The expanding role of pharmacy in ACOs

BY Peyton Howell

While the ultimate impact of healthcare reform is still being debated, one trend is clear: Accountable care organizations continue to pick up steam. An ACO is a unique healthcare delivery model defined as a network of healthcare providers who share responsibility for coordinating high-quality care across a specific patient population. The concept is not new and, in fact, is based largely on integrated health system models that have been successful for many years. However, this model was only applied to public payer models as part of the Patient Protection and Affordable Care Act two years ago. Since then, numerous ACOs have launched, and many more are in development. In fact, as of the end of May, 221 ACOs had been identified across 45 states.1 In addition, in July, the Centers for Medicare and Medicaid Services announced the selection of 88 new ACOs, translating into coverage for more than 2 million seniors in 40 states and the District of Columbia under Medicare shared savings initiatives.

Both public and private ACO models have been formed to lower costs, improve care and create better health outcomes. The ACA-mandated Medicare Shared Savings Program first sparked ACO development, and commercial payers now are creating their own private-sector ACOs. CMS also introduced the Pioneer Program, which allows ACOs to contract with the federal government and commercial payers.

The current ACO landscape appears to feature physicians and hospitals as the targeted players in the ACO model. In response, the pharmacist community has voiced its concerns that ACO programs are undermining pharmacists’ role in integrated care systems. Since the introduction of the MSSP, pharmacy groups have urged CMS to actively include community pharmacists in ACO-data sharing.2 While pharmacist groups seek ways to become recognized as integral parts of ACOs, they emphasize their lack of control over prescription drug costs — so they are not perceived as liable for ACO costs tied to drug spending.3

Pharmacy stakeholder groups have emphasized the important role of community pharmacists in improving patient outcomes and lowering overall healthcare costs. Data suggest that pharmacists in integrated delivery structures help improve patient care by managing patients’ medications.4 In fact, many pharmacists already are integrated into medical homes across the nation.

Expanded role of pharmacists

ACOs will present some key opportunities to pharmacists — from increased collaboration with providers to expanded access to patient information and interaction. Under the ACO model, all caregivers should have greater access to patient health information, enabling them to assemble more complete and accurate treatment plans. As pharmacists tend to have one-on-one interactions with patients, they are well positioned to assist patients in identifying gaps in care, seeking out appropriate care and gaining patients’ buy-in for the new ACO structure.4 Given the focus on quality performance and cost reduction, there will be a need for pharmacists in post-discharge medication management as well. Currently, some pharmacists in integrated care systems provide follow-up phone calls to ensure patients are taking the correct medications and receiving appropriate lab tests post-discharge.

Community pharmacists will face some challenges when trying to integrate into ACO programs, as the current structure minimizes the role of pharmacists in the patient care process. Currently, the MSSP and Pioneer Program do not have an explicit role for pharmacists in ACOs. Pharmacists do have the opportunity to become part of an ACO via subcontracting. It’s important to note, however, that being an official component of ACOs would lead to more meaningful collaborations with other ACO providers and would allow pharmacists to influence ACO governance, help dictate patient treatment standards and pathways, and share in savings with other providers and suppliers.4

Value-based environment depends on a more holistic view to costs and outcomes. Pharmaceutical treatment costs must be examined in the context of the total treatment received or there is a risk that expenses related to their use could be targeted for cost reduction even though the efficient use of pharmaceuticals can lead to overall lower medical costs.5

In the absence of having a clearly defined role in the ACO, pharmacists may be left out of discussions regarding program structure and metrics. And because of the gap in pharmacy-based quality metrics in ACO programs, there’s no way to track pharmacists’ contributions toward the organization. As a result, pharmacists will need to actively engage and communicate their value to ACOs and may need to redefine their workflows to collaborate with physicians, nursing staff and other suppliers within ACOs.


