Retrospective analysis of billing at a standalone medication therapy management clinic

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1 Retrospective analysis of billing at a standalone medication therapy management clinic Keri D. Hager, Pharm.D., BCACP, College of Pharmacy, University of Minnesota, Duluth Rena A. Gosser, Pharm.D., BCPS, University of Wisconsin Hospital and Clinics, Madison. Copyright 2016, American Society of Health-System Pharmacists, Inc. All rights reserved /16/ DOI /ajhp Purpose. Results of a study comparing reimbursement for medication therapy management (MTM) services with a resource-based relative value scale (RBRVS) versus a time-based billing model are reported. Methods. Reimbursement claims for MTM services provided by a standalone clinic during a 6.5-year period were reviewed. Actual billing amounts calculated according to Minnesota s RBRVS for MTM services, which emphasizes case complexity as a determinant of payment rates, were compared with hypothetical billing amounts calculated using a strictly timebased method designed to more accurately capture the costs of providing MTM services. A paired t test was conducted to analyze differences in the billable amounts calculated via the two methods. Results. Reimbursement claims for a total of 525 face-to-face MTM encounters with 60 patients were analyzed. Using the RBRVS method, the mean ± S.D. billing amount per encounter was $83.71 ± $36.67; using the strictly time-based method, the mean ± S.D. billing amount was $ ± $34.55 per encounter (mean difference, $28.12; p < ). These findings indicate that the use of time-based versus RBRVS-based billing methodology would have resulted in an additional $14,763 in MTM services reimbursement for the 525 evaluated encounters. Conclusion. The RBRVS-based method consistently resulted in a lower billing amount per encounter than the strictly time-based billing method, suggesting that reimbursement for MTM services may not be aligned with the actual costs of providing those services. The Current Procedural Terminology (CPT) nomenclature was developed in 1970 by the American Medical Association (AMA). 1 The CPT code set was created for health professionals to use in billing for services provided to patients. 1,2 Initially, pharmacists were not included among the parties authorized to bill for services via CPT codes, as traditional dispensing was the sole or primary role of most pharmacists in the early 1970s. 1 In 2002, the Pharmacist Services Technical Advisory Coalition requested that the CPT editorial board establish billing codes for clinical services provided by pharmacists. 1,2 In 2005, category III (temporary) CPT codes enabling pharmacists to bill for medication therapy management Am J Health-Syst Pharm. 2016; 73:77-81 (MTM) services were established. 1,2 In 2007, the MTM service codes were upgraded to category I (permanent status). 1 The following CPT codes are currently used to bill for MTM services (the descriptors are abridged): (initial encounter; first 15 minutes) (follow-up encounter; first 15 minutes) (each additional 15 minutes of face-to-face time during an encounter) In 1992, AMA collaborated with Harvard University and the Health Care Financing Administration (now called the Centers for Medicare and AM J HEALTH-SYST PHARM VOLUME 73 NUMBER 2 JANUARY 15,

2 MEDICATION THERAPY MANAGEMENT CLINIC Medicaid Services [CMS]) to create the Medicare Resource Based Relative Value Scale (RBRVS) in response to a Social Security Act mandate. 3 The RBRVS was created to respond to inconsistencies in payment rates for physician services. Prior to the RBRVS, the usual, customary, and reasonable system was commonly used. 4 That system was fraught with increasing costs and payment disparities across different primary care settings, motivating government to seek alternative methods of payment to control costs. 4 During RBRVS development, a mathematical formula for calculating the resources associated with services and procedures across 18 of the most commonly provided categories of medical specialty services was derived. 4 The major resources used in providing those services and procedures were identified as Time to conduct service or procedure, Preservice and postservice time, Intensity (per time) of service or procedure, Practice costs and malpractice insurance premiums, and Opportunity cost of postgraduate training required to become a qualified specialist. In 2005, Minnesota statute 256B.0625, subdivision 13h, was enacted to define MTM s role in pharmaceutical care and establish pharmacists as providers of MTM services. 