The association between cost sharing, prior authorization, and specialty drug utilization: A systematic review

BACKGROUND: Specialty drugs are identified by high monthly costs and complexity of administration. Payers use utilization management strategies, including prior authorization and separate tiers with higher cost sharing, to control spending. These strategies can negatively impact patients' health outcomes through treatment initiation delays, medication abandonment, and nonadherence. OBJECTIVE: To examine the effect of patient cost sharing on specialty drug utilization and the effect of prior authorization on treatment delay and specialty drug utilization. METHODS: We conducted a literature search in the period between February 2021 and April 2022 using PubMed for articles published in English without restriction on date of publication. We included research papers with prior authorization and cost sharing for specialty drugs as exposure variables and specialty drug utilization as the outcome variable. Studies were reviewed by 2 independent reviewers and relevant information from eligible studies was extracted using a standardized form and approved by 2 reviewers. Review papers, opinion pieces, and projects without data were excluded. RESULTS: Forty-four studies were included in this review after screening and exclusions, 9 on prior authorization and 35 on cost sharing. Patients with lower cost sharing via patient support programs experienced higher adherence, fewer days to fill prescriptions, and lower discontinuation rates. Similar outcomes were noted for patients on low-income subsidy programs. Increasing cost sharing above $100 was associated with up to 75% abandonment rate for certain specialty drugs. This increased level of cost sharing was also associated with higher discontinuation rates and odds. At the same time, decreasing out-of-pocket costs increased initiation of specialty drugs. However, inconsistent results on impact of cost sharing on medication possession ratio (MPR) and proportion of days covered (PDC) were reported. Some studies reported a negative association between higher costs and MPR and PDC; however, MPR and PDC of cancer specialty drugs did not decrease with higher costs. Significant delays in prescription initiation were reported when prior authorization was needed. CONCLUSIONS: Higher levels of patient cost sharing reduce specialty drug use by increasing medication abandonment while generally decreasing initiation and persistence. Similarly, programs that reduce patient cost sharing increase initiation and persistence. In contrast, cost sharing had an inconsistent and bidirectional effect on MPR and PDC. Prior authorization caused treatment delays, but its effects on specialty drug use varied. More research is needed to examine the effect of cost sharing and prior authorization on long-term health outcomes.

A qualitative exploration of patient preferences for Medicare Part D consultation services offered in a community pharmacy setting

BACKGROUND

Community pharmacies currently offer Medicare Part D consultation services to help eligible beneficiaries select prescription medication insurance. Despite these service offerings, there is a paucity of information on patient preferences for these service offerings and optimal service delivery from the patient perspective.

OBJECTIVES

The objectives of this study were to (1) evaluate patient expectations of and willingness-to-pay (WTP) for community pharmacy Medicare Part D consultation services, (2) identify components of Medicare Part D consultation services associated with service quality, and (3) explore differences in preferences and service expectations between services-experienced and service-naive patients.

METHODS

This was a qualitative exploratory study, with data collected using interviews and a follow-up supplemental survey with participants recruited from 5 community pharmacies across the state of Iowa participating in the Community Pharmacy Enhanced Services Network. A total of 17 patients contacted the research team for participation. Interviews were recorded and transcribed, with qualitative data analysis performed using template analysis guided by the SERVQUAL framework. Interview participants were invited to complete a supplemental survey. Descriptive statistics and frequencies were generated for survey items. Service-experienced and service-naive survey responses Pearson chi-square and Welch t tests were used to determine significant differences between service-experienced and service-naive responses for categorical and continuous variables, respectively.

RESULTS

In total, all 17 patients who contacted the research team agreed to participate in interviews, with 8 service-experienced and 9 service-naive interviews completed. Template analysis identified 14 subdomains across the SERVQUAL domains. Similarities and differences in service preferences between groups were identified, focusing on patient-pharmacist trust, past service experience, and WTP. All interview participants completed supplemental surveys, with no statistically significant differences between service-experienced and service-naive participant characteristics identified.

CONCLUSIONS

Service-experienced patients emphasized components of the service that contribute to service quality and generally reported higher WTP values. Many service-naive patients were unaware community pharmacies provided consultation services, suggesting that pharmacists may benefit from considering how services are offered to patients based on the specific preferences and expectations and consider ways to increase awareness of service offerings.

