like vaccine assessments, medication management, point-of-care testing and treatment programs, acute needs such as urinary tract or yest infections, and chronic disease management can be billed for, leading to a steady supplemental income stream.
4. Enhanced Patient Loyalty: Offering clinical community services builds stronger patient-pharmacist relationships. Patients who receive personalized care are more likely to return to the same pharmacy for their medication needs, fostering customer loyalty.

Let's also take a closer look at some clinical pharmacy care that can be particularly beneficial for a community pharmacy's profits, whether cash-paid or medically billed:

1. Immunizations: Many vaccines are reimbursable through insurance plans, but there are also ways to optimize revenue from vaccine programs. Considering the large gap in vaccine needs, by performing vaccine assessments, one can increase revenue with increased vaccine sales alone. Additional strategies might include streamlined workflow and billing for vaccine consultations or enrolling in the vaccines for children program. These valuable services positively impact the health of your community while also generating additional revenue from vaccine assessments and medical billing.
2. Medication Management: Turning dispensing into a quality encounter, including review and optimization of medications, is billable to medical insurance if medically indicated and appropriately documented. Medication management services can involve comprehensive medication reviews and consultations, a focused evaluation of one's disease state, or even de-prescribing. Pharmacies can bill for these services using office visits, preventative counseling, or medication therapy management codes, which not only generate revenue but also lead to better patient medication adherence and improved health outcomes.
3. Chronic Disease Management: Pharmacies can offer disease management services for conditions like diabetes, hypertension, hyperlipidemia, and asthma. These billable services often involve regular monitoring, education, and medication adjustments. By providing these encounters, pharmacies can engage with local providers and further demonstrate their value as part of the healthcare team to payors.
4. Health and Wellness Programs: Pharmacies can develop health and wellness programs that incorporate clinical services, such as weight management programs or tobacco cessation clinics. These programs may be billable or attract participants willing to invest in their health. Participants may also purchase associated products, further contributing to revenue.

In conclusion, the transformation of clinical community pharmacies into comprehensive healthcare hubs represents a significant opportunity for both patient care and profitability. By expanding clinical services, diversifying revenue streams, and effectively utilizing medical billing opportunities, these pharmacies can not only weather the challenges posed by the upcoming DIR reform but also thrive in the evolving healthcare landscape. Building stronger patient and provider relationships and offering valuable services like immunizations, medication management, chronic disease management, and health and wellness programs not only improve patient outcomes but also contribute to the financial health of independent community pharmacies. By embracing this multifaceted approach, these pharmacies can secure their vital role in the healthcare ecosystem.