Boost Pharmacy Revenue

Ryan Lindenau, PharmD

DeAnn Mullins, BPharm, CDE

Jodi Lavin-Tompkins, MSN, RN, CDE

Independent community pharmacies are operating under what may appear to be perfect storm conditions. Squeezed by rising drug costs, declining reimbursement rates, and increasing competition, they’re battling choppy seas in search of new and diverse revenue streams.

But there is a ray of sunshine. As the healthcare system shifts to value-based payments, the role of the pharmacist as a dispenser of prescriptions is evolving to one of total healthcare provider.

It’s a logical extension of what pharmacists already do, and an opportunity they need to take advantage of, says Patrick Devereux, PharmD, RPh, president of Family Medical Services (FMS) Pharmacy in Bessemer, AL.

“The pharmacies that are going to be sustainable in business-and this applies to chains and independents-are the ones that embrace a model of clinical services to improve patient outcomes and not solely rely on dispensing,” he says. 

For Devereux and many other community pharmacists, adding diabetes education to the clinical services they offer to patients is a particularly compelling option.

Diabetes by the Numbers

One-and-a-half million Americans are diagnosed with diabetes every year, according to the American Diabetes Association (ADA), and 30.3 million are already living with it, either knowingly (23.1 million) or unknowingly (7.2 million). Another 84.1 million Americans have a diagnosis of prediabetes. That’s roughly 116 million potential candidates for either diabetes self-management education and support (DSMES) or a diabetes prevention program (DPP).

Translating those statistics into dollars and cents is an eye opener. Earlier this year the ADA announced that diabetes is now the most costly chronic illness in the country, with expenses totaling $327 billion in 2017. Medical expenses for people with diagnosed diabetes average $16,752 per year, with $9,601 of that directly attributed to the condition itself.

“The data indicate one of every four healthcare dollars is incurred by someone with diagnosed diabetes, and one of every seven healthcare dollars is spent directly treating diabetes and its complications,” the ADA says.

Many of those dollars are already being spent in independent pharmacies, where statistics from the Hamacher Resource Group show that diabetes care is the top-selling category, garnering almost 40% of sales.

The 2017 National Standards for Diabetes Self-Management Education and Support states that DSMES is a critical component of diabetes clinical services. Pharmacists have medication expertise that makes them key players in helping patients manage their health. Several studies have revealed the significant impact pharmacy-based DSMES programs can have on lowering A1c levels. Unfortunately, only 5% to 7% of individuals eligible for DSMES through Medicare or private insurance take advantage of it, according to the ADA.

Getting Started

Pharmacists considering adding diabetes clinical services to their offerings should apply the same due diligence they would to any important business decision. DeAnn Mullins, BPharm, RPh, CDE, the owner/operator of Mullins Pharmacy and WeCare Diabetes Education Program in Lynn Haven, FL, offers a list of questions to get started:
 

• Why do you want to provide diabetes clinical services?

• What are your goals?

• What are the needs in your community?

• Are there established and successful DSMES programs in your area?

• Is the local health department offering an accredited program for free?

• How can you work with health departments and local hospitals?

• Are you going to bill Medicare, or will you offer classes for free?

“Some pharmacists say they want to get into the diabetes niche when they really just want to have a sugar-free candy aisle, a wall of brochures, maybe beef up their counseling at the counter, or counsel individual patients one at a time,” Mullins says. Other pharmacists want a program that’s recognized by the ADA or accredited by the American Association of Diabetes Educators (AADE). There are more than 2,000 ADA-recognized and AADE-accredited DSMES program sites in the U.S.

“Accreditation shows that you have a formal structure in place, that you are using evidence-based guidelines in the delivery of your program and content, that you’re following quality standards, and that you’re doing continuous quality improvement,” explains AADE Director of Accreditation Jodi Lavin-Tompkins, MSN, RN, CDE, BC-ADM.

David Pope, PharmD, CDE, a Drug Topics editorial advisor and a cofounder of Strand, a company that helps community pharmacists launch clinical services, notes becoming certified can take a long time.

Before starting the accreditation process, there are many ways pharmacists can engage with and gauge the interest of patients and physicians. “If a patient comes in and you check an A1c, you can do a blood sugar or blood pressure test, set goals for that patient, and communicate that directly into the electronic health record of the physician,” Pope suggests. 