Iowa community pharmacies' experiences with Medicaid managed care

OBJECTIVES

To describe Iowa community pharmacies' experiences and satisfaction with the transition to Medicaid managed care and conduct a qualitative evaluation of the effect of Medicaid managed care on 3 independent community pharmacies.

DESIGN

Cross-sectional descriptive study. Mixed methods were used: the quantitative phase was a mailed survey and the qualitative phase involved interviews.

SETTING AND PARTICIPANTS

The mail survey was sent to Iowa-registered community pharmacies whose names and addresses were obtained from the Iowa Board of Pharmacy website. Interviews with pharmacists and other pharmacy staff were conducted at 3 Iowa independent community pharmacies.

OUTCOME MEASURES

Pharmacy satisfaction and experiences with the Iowa Medicaid managed care program.

RESULTS

The 265 returned surveys yielded a 27.4% response rate. Eight pharmacists and pharmacy staff were interviewed in the qualitative phase. Mean satisfaction with the Medicaid managed care organizations (MCOs) was 3.1 on a scale of 1-7, with 1 being extremely dissatisfied, and 7 being extremely satisfied. Respondents were most satisfied with the ease of joining the plans' pharmacy networks (mean = 4.1) and least satisfied with the availability of payment for nondispensing-related services (2.3), plans' communication with patients (2.7), and plans' communication with pharmacies (3.0). Pharmacies also reported problems with patients' access to prescriptions. The MCOs ranked lowest in satisfaction when compared with the largest private payer, the largest Medicare Part D plan, and the previous state-run Medicaid program. The themes that emerged from the interviews were as follows: confusion caused by multiple MCOs, plan-communication challenges, product-coverage challenges, problems related to durable medical equipment, and payment challenges.

CONCLUSION

The transition from a state-run fee-for-service Medicaid program to Medicaid managed care in Iowa created many challenges for community pharmacies. Different procedures and product coverage across the 3 MCOs were particularly problematic.

Framework for assessing pharmacy value

INTRODUCTION

Excess spending and poor quality in the US healthcare system has led to proliferation of performance-based payment models. These models have the potential to enhance value by creating a meritocratic system whereby providers delivering the best patient care are rewarded, while providers failing to provide such care are given incentives to improve. However, early experience suggests that unless these systems are appropriately designed, payments can be withheld from high performers, bonuses paid to low performers, and health disparities can be worsened. Performance-based payments are new to community pharmacies, and opportunity exists to strengthen pharmacy value measurement and potentially avoid problems observed with other performance-based payment models.

MODEL CONSTRUCTION AND APPLICATION

This article describes the process by which a framework to assess community pharmacy value was developed, then applies the framework to produce a draft composite pharmacy performance measure. The pharmacy value framework addresses potential shortcomings of existing community pharmacy performance measures through four key principles: 1) theory-based quality and spending measures, 2) scoring which accounts for measure reliability, 3) full risk-adjustment, and 4) a value matrix to identify high and low value pharmacies. Based on these principles, a draft community pharmacy composite performance measure was developed, and was successful in dividing community pharmacies into high, typical, and low value categories.

CONCLUSION

By using this framework to develop future composite measures, payers may find closer alignment between performance-based payments and actual pharmacy performance. This early work is intended to encourage further research into the establishment of a scientifically firm foundation for pharmacy performance measurement. More testing is needed to determine reliability, validity, and comparative superiority of any composite measure derived from this framework before it is used to support performance-based pharmacy payment models.

Informal learning processes in support of clinical service delivery in a service-oriented community pharmacy

The evolving health care system necessitates pharmacy organizations' adjustments by delivering new services and establishing inter-organizational relationships. One approach supporting pharmacy organizations in making changes may be informal learning by technicians, pharmacists, and pharmacy owners. Informal learning is characterized by a four-step cycle including intent to learn, action, feedback, and reflection. This framework helps explain individual and organizational factors that influence learning processes within an organization as well as the individual and organizational outcomes of those learning processes. A case study of an Iowa independent community pharmacy with years of experience in offering patient care services was made. Nine semi-structured interviews with pharmacy personnel revealed initial evidence in support of the informal learning model in practice. Future research could investigate more fully the informal learning model in delivery of patient care services in community pharmacies.