Pharmacist groups should continue to engage in dialogue with payers/ACOs to encourage community pharmacist inclusion in ACO structures. In doing so, pharmacists can bring attention to their involvement in helping to control costs and improving patient care. Given the ongoing pressure from the pharmacy community to include pharmacists in the ACO structure, the role of pharmacists likely will expand over the next few years. In the absence of guidance from CMS and payers, it remains uncertain how pharmacists’ scope of practice will evolve, though we may see pharmacy-based ACOs and quality metrics emerge in the near future. Regardless, pharmacists will need to remain flexible as their roles may become increasingly primary-care focused under the ACO model.

Peyton Howell, MHA, is president of AmerisourceBergen Consulting Services and SVP business 
development for AmerisourceBergen Corp.


  1. Leavitt Partners, Growth and Dispersion of Accountable Care Organizations: June 2012 Update.

  2. Yap D. Pharmacy to CMS: Explicitly include pharmacists in ACOs. American Pharmacists Association.

  3. CM/HTMLDisplay.cfm&ContentID=26185. Accessed March 8, 2012.

  4. Stein M. Pharmacists Pursue Legislative, Contractual Strategies To Gain Key Role In ACOs. Daily News Updates from Inside Health Policy.

  5.    CMS/Inside-CMS-03/01/2012/menu-id-316.html. Accessed March 1, 2012.

  6. Pharmacists as Vital Members of Accountable Care Organizations. Academy of Managed Care Pharmacy. Accessed February 16, 2012.

  7. ACO Success Depends on Optimal Medication Management. The Pink Sheet. July 23, 2012


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Pharmacists can help reduce 
Medicaid costs

BY B. Douglas Hoey, RPh, MBA

As states grapple with tight budgets, rising Medicaid costs and the anticipated expansion of Medicaid following the Supreme Court’s decision to uphold the Patient Protection and Affordable Care Act, policy-makers should consider how community pharmacists can help reduce expenses. In addition, new evidence offers a fresh reminder of the perils of managed care in Medicaid and the need for proper oversight of managed care entities.

Recently, Bloomberg government released a study of managed care plans in the nation’s five most populous states. It found the plans are delivering substandard care, characterized as “significantly and consistently worse than the national median.” It added that lower-quality care can lead to higher health spending through more costly medical interventions.

This comes on top of earlier questions about Medicaid managed care. The New York Times has drawn national attention to the diminished pharmacy access of Texas patients after a new managed care plan slashed pharmacy reimbursements by some 80%, forcing some pharmacies to close in the Rio Grande Valley. Separately, the state of Connecticut banished private insurance companies from its Medicaid program, citing “a diminishing confidence in the value of what they are providing.” In the Sunshine State, an examination by Georgetown University’s Health Policy Institute of Florida’s managed care pilot program found “no clear evidence that the pilot programs are saving money, and if they are, whether it is through efficiencies or at the expense of needed care.”

Alternatively, community pharmacists can help reduce Medicaid costs in a number of ways:

  • Drive greater use of low-cost generic drugs. Community pharmacies are already leading the way to maximize the appropriate use of generic medications — the most effective means to lower prescription drug costs without harming patients. Medicaid could save more than $600 million for every 1% increase in generic use. The Massachusetts fee-for-service Medicaid program has the highest generic dispensing rate in the nation, at 79.3%. If all other states achieved that rate, the Medicaid program could save $5.14 billion. States may forfeit savings from generic drugs if they rely on mail-order pharmacies owned by pharmacy benefit managers, commonly a part of managed care. PBM-owned mail pharmacies dispense generics 10% less often than local pharmacies, partly because they receive large manufacturer rebates for dispensing brand-name drugs.

Incorporate medication therapy management. Pharmacists provide one-on-one attention and prescription counseling to Medicaid beneficiaries with often-complicated health conditions and medication regimens. One percent of all beneficiaries account for 25% of expenditures. Expanding the use of low-cost MTM programs can help make a much greater dent in the $290 billion annual cost to the health system of poor medication adherence. Plus, community pharmacies afford patients access to low-cost immunizations and health screenings, in addition to receiving their prescriptions.