If patient and physician feedback is positive, the next step-actually getting reimbursed for diabetes education-requires accreditation through ADA or AADE. “Before you can bill anyone, you have to be able to show that you have a standard in place, that you have structure and organization, that you have a means of being able to reach outside your organization to receive feedback through an advisory committee, and other specific steps with documentation and education,” explains Pope. He emphasizes the importance of establishing a standard of quality upfront since that’s what healthcare pays for now.

The path to accreditation includes completing paperwork, creating a teaching manual, taking one patient through an educational program, documenting appropriately, and communicating to the provider. The pharmacist then completes the ADA or AADE application and interviews with the appropriate organization.  

“It’s arduous-it can be up to a two-year process-but it can be done,” says Pope.

Diabetes Education in Practice

Ryan Lindenau, PharmD, coordinates an AADE-accredited diabetes education program out of Middleport Family Health Center in western New York State. It serves about 40 patients a year in four different locations. The four-week sessions are based on the pharmacy’s own curriculum adapted from AADE resources. 

“If we have somebody who wants to take diabetes classes, the first thing we do is send a provider information sheet to their doctor to explain the class. They sign the form and fax it back to us for our files,” Lindenau says.

Pharmacists don’t have provider status in New York, and collaborative practice agreements are restricted to teaching hospitals, so Lindenau says developing strong relationships with local providers is important to the success of the program. Doctor referrals account for about 25% of class participants, with an equal number coming from word of mouth. The other half of the class is typically made up of customers who learn about the program from pharmacy staff. 

Before classes begin, Lindenau or one of the two PGY1 residents who work with him meet with the patient one-on-one to review lab work, do a medication therapy review, set testing goals, and make recommendations to their doctor.

The classes, which run two hours each and meet four times, are taught by Lindenau, a clinical pharmacist, or one of the residents. Topics include background information on diabetes, including treatment goals, self-monitored blood glucose testing goals, and education; underlying diabetes pathophysiology and common comorbidities; healthy lifestyle coaching that covers diet and exercise; medication management, including a review of diabetes medications on the market with an emphasis on therapies the students are currently taking and an adherence assessment; a review of diabetes complications  and risks; and a discussion of  diabetes, depression, and stress management.

Once students have completed the class, they are contacted by an instructor for follow-up sessions at six months and one year to assess their progress.

Return on Investment

Lindenau reports that the program, which began in 2012, has delivered a good return on the pharmacy’s investment, in part because using PGY1 residents cuts down on some of the operational costs. The rate of return runs about $50 to $60 per insured person per class, and Lindenau says it usually takes only five to 10 successfully billed patients each year to come out ahead financially. Billing is done directly through a patient’s medical benefit, the same as for any other covered DME.

“Out of the 40 patients, we might successfully bill only 25,” he says, explaining that not all patient managed care plans are contracted with the pharmacy to bill for DME that include diabetes disease state education. Because pharmacists in New York lack provider status, some commercial plans deny claims because they don’t recognize pharmacy as a place of service for DSMES.

“But we’re potentially gaining some new customers who don’t normally fill their scripts at our pharmacy,” Lindenau says. “And there’s not a class that goes by that one or more patients aren’t asking the pharmacist about a vitamin or supplement or moisturizer. They usually buy something, so we’re profiting from that perspective.”

Trickle-down Effects

All pharmacists interviewed for this article agree that reimbursement for diabetes education programs is still low compared to the quality of the services they deliver. However, they also concurred that it’s enough to offset the costs of developing the program.

Devereux advises pharmacists who are on the fence to look at the big picture and not to underestimate the power of branding.

“You have to look at it from a revenue perspective and from a branding and customer loyalty perspective,” he says. “The argument I used to hear was, ‘You don’t want patients to get off medicine, right? That’s your business.’ Well, maybe, but then again wouldn’t you rather have sustainable revenue coming in that doesn’t depend on dispensing a prescription? Patients are healthy and they’re coming to you for things to prevent other health issues and to eat healthy and take vitamins-things that you sell that don’t involve a drug.”

After almost 20 years in diabetes education, Mullins has developed her own perspective on what makes a successful program. “Your curriculum and belief about education are just as important as financial viability unless you are in a health system or other type of market where patients and referring providers don’t have a choice [of which pharmacies they visit],” she says. “But if you’re really out there as an entrepreneur, you better have good outcomes, and curriculum is a huge piece of that. Your approach to how you help people along this journey and how you personalize it make it meaningful.”   