Provider Visits for Asthma: Potential Barriers for Insured Children

OBJECTIVE

The barriers to provider visits for asthma in insured children are not well understood. Our objective was to examine the relationship between parent, family, and child attributes and asthma visits in insured children.

METHODS

This retrospective, cross-sectional analysis of 2007 Medical Expenditure Panel Survey-Household Component data included insured children 0-17 years old reported to have active asthma. We summed the number of provider visits during which asthma was treated or diagnosed to represent the frequency of asthma visits during the year. Probit models were used to estimate the relationship between parent, family, and child attributes and asthma visits.

RESULTS

Seventy percent of the 542 children did not have an asthma visit during the year. Children with parents employed full time were 16 percentage points less likely to have an asthma visit than children whose parents were not working (P=.01).

CONCLUSION

Many insured children go more than a year without seeing a provider for their asthma, signaling that insurance is not sufficient to guarantee children will receive asthma monitoring. The attributes related to asthma visits suggest potential barriers that providers might want to consider to increase participation in asthma visits.

Factors related to receipt of well-child visits in insured children

Our objective was to identify factors related to receipt of the recommended number of well-child visits in insured children. We hypothesized parent insurance status would be related to receipt of well-child visits, with those with uninsured parents more likely to have fewer visits than recommended. Data for the study came from the 2007 Medical Expenditure Panel Survey-Household Component. The sample included children <18 years of age with full-year insurance coverage and parents who were insured or uninsured the entire year. The outcome variable indicated whether children had received fewer than the recommended number of well-child visits in physician offices or outpatient departments. Parent, family, and child characteristics were measured. Forty-eight percent of the 4,650 children included in the study had fewer well-child visits than recommended. Children whose parents did not visit a physician during the year and children whose parents had not completed high school were more likely to miss recommended visits. Parent insurance status did not affect well-child visits. We identified child, family, and parent factors influencing well-child visits in insured children, including the parent's own use of physician visits. Contrary to our hypothesis, well-child visits were not influenced by parent insurance status. Determining which insured children are at greater risk of missing recommended well-child visits aids policymakers in identifying those who may benefit from interventions to improve use of preventive care.

Assessing changes in third-party gross margin for a single community pharmacy

OBJECTIVES To assess changes in prescription gross margin from 2008 to 2011 using a random sample of prescriptions, analyze changes in prescription gross margin from 2008 to 2011 using a market basket of prescription drugs, and investigate impact of changes in prescription mix from 2008 to 2011 on prescription gross margins. DESIGN Longitudinal, retrospective, descriptive case study. SETTING Single independent pharmacy in Iowa City, IA, from March and April of 2008-11. PARTICIPANTS Prescription dispensing records for the pharmacy's largest private and Part D payers by prescription volume, as well as Medicaid and cash payers. INTERVENTION Random sampling and market basket approaches were used for gross margin calculation. MAIN OUTCOME MEASURES Prescription gross margins and generic dispensing rate. RESULTS Data were collected for 2,400 prescription records for the random sample and 4,860 prescriptions for the market basket sample. The median random sample and market basket gross margin dollars (GMDs) from 2008 to 2011 decreased from $9.55 to $7.22 and from $9.60 to $8.50, respectively. The percent of dispensed prescriptions that was generic increased from 62.65% in 2008 to 73.64% in 2011, and GMDs were significantly lower for generic products. CONCLUSION Third-party prescription drug gross margins in the study pharmacy varied substantially by payer and decreased over time. Pharmacies must continue to monitor changes in prescription margins and investigate ways to enhance alternative revenue sources to maintain profitability.

Three-year financial analysis of pharmacy services at an independent community pharmacy

OBJECTIVE

To assess the financial performance of pharmacy services including vaccinations, cholesterol screenings, medication therapy management (MTM), adherence management services, employee health fairs, and compounding services provided by an independent community pharmacy.

