Shifting the Long-term Care Dynamic

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Denise Myshko

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Managed MARKETS

Big payer changes have been taking place in the long-term care arena as a result of the introduction of Medicare Part D. Before 2006, the pri marypayers in longtermcarewere the state Med icaid plans. Now, multiple payers are covering patients, and insurance companies in particular are taking a lead role through Medicare Part D’s prescription drug plans.This is having a significant impact on the market because insurance compa nies are more sophisticated buyers of drugs. But the longterm care community is also a highly complex and fragmented one. It has more resource constraints; it has more challenges in termsof thepatientsandemployees;and it has the widest range of care intervention requirements. The majority of longterm care patients are seniors, and the dynamics in this population are shifting.The senior population — people 65 years old or older — numbered 37.3 million in 2006, according to theAdministration onAging,Depart ment of Health and Human Services. This repre sents 12.4% of the U.S. population, about one in every eight Americans. By 2030, there will be about 71.5 million older people, more than twice the number in 2000. Overall demand for longterm care is expected to expandover thenext50years,as thenumberof U.S.residents older thanage85 — thosemost like ly to need longterm care — is projected to rise from 5.3 million in 2006 to 20.9 million in 2050, according toKnowledgeSource’s2007LongTerm Care Market Overview. “One of the things that differentiates long term care from communitybased care is the much larger number of prescriptions that a resi dent is taking,” says Alan Bronfein, senior VP of Remedi SeniorCare (formerly Woodhaven Health Services).“Our patients have a much higher acuity level with several comorbidities than do commu nitybased seniors.” THE PAYERS In the longterm care setting, reimbursement for prescription drugs depends on who the payer is at any given time. “The reality is that a single resident in a 30day period can fall into several different classes of payer,”Mr.Bronfein says. The largest group of patients, accounting for more than twothirds (67%), is nursing home resi dents who are dually eligible for Medicaid and Medicare,according toa recent reportby theLong Term Care Pharmacy Alliance (LTCPA).These dual eligibles are,under the provisions of the Medicare Modernization Act of 2003 (MMA), randomly assigned to prescription drug plans with premi ums at or below the regional benchmark. The next major payer is Medicare Part A,which is the Medicare reimbursement for an inpatient stay. Part A typically covers a nursing home resi dent for 100 days a year, during which time the facility does an assessment of that resident to determine what skill level of care is required.This determines the perday reimbursement rate to the nursing facility through what are called RUGS, resource utilization groupings.This is an allinclu sive rate — roomandboard,nursing care,all med ications,therapy,and anythingelse that is required during that stay — and experts say this segment represents about 25% of patients. “When patients are covered by Part A,the flow of reimbursement goes from Medicare to the nursing home; the nursing home takes a piece of the payment and reimburses the pharmacy,”says MichaelMahon,CEOofRemediSeniorCare.“When patients convert to Part D, we no longer bill the facility.” The impact of Part D has been profound, Mr. Bronfein says. “The nursing homepharmacy directly bills the Part D plan for those prescriptions,” Mr. Bronfein says. “The caveat is that there are prescriptions that, for a variety of reasons, are not covered and then the burden falls on the facility. With the Part D plan, there has been a considerable amount of cost shifting.” TRENDS IN LONGTERM CARE Residents of nursing facilities have,on average, six to 10 active medical problems and take nine or more prescription drugs,according to a survey by the American Medical Directors Association (AMDA). “In our space, clearly the big demand is for hematopoietic drugs, anemiatype drugs, beta blockers,proton pump inhibitors,statins,and high blood pressure drugs,”Mr.Bronfein says. There is a significant amount of time and resources put toward working with facilities to procure prior authorization to receive reimburse ment,Mr.Mahon says. The use of prior authorization is a significant issue in the longterm care setting, says Ross Mar tin, M.D., director of health information conver gence in the Global Healthcare and Life Sciences practice of BearingPoint. MEDICARE PART D HAS MADE THE REIMBURSEMENT OF PRESCRIPTION DRUGS MORE COMPLICATED IN THE LONGTERM CARE SETTING.THIS PRESENTS ANOPPORTUNITY FORPHARMACOMPANIESANDTHEIRREPSTOPROVIDEVALUETOTHISMARKET. BY DENISE MYSHKO 10 MOSTCOMMONLY PRESCRIBED DRUGS IN NURSING HOMES PRODUCT INDICATION Aricept Alzheimer’s disease Enbrel Rheumatoid arthritis Forteo Osteoporosis Lantus Diabetes Levaquin Infections Lovenox Prevention of blood clots Procrit Erythropoietin stimulation Pulmicort Obstructive pulmonary disease Zyprexa Psychosis Zyvox Resistant infections Source:LongTerm Care Pharmacy Alliance,Washington,D.C. For more information,visit ltcpa.org. MICHAEL MAHON REMEDI SENIORCARE As pharma companies evaluate their role in this spectrum of care, their ability to succeed in our sector is going to be directly proportionate to their ability to understand the regulatory requirements. ALANBRONFEIN REMEDI SENIORCARE Not all pharma companies have a senior care group. The problem is that sales reps know their drugs, but sometimes they don’t know our market. PV0608 Layout FINAL2 5/20/08 12:47 AM Page 84 85 PharmaVOICE J un e 200 8 Managed MARKETS nursing facility residents are proton pump inhibitors, which prevent and treat ulcers; pain medications;anderythropoietin,which treats ane mia. There have also been reports of difficulty obtaining drugs to treat high cholesterol andhigh blood pressure,as well as infections. Dr. Martin says electronic prescribing can be a vehicle for remedying the issues related to prior authorization in the longterm care setting. “Eprescribing is very much aligned with the flow of longterm care,” he says.