Top 4 Misconceptions About Pharmacy-Based Diabetes Education Programs 

You must be a Certified Diabetes Educator (CDE) to be accredited or bill for diabetes education.
  
The standards for diabetes education set by the ADA and AADE are very clear that a CDE designation is not required. Medicare is not as clear, according to many frustrated pharmacists. Devereux reports that initially it took months to sort out payment with Medicare because he wasn’t billing under an NPI number like a CDE would. He notes that pharmacies and hospitals go through the same accreditation process, but pharmacies consistently have problems with reimbursements.  

A diabetes education program requires a team of experts (RN, CDE, RPh, nutritionist) to be recognized or accredited.
  
Not true. In fact, Lavin-Tompkins of AADE says the only requirement is that there is at least one pharmacist, nurse, or dietician as an instructor. However, she admits that having a CDE onboard adds a certain caché to the program. “It shows that you have a certain level of expertise and skill,” she explains.

Local physicians will automatically refer patients to your program.

On the contrary, it is critical to develop good partnerships with local physicians and educate them about the services you’re offering. Mullins recalls that she was recruited by a group of physicians in 1999 to teach an ADA-recognized diabetes education class for their practice. Eventually, it led to her becoming a CDE. “The more collaborative practice opportunities you have, the sooner you can act on clinical decision making,” she says.Studies Show Diabetes Self-Management Education Works

} A 2016 review of medical literature published in Patient Education and Counseling found that diabetes self-management education works for people with type 2 diabetes. The review looked at 18 unique interventions and found that 61.9% of them reported significant changes in A1c levels. Overall mean reduction in A1c was 0.74 and 0.17 for intervention and control groups, with an average absolute reduction in A1c of 0.57. The largest decreases in A1c (0.88) were seen with a combination of group and individual engagement. Interventions that had 10 or more contact hours were associated with a greater proportion of significant reduction in A1c (70.3%). In patients with persistently elevated glycemic values (A1c>9), a greater proportion of studies found statistically significant reduction in A1c (83.9%). The study can be found at https://bit.ly/2NAZMfr.
} A study of an interprofessional program in a community pharmacy setting looked at 309 patients with diabetes who were seen over a 16 month period. Of these, 120 patients completed a 10-hour diabetes training program. Clinical outcomes showed an improvement in A1c from 9.1 before enrollment to 7.5 after the program, and a drop in body mass index from 35.7 before enrollment to 32.4 after the program. The pharmacy was also able to increase its reimbursement for the services provided. The study appeared in Innovations in Pharmacy and can be found at https://bit.ly/2A6wAte.

Patients will pay out of pocket.

Not necessarily, so pharmacists need to decide whether they will charge patients who are uninsured. “We do not because we don’t turn anyone away and we want to make sure that we’re offering care to everybody who needs it,” says Lindenau. In fact, Pope suggests that one way to initially engage with people with diabetes is to offer a simple, regularly-scheduled diabetes class inside the pharmacy and not bill for it. “Focus on being the subject matter expert in your area,” he recommends.

Studies Show Diabetes Self-Management Education Works
A 2016 review of medical literature published in Patient Education and Counseling found that diabetes self-management education works for people with type 2 diabetes. The review looked at 18 unique interventions and found that 61.9% of them reported significant changes in A1c levels. Overall mean reduction in A1c was 0.74 and 0.17 for intervention and control groups, with an average absolute reduction in A1c of 0.57. The largest decreases in A1c (0.88) were seen with a combination of group and individual engagement. Interventions that had 10 or more contact hours were associated with a greater proportion of significant reduction in A1c (70.3%). In patients with persistently elevated glycemic values (A1c>9), a greater proportion of studies found statistically significant reduction in A1c (83.9%). 

A study of an interprofessional program in a community pharmacy setting looked at 309 patients with diabetes who were seen over a 16 month period. Of these, 120 patients completed a 10-hour diabetes training program. Clinical outcomes showed an improvement in A1c from 9.1 before enrollment to 7.5 after the program, and a drop in body mass index from 35.7 before enrollment to 32.4 after the program. The pharmacy was also able to increase its reimbursement for the services provided.