METHODS

Three years (2008-10) of pharmacy records were examined to determine the total revenue and costs of each service. Costs included products, materials, labor, marketing, overhead, equipment, reference materials, and fax/phone usage. Costs were allocated to each service using accepted principles (e.g., time for labor). Depending on the service, the total revenue was calculated by multiplying the frequency of the service by the revenue per patient or by adding the total revenue received. A sensitivity analysis was conducted for the adherence management services to account for average dispensing net profit.

RESULTS

7 of 11 pharmacy services showed a net profit each year. Those services include influenza and herpes zoster immunization services, MTM, two adherence management services, employee health fairs, and prescription compounding services. The services that realized a net loss included the pneumococcal immunization service, cholesterol screenings, and two adherence management services. The sensitivity analysis showed that all adherence services had a net gain when average dispensing net profit was included.

CONCLUSION

Most of the pharmacist services had an annual positive net gain. It seems likely that these services can be sustained. Further cost management, such as reducing labor costs, could improve the viability of services with net losses. However, even with greater efficiency, external factors such as competition and reimbursement challenge the sustainability of these services.

Does bargaining affect Medicare prescription drug plan reimbursements to independent pharmacies?

OBJECTIVE

To examine how pharmacy bargaining activities affect reimbursement rates in Medicare Part D prescription drug plan (PDP) contracts, controlling for pharmacy quality attributes, market structures, and area socioeconomic status.

DESIGN

Cross-sectional study.

SETTING

Six Medicare regions throughout the United States between October and December 2009.

PARTICIPANTS

Random sample of 1,650 independent pharmacies; 321 returned surveys containing sufficient responses for analysis.

INTERVENTION

Pharmacies were surveyed regarding PDP reimbursement rates, costs, and cash prices of two popular prescription drugs (atorvastatin calcium [Lipitor-Pfizer] and lisinopril, 1-month supply of a common strength), as well as pharmacy bargaining activities and quality attributes. Data also were used from the National Council for Prescription Drug Programs pharmacy database, the 2000 U. S. Census, and the 2006 Economic Census on local market structures and area socio-economic status.

MAIN OUTCOME MEASURE

PDP reimbursement rates.

RESULTS

For the brand-name drug atorvastatin calcium, the PDP reimbursement was positively related to a pharmacy's request for a contract change (β = 0.887, P < 0.05), whereas other bargaining activities were not significantly related to PDP reimbursement. However, for the generic drug lisinopril, no bargaining activities were found to be significantly related to the PDP reimbursement.

CONCLUSION

Pharmacy request for a contract change was associated with higher reimbursement rates for the brand-name drug atorvastatin calcium in PDP contracts, after controlling for pharmacy quality attributes, local market structures, and area socioeconomic status; this finding likely applies to other brand-name drugs because of the structure of the contracts. Our results suggest that independent pharmacies are more likely to acquire higher reimbursement rates by engaging in active bargaining with third-party payers.

Effect of Medicare Part D and insurance type on Medicare beneficiary access to prescription medication and use of prescription cost-saving measures

OBJECTIVES

To examine how prescription drug access and use of prescription cost-saving measures changed after Medicare Part D was implemented and to determine their predictors in Medicare beneficiaries with different insurance types.

DESIGN

Repeated cross-sectional study.

SETTING

United States in 2005 and 2007.

PATIENTS

Medicare beneficiaries aged 65 years or older (n = 1,220 in 2005 and n = 1,024 in 2007).

INTERVENTION

Web-based surveys using nonprobability samples.

MAIN OUTCOME MEASURES

Access to prescription drugs and use of seven costsaving measures.

RESULTS

Significantly fewer participants stopped taking a prescription because of cost, applied to an assistance program, received free prescription samples, and had limited prescription access in 2007 compared with 2005. Use of cost-saving measures by Medicare Part D patients was more comparable with that by uninsured participants than patients with employer-based drug coverage. One-third of all participants and almost one-half of Medicare Part D participants had requested a less expensive prescription. Among those participants, 70% received a less expensive prescription and most thought it worked about the same as the more expensive prescription.

CONCLUSION

Prescription drug access and use of cost-saving measures improved somewhat following the implementation of Medicare Part D, but some access problems continued to exist for Part D participants. Requests for less expensive prescriptions were common and frequently resulted in satisfactory switches.