“In essence in the nursing home, the physician is operating in a hos pital setting.There is generally onepharmacy con nected to the longterm care facility that provides the stock for that patient population.Those orders are managed at the facility rather than at the physician’s office. The process can be more effi cient and more fluid, but improvements can’t be made without proper information flow enabled by information technology.” Mr. Bronfein agrees that technology can play an important role in simplifying processes.He says RemediSeniorCare created aproduct called Auto matic Claims Management. “When we receive an order, we can automati cally fill in the authorization form as much as we are allowed to and send it out to the appropriate individuals with instructions,”he says Dr.Martin says because there is a central point of order entry and order processing in the long term care facility, pharma companies have an opportunity to promote adherence,which can be facilitated by technology solutions. “Compliance and adherence are incredibly important parts of reducing the total cost of care for the longterm care facility,”he says. ROLE OF PHARMA Given the obstacles reimbursement presents, pharma companies could play a role in providing longterm care facilities and the pharmacies with the support they need to manage the system more efficiently, Mr.Mahon says. “The ability of pharma companies to succeed in our sector is going to be directly proportionate to their ability to understand what the regulatory requirementsare,particularly asmoreandmoreof thepopulation shifts into these campustype facil ities,”he says. Mr.Mahon agrees that both clinically and eco nomically it wouldbe in the facilities’and theman ufacturers’ best interest to make the flow as easy and as seamless as possible. “We’re suggesting that pharma companies think through the different reimbursement steps,” he says. “Educating longterm care facilities and physicians is probably a more difficult process than in acute care.” Additionally, experts say pharmaceutical com paniesneed to domore to educate their sales reps about the longterm care market. “Not all the companies have a seniorcare group,” Mr. Bronfein says. “The problem is that while reps know their drugs, they don’t know our market. They need to be better educated about the reimbursement process associated with long term care facilities.” Being acquainted with and understanding the basics of reimbursement in longterm care are important, agrees Amy Smith, account director at HC&BHealthcare Communications. “It’s important for sales reps to think about who theyare selling to;their audiencesarenot just prescribers and patients,but also influencers such as case managers and consultative pharmacists who are involved in patient clinical planning with in these facilities,” she says. “Most large pharma ceutical companies train their field reps on the clinical aspects, but it’s critical for reps to be capa ble of having an economic value or reimburse ment dialogue with organizations. “What’s important for pharmaceutical reps to remember is to use the selling opportunity to talk about reimbursementrelated issues: the financial opportunity as well as the clinical opportunity of the drug,”Ms.Smith adds.# PharmaVOICE welcomes comments about this article.Email us at feedback@pharmavoice.com. “Just like in the retail space,it’s important to get prior authorization for approval of a drug if the drug is in a certain category,”he says.“The catego ry might be one that is dominated by highcost drugs or one that is prone to abuse, such as pain medications, or one for which some of the drugs’ indications are covered and some are not.” Dr. Martin says prior authorization is a form of decision support that focuses onbenefit coverage. “Longterm care facilities want to make sure that the doctors who are prescribing the medica tions are checking the boxes,so to speak,”he says. “But prior authorization is an administrative bur den for physicians. Because of this barrier, physi cians will sometimes prescribe a medication that is less than optimal in order to avoid the hassle of prior authorization.” According to the 2006 AMDA survey, almost twothirds (64%) of physicians indicated that they had trouble obtaining drugs for longterm care patients because of requirements for prior autho rization of drugs.The area of dementia poses the largest difficulty in obtaining certain drugs;28%of physicians reported problems primarily because of requirements for prior authorization. Other drugs that have proven challenging to obtain for ALANBRONFEIN. Senior VP, Remedi SeniorCare (formerly Woodhaven Health Services), Baltimore; Remedi SeniorCare provides institutional pharmaceutical, clinical, and information services to the longterm care community.For more information, visit remedirx.com. MICHAEL MAHON. CEO,Remedi Experts on this topic SeniorCare (formerly Woodhaven Health Services), Baltimore; Remedi SeniorCare provides institutional pharmaceutical,clinical, and information services to the longterm care community.For more information, visit remedirx.com. ROSS MARTIN,M.D.,M.H.A.Director,Health Information Convergence,Global Healthcare and Life Sciences Practice, BearingPoint Inc., McLean,Va.; BearingPoint is a global management and technology consulting company.For more information, visit bearingpoint.com. AMY SMITH.Account Director, HC&B Healthcare Communications,Austin,Texas; HC&B is a healthcare communications agency.For more information, visit hcbhealth.com. DR.ROSS MARTIN BEARING POINT Prior authorization is not going to go away. We have to transform the process into a decision support function whereby the clinical rules for deciding who gets what drug are not made independently by the payers. AMY SMITH HC&BHEALTHCARE It’s important for sales reps have to have a basic understanding of the reimbursement structure within longterm care. But to ensure success, companies should have a core group of people who can engage in this specific selling dialogue. PV0608 Layout FINAL2 5/20/08 12:47 AM Page 85

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