5 It mandated that MTM services provided by pharmacists to medical assistance beneficiaries be covered. This statute charged the commissioner of the Minnesota Department of Human Services to assemble an MTM Advisory Committee, which was responsible for establishing an RBRVS for the new MTM program similar to the payment systems used by other primary care providers. Under the resulting RBRVS, implemented in 2006, reimbursement for MTM services is based KEY POINTS An RBRVS-based billing method consistently resulted in lower reimbursement per encounter for MTM services than a time-based billing method. If reimbursement does not cover the actual costs of providing MTM services, MTM programs cannot be sustainable and remain available to patients. The RBRVS does not factor in the potential fiscal benefits of improved patient outcomes resulting from MTM services; this may be an area of opportunity for pursuing additional sources of revenue with the shift from a fee-for-service payment system to payment based on patient outcomes. on the patient s number of conditions, number of, and number of drug. 5 The purpose of the retrospective single-center study described in this article was to compare actual billing amounts using Minnesota s RBRVS for MTM services and an alternative, strictly time-based billing method through analysis of reimbursement claims submitted over a 6.5-year period by the MTM clinic operated by the University of Minnesota, Duluth, Medication Therapy Management Clinic. Methods The UMD College of Pharmacy MTM clinic primarily serves patients whose payer uses the RBRVS model, which allows for billing at five levels of service complexity (Table 1). The level of service billed is based on the patient s level of need, as determined by the number of medical conditions, the number of, and the number of drug identified at the face-to-face visit (the lowest level of complexity at which those three criteria are met is the billing level). Although an approximation of required face-to-face time is given for each level of complexity, it is irrelevant to final billing determinations. The Minnesota Department of Human Services provides an example of an RBRVS reimbursement table on its website, 6 but the reimbursement rates presented may vary by payer. The payer that furnished claims data for the study described here used the same RBRVS model used by Minnesota health officials but different (i.e., payer-defined) billable rates per encounter. The actual dollar amount billed by the UMD MTM clinic was identical to the amount reimbursed to the clinic. Claims for face-to-face MTM encounters submitted by the MTM clinic from November 1, 2007, through April 22, 2014, were included in the study. These data were obtained from a single payer that used the RBRVS exclusively. Claims were excluded from the analysis if the patient had not signed a clinic intake consent form or was not seen face-to-face (non-face-to-face encounters were not reimbursable and therefore not billed). Time-based billing claim amounts were determined according to the level of billing that corresponded to the actual face-to-face time spent with a patient in a given encounter. The time spent with the patient was documented in the patient encounter note and extracted for this study. A paired t test (alpha level, 0.05) was used to compare the dollar amount billed per the RBRVS table to the dollar amount that would have been billed using a strictly timebased billing method. Additionally, multivariate linear regression analyses were conducted to determine the influence of patient sex and age, as well as the numbers of medical conditions,, and drug therapy problems evaluated, on the total time per encounter. All analyses were 78 AM J HEALTH-SYST PHARM VOLUME 73 NUMBER 2 JANUARY 15, 2016

3 conducted using SPSS software, version 21.0 (IBM Corporation, Armonk, NY). This study was approved by the University of Minnesota institutional review board. Results Of the 1024 claims generated by the MTM clinic during the study period, 525 claims involving 60 patients (30 female and 30 male patients) met the inclusion criteria. The mean ± S.D. patient age at the time of encounter was 62 ± 9 years. The mean ± S.D. number of medical conditions assessed per encounter was 9 ± 4, the mean ± S.D. number of assessed was 12 ± 6, and the mean ± S.D. number of drug identified and resolved was 1 ± 1. The mean ± S.D. face-to-face patient encounter time was 47 ± 18 minutes. Using the time-based billing method, the calculated mean ± S.D. billed amount was $ ± 34.55, compared with a mean ± S.D. billed amount of $83.71 ± $36.67 using the RBRVS; the mean ± S.D. difference of $28.12 ± $37.34 per encounter was statistically significant (p < ), indicating that use of the RBRVS resulted in a lower mean billed