Racial variation in willingness to trade financial resources for life-prolonging cancer treatment

BACKGROUND

Minority patients receive more aggressive care at the end of life, but it is unclear whether this trend is consistent with their preferences. We compared the willingness to use personal financial resources to extend life among white, black, Hispanic, and Asian cancer patients.

METHODS

Patients with newly diagnosed lung or colorectal cancer participating in the Cancer Care Outcomes Research and Surveillance observational study were interviewed about myriad aspects of their care, including their willingness to expend personal financial resources to prolong life. We evaluated the association of race/ethnicity with preference for life-extending treatment controlling for clinical, sociodemographic, and psychosocial factors using logistic regression.

RESULTS

Among patients (N = 4214), 80% of blacks reported a willingness to spend all resources to extend life, versus 54% of whites, 69% of Hispanics, and 72% of Asians (P<.001). In multivariate analyses, blacks were more likely to opt for expending all financial resources to extend life than whites (odds ratio, 2.41; 95% confidence interval, 1.84-3.17; P < .001).

CONCLUSIONS

Black cancer patients are more willing to exhaust personal financial resources to extend life. Delivering quality cancer care requires an understanding of how these preferences impact cancer care and outcomes.

Patients' experiences with care for lung cancer and colorectal cancer: findings from the Cancer Care Outcomes Research and Surveillance Consortium

PURPOSE

To assess patients' experiences with cancer care, ratings of their quality of care, and correlates of these assessments.

PATIENTS AND METHODS

For 4,093 patients with lung cancer and 3,685 patients with colorectal cancer in multiple US regions and health care delivery systems, we conducted telephone surveys of patients or their surrogates in English, Spanish, or Chinese at 4 to 7 months after diagnosis. The surveys assessed ratings of the overall quality of cancer care and experiences with three domains of interpersonal care (physician communication, nursing care, and coordination and responsiveness of care).

RESULTS

English-speaking Asian/Pacific Islander patients and Chinese-speaking patients and those in worse health reported significantly worse adjusted experiences with all three domains of interpersonal care, whereas white, black, and Hispanic patients reported generally similar experiences with interpersonal care. The overall quality of cancer care was rated as excellent by 44.4% of patients with lung cancer and 53.0% of patients with colorectal cancer, and these ratings were most strongly correlated with positive experiences with coordination and responsiveness of care (Spearman rank coefficients of 0.49 and 0.42 for lung and colorectal cancer, respectively). After multivariate adjustment, excellent ratings were less common for each cancer among black patients, English-speaking Asian/Pacific Islander patients, Chinese-speaking patients, and patients reporting worse health status (all P ≤ .05).

CONCLUSION

Patients' reports and ratings of care differed significantly by race, language, and health status. Efforts to improve patients' experiences with cancer care should focus on problems affecting Asian and Pacific Islander patients and those in worse health.

Retail pharmacy market structure and insurer-independent pharmacy bargaining in the Medicare Part D era

OBJECTIVE

To examine whether local area pharmacy market structure influences contract terms between prescription drug plans (PDPs) and pharmacies under Part D.

DATA

Data were collected and compiled from four sources: a national mail survey to independent pharmacies, National Councilfor Prescription Drug Programs (NCPDP) Pharmacy database, 2000 U.S. Census data, and 2006 Economic Census data.

RESULTS

Reimbursements varied substantially across pharmacies. Reimbursement for 20mg Lipitor (30 tablets) ranged from $62.40 to $154.80, and for 10mg Lisinopril (30 tablets), it ranged from $1.05 to $18. For brand-name drug Lipitor, local area pharmacy ownership concentration had a consistent positive effect on pharmacy bargaining power across model specifications (estimates between 0.084 and 0.097), while local area per capita income had a consistent negative effect on pharmacy bargaining power across specifications(-0.149 to -0.153). Few statistically significant relationships were found for generic drug Lisinopril.

CONCLUSION

Significant variation exists in PDP reimbursement and pharmacy bargaining power with PDPs. Pharmacy bargaining power is negatively related to the competition level and the income level in the area. These relationships are stronger for brand name than for generics. As contract offers tend to be non-negotiable, variation in reimbursements and pharmacy bargaining power reflect differences in initial insurer contract offerings. Such observations fit Rubinstein's subgame perfect equilibrium model.