A state utilizing or implementing managed care into Medicaid should, at minimum, adopt some common-sense steps:

  • Transparency. Properly implementing aggressive transparency measures into contracts will result in savings that stay in the state, not funneled to an out-of-state corporation.

Patient choice and pharmacy competition. Allow all community pharmacies eligible to participate in federal health plans to participate in a state plan’s pharmacy network provided that the plan’s costs will be comparable or the same. This also assures that patients have choice and more taxpayer dollars remain in-state at local businesses.

Ensure fair compensation. While reducing costs, reimbursement must be fair and reflective of all aspects of providing prescriptions to Medicaid patients so that community pharmacies can continue to participate in the program. This should include accounting for Medicaid patients unable to afford their co-pay. In rural communities in particular, an independent pharmacy may be the only one for miles around, and loss of access can be devastating to patients.

Community pharmacists are committed to being part of the solution to reduce Medicaid costs. Managed care programs will not deliver the promised savings unless proper oversight is conducted and patient access to quality care is maintained.

B. Douglas Hoey is CEO of the National Community Pharmacists Association.


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Anna90 says:
Aug-30-2012 01:27 am

Medicaid costs are expensive enough today, lots of people get worry about their finances where there comes time to buy medicines. Reducing costs will can help make medicines more affordable, and that's very good because people usually spend lots of money on medicines and even apply for additional cash to buy some products. Pharmacy competition also plays an important role. All the pahrmatices want attract more consumers and successfully sale their products, but reducing costs can make the competition much stronger.



AMP progress validates pharmacy’s resolve

BY Steve Anderson

They say hindsight is 20/20. With the Supreme Court’s ruling on healthcare reform, the luxury of looking back shows that the National Association of Chain Drug Stores and allies took the right course to battle the pharmacy Medicaid cuts of the Deficit Reduction Act. What we learned should inspire pharmacy to remain tenacious in its continued advocacy on this issue and in confronting all other challenges.

No stone was left unturned as NACDS, the National Community Pharmacists Association and others waged an all-branches-and-all-levels-of-government strategy to attack the pharmacy cuts in the DRA that resulted from the average manufacturer price model. That is a good thing, as the cuts would have jeopardized access to pharmacy patient care, resulting in poorer health and increased long-term health costs.

No one could have predicted the complex twists that the battle over the AMP cuts would take after passage in 2006 of the DRA. The fact that a new approach to Medicaid pharmacy reimbursement would be included in a new healthcare-reform law — a law that itself would be the subject of a most unconventional and unexpected Supreme Court ruling — seems to fit the life story of this issue.

AMP’s path involved legal action, due to a lawsuit filed by NACDS and NCPA. It involved action by true friends of pharmacy in Congress who legislated a delay in the cuts. It also involved the use of research, public relations, grassroots mobilization, collaboration with patient advocacy groups, coordination with state government affairs and more.

All of these aspects of the fight led up to the crescendo that we knew all along would be necessary to address the AMP cuts: a change in the law itself. Community pharmacy achieved several improvements to the approach to Medicaid pharmacy reimbursement in one part of the much, much larger healthcare-reform law.

It is imperative that community pharmacy never forget the lesson of what, to this point, has been a six-year battle. Pharmacy worked in united fashion with a sound strategy. It found its voice in communicating the value of pharmacy to external audiences, instead of just preaching to the choir. It did not back down and stood its ground at every pivotal point. It was not deterred by an analysis of the odds, and it was motivated by a passion for patient care that could not be dampened.

However, our effort is far from complete. The implementation phase of the healthcare law will require a great deal of continued engagement by NACDS and its allies. That certainly is true of the executive branch’s implementation of the new AMP provisions. The great AMP debate is not yet over, nor is the larger effort to secure community pharmacy’s rightful place in an approach to healthcare delivery that offers the most promise for patients nationwide.

But when it comes to moving forward, at least pharmacy can find an example of success by looking back at all it already achieved in fighting the AMP cuts and securing much-needed victories for patient care.

Steve Anderson is president and CEO of the National Association of Chain Drug Stores.


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