amount than did time-based billing. Discussion A search of the peer-reviewed literature identified no studies that examined how well currently used reimbursement tables reflect the actual time it takes pharmacists to provide MTM services; however, there are published studies of RBRVSbased billing in the medical profession. Cooper and Kramer 7 examined the accuracy of RBRVS-based cost assignment in a variety of medical practices and concluded that RBRVS methodology is highly flawed. They noted that a variety of procedures and services may be assigned the same cost value even though some are more complex and require more specialized expertise than others. Table 1. Minnesota Department of Human Services RBRVS for Medication Therapy Management Services a,b Rate for Initial/ Follow-up Visit ($) CPT Code(s) and Billable Units c Face-toface Time (min) Complexity of Care Planning and Evaluation Identification of Drug Therapy Problems Assessment of Drug-Related Needs Service Level or (1 unit) 52/34 Straightforward; 1 medical condition 1 Problem focused; 1 medication Problem focused; 0 drug 76/ or (1 unit) and (1 unit) Straightforward; 1 medical condition Expanded Problem; 1 drug therapy problem 2 Expanded Problem; 2 100/ or (1 unit) and (2 units) Low complexity; 2 medical conditions 3 Detailed; 3 5 Detailed; 2 drug therapy problems 124/ or (1 unit) and (3 units) Moderate complexity; 3 medical conditions Expanded Detailed; 3 drug 4 Expanded Detailed; /130 > or (1 unit) and (4 units) High complexity; 4 medical conditions Comprehensive; 4 drug 5 Comprehensive; 9 a RBRVS = resource-based relative value scale, CPT = Current Procedural Terminology. b Adapted from reference 6. c Billable units, as determined by level of service and complexity. AM J HEALTH-SYST PHARM VOLUME 73 NUMBER 2 JANUARY 15,

4 MEDICATION THERAPY MANAGEMENT CLINIC Although the study of Cooper and Kramer focused on ophthalmology practice and did not examine cost assignment for MTM services, it provided insight into the inefficiency of RBRVS-based billing across various types of healthcare practices. Law et al. 8 discussed the negative impact that flawed reimbursement systems may have on the growth of MTM services. They conducted a survey examining community pharmacists perspectives of MTM; the survey was administered to various community pharmacists via a National Community Pharmacists Association newsletter link. Many pharmacists reported documentation, billing, and reimbursement issues as barriers to initiating an MTM practice in their pharmacies. 8 The study described here focused on a small, nonrandomized, retrospective sample of patients from a single MTM clinic in Minnesota; therefore, the results have limited external validity. The encounter details, however, are comparable to those reported in a small number of previous studies Because reimbursement amounts differ by state and payer, the dollar amounts reported here may not accurately represent other MTM clinics reimbursement experiences. Claims data were excluded from the study sample if the payer did not use the RBRVS, which may have influenced calculations of average differences in monetary values derived from RBRVS- versus time-based billing. Also, the RBRVS does not factor in the potential fiscal benefits of improved patient outcomes resulting from MTM services; this may be an area of opportunity for pursuing additional sources of revenue or cost savings in the near future as the traditional fee-for-service payment system is retired in favor of payment based on patient outcomes. The Minnesota Department of Human Services RBRVS table for MTM services (Table 1) was used to determine the billed amounts via the time-based billing method, but that information does not take into account the true costs of providing those services. The RBRVS for MTM services does not contain several cost items included in the state s medical RBRVS (i.e., preservice and postservice time, intensity per time for the service or procedure, practice costs, malpractice premiums, and opportunity cost of postgraduate training). The RBRVS for MTM services should be reevaluated to ensure that it is aligned with the cost of resources required to provide MTM services. The potential impact of pharmacist compensation and studentconducted clinic visits on MTM services billing was not examined in our preliminary study. Pharmacy students do not collect a salary yet may require more pharmacist time (for teaching purposes) relative to other MTM service providers, which could have had an impact on the calculated amounts billed using the time-based billing system. Students may also save pharmacist time by completing documentation or conducting research, allowing the pharmacist more time to complete other tasks. MTM services reimbursement is an important consideration for all pharmacists regardless of practice setting. The adoption of the Affordable Care Act (ACA) will undoubtedly affect pharmacy practice across all settings. With the goals of decreasing healthcare costs and improving patient care, the ACA allows CMS to contract with accountable care organizations (ACOs) under Medicare. 