IMPLICATION

Our results suggest pharmacies at the most risk of closing due to low reimbursements are in areas with many competing pharmacies. This implies that closures related to Part D changes will have limited effect on Medicare beneficiaries' access to pharmacies.

Pharmacy students' knowledge of the Medicare drug benefit and intention to provide Medicare medication therapy management services

OBJECTIVES

To examine PharmD students' knowledge about Medicare Part D and their attitudes toward and intention to provide Medicare medication therapy management services (MTMS).

METHODS

Fourth-professional year students were given a self-administered survey instrument that assessed: (1) knowledge about Medicare Part D; (2) attitudes, perceived behavioral control, subjective norms, and intention to provide Medicare MTMS; and (3) demographic and experience information.

RESULTS

Ninety-five students responded for a response rate of 94%. Students showed good basic knowledge about Medicare Part D, with a mean score of 94%. Almost 60% of students agreed that they intended to provide Medicare MTMS, but agreement dropped to 37% when they were asked if they were willing to take initiative to provide MTMS.

CONCLUSIONS

The lack of willingness to take initiative to provide Medicare MTMS suggests that colleges and schools of pharmacy must strengthen efforts to encourage students to take on the role of service provider.

Prediction of pharmacist intention to provide Medicare medication therapy management services using the theory of planned behavior

BACKGROUND

Medicare Part D is a voluntary prescription drug benefit for Medicare beneficiaries. As part of the coverage, medication therapy management services (MTMS) are mandated for beneficiaries with chronic diseases who take multiple medications covered under part D and who are likely to incur annual costs that exceed a specified level.

OBJECTIVE

To predict the behavioral intention of pharmacists to provide Medicare medication therapy management services (MTMS) using the theory of planned behavior (TPB) and to determine the relationship between pharmacists' characteristics and intention to provide MTMS.

METHODS

The population for this cross-sectional descriptive study consisted of all community pharmacists in Iowa. Data collection occurred through a self-administered anonymous mail survey. Two surveys each were mailed to 500 pharmacies selected through a stratified random sample, 1 survey for the pharmacy manager and 1 survey for a staff pharmacist if applicable. Descriptive statistics and scale reliability were calculated for each of the 4 TPB scales (attitude, subjective norm, perceived behavioral control, and intention). Linear regression was used to predict intent as a function of the other 3 TPB factors, demographic factors, experience, and type of pharmacy.

RESULTS

Out of 212 surveys received, 203 had usable data. The usable response rate ranged from 21% to 41%. Pharmacists' intent to provide MTMS was generally positive but varied in strength with a mean score of 22.47 (+/-4.00) and a range of 7-30. Pharmacists mostly agreed that they had appropriate training to provide MTMS but lacked time and support. The linear regression analysis found the constructs of attitude, subjective norm, and perceived behavioral control to be significant predictors of intent (P<.05). Pharmacists with stronger intent to provide MTMS were those who felt they had more control over providing MTMS, felt their peers approved of the provision of MTMS, and had a positive attitude about providing MTMS. Type of pharmacy and pharmacist demographic variables were not significant predictors of intent to provide MTMS.

CONCLUSION

Pharmacists showed generally positive intent to provide MTMS. Perceived behavioral control, subjective norm, and attitude were significant predictors of intent (P<.05). Strategies to help pharmacists provide MTMS should focus on finding time and support to provide MTMS rather than individual educational needs.

Effect of local competition on the willingness of community pharmacies to supply medication therapy management services

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) provides a prescription drug benefit for Medicare-eligible seniors that includes access to medication therapy management services (MTMS) through pharmacists. We theorize that local community pharmacy market competition affects the decision of individual community pharmacies to provide MTMS. Our model suggests that MTMS services are more apt to be supplied in markets at the extremes of community pharmacy concentration (very low and very high). We found that local community pharmacy competition affected the service choices made by the pharmacy decision-makers willing to provide MTMS in a manner consistent with our theory. As a result, patient access to MTMS services depends on both (1) patient access to pharmacies willing to provide MTMS and (2) the level of local community pharmacy competition.