12,13 ACOs operate under an integrated service model that provides incentives for collaborative teams to care for patients across the healthcare continuum. 12,13 Additionally, payment structures will increasingly shift away from the traditional fee-for-service payment toward payment based on patient outcomes. If specific measures are met, healthcare providers will share in the savings that an ACO achieves for the Medicare program. 13 As ACO participants, pharmacists can help patients manage and chronic conditions along with other members of the healthcare team. Pharmacists may help to reduce components of overall healthcare costs (e.g., medication costs, hospitalizations, readmissions), as demonstrated by research conducted prior to ACA adoption. 14 Currently, multiple stakeholders are trying to establish ACOs, but wide adoption of this integrated service model has not yet occurred. The feefor-service model is still in use and still the primary driver of MTM services reimbursement. If reimbursement for MTM services does not cover the actual costs of providing those services, MTM programs cannot be sustainable and remain available to patients. Conclusion. The RBRVS-based method consistently resulted in a lower billing amount per encounter than the strictly time-based billing method, suggesting that reimbursement for MTM services may not be aligned with the actual costs of providing those services. Disclosures The authors have declared no potential conflicts of interest. Additional information Presented as a poster at the American College of Clinical Pharmacy Annual Meeting, Austin, TX, October 13, The authors acknowledge Ron Hadsall, Ph.D., for assistance with statistical analyses, and Don Uden, Pharm.D., for assistance with editing. References 1. Isetts BJ, Buffington DE, for the Pharmacist Services Technical Advisory Coalition. CPT code-change proposal: national data on pharmacists medication therapy management services. Am J Health-Syst Pharm. 2007; 64: Centers for Medicare and Medicaid Services. Part D medication therapy management (MTM) programs fact sheet (November 2012). gov/medicare/prescription-drug- Coverage/PrescriptionDrugCovContra/ Downloads/CY2012-MTM-Fact-Sheet. pdf (accessed 2014 Oct 14). 80 AM J HEALTH-SYST PHARM VOLUME 73 NUMBER 2 JANUARY 15, 2016

5 3. Physician payment reform: the physician s guide. Vol 1. Chicago: American Medical Association; Hsiao WC, Braun P, Becker ER, Thomas SR. The Resource Based Relative Value Scale: toward the development of an alternative physician payment system. JAMA. 1987; 258: Isetts BJ. Evaluating effectiveness of the Minnesota Medication Therapy Management Care Program: final report (December 14, 2007). archive.leg.state.mn.us/docs/2008/ mandated/ pdf (accessed 2015 Sep 3). 6. Minnesota Department of Human Services. Medication therapy management services (MTMS). ww.dhs. state.mn.us/ main/idcplg?idcservice=get_ DYNAMIC_CONVERSION&Revision SelectionMethod=LatestReleased& ddocname=dhs16_ #P142_9017 (accessed 2014 Oct 14). 7. Cooper R, Kramer TR. RBRVS costing: the inaccurate wolf in expensive sheep s clothing. J Health Care Finance. 2008; 34(3): Law AV, Okamoto MP, Brock K. Ready, willing, and able to provide MTM services? A survey of community pharmacists in the USA. Res Social Adm Pharm. 2009; 5: Watkins JL, Landgraf A, Barnett CM, Michaud L. Evaluation of pharmacist provided medication therapy management services in an oncology ambulatory setting at a comprehensive cancer center. J Am Pharm Assoc. 2012; 52: Smith S, Cell P, Anderson L, Larson T. Minnesota Department of Human Services audit of medication therapy management programs. J Am Pharm Assoc. 2013; 53: Ramalho de Oliveira D, Brummel AR, Miller DB. Medication therapy management: 10 years of experience in a large integrated health care system. J Manag Care Pharm. 2010; 16: Patient Protection and Affordable Care Act, Pub. L. No , Academy of Managed Care Pharmacy. Pharmacists as vital members of accountable care organizations (April 2011). DownloadAsset.aspx?id=9728 (accessed 2014 Oct 14). 14. Chisholm-Burns MA, Lee JK, Spivey CA et al. US pharmacists effect as team members on patient care: systematic review and meta-analyses. Med Care. 2010; 48: AM J HEALTH-SYST PHARM VOLUME 73 NUMBER 2 JANUARY 15,