Nine tips for becoming a home or alternate site infusion pharmacy
As healthcare reform is implemented, a heightened emphasis on cost-containment is putting pressure on all healthcare providers. As hospitals determine how to reduce readmission rates and shift care to lower-cost providers, the alternate site infusion therapy sector will become even more important as a post-discharge option for patients.
Several trends suggest that home infusion therapy may become more mainstream in the future, representing new revenue stream opportunities for alternate site pharmacies, and creating a win-win-win situation for patients, hospitals and payers. For many patients, when it's clinically appropriate, home is often the most convenient and comfortable setting to receive their IV therapies. For hospitals, patient safety and preventing hospital-acquired infections are critical, as these infections result in direct costs to hospitals of $28 to $45 billion a year and approximately 100,000 patient deaths annually.1 For payers, delivery of infusion therapy at an alternate site could cut treatment costs by up to 60% compared to treatment at a hospital setting.2
If you're considering adding infusion therapy to your pharmacy business, I have tips:
- Get connected.
Immerse yourself in the infusion community. The National Home Infusion Association (NHIA) site has a wealth of resources, networking forums and educational opportunities.
- Establish your patient base.
Leverage your relationships with skilled nursing or assisted-living facilities for referrals. In addition, consider:
a) Affiliations, such as an arrangement with a hospital or home health care agency.
b) Physician Clinical Agreements, as some specialty clinics may not have an infusion component.
c) Pharmacy Benefit Manager: Become an approved home infusion pharmacy to gain access to their patients.
- Determine your area of expertise.
Determine what combination of drugs you can support. Traditional infusion therapies such as intravenous antibiotics usually treat shorter-term/acute patient conditions, while specialty infusion therapies are more expensive, longer-term drug therapies to address chronic conditions. What therapies you decide to offer will influence the equipment investment required (i.e. pumps, gravity tubings, syringes, elastomerics, and a cleanroom hood).
- Anticipate the investment.
Financial planning and due diligence are critically important. A good benchmark is usually $250,000 to $350,000 to invest in home infusion pharmacy services, and it can take one to two years to make back the investment. A financial advisor can help you work through the numbers.
- Understand the reimbursement environment.
For any home infusion provider to succeed, adequate reimbursement is critical. The payers will be a combination of Medicare, Medicaid, commercial and private pay. The single-largest revenue source for home infusion providers is specialty pharmacy drugs paid for by commercial health plans, which represents nearly $1.4 billion in annual revenue nationally. Self-paying patients represent the smallest revenue stream at $59 million.3
Medicare can be particularly complicated in this space: While the drugs themselves are covered, home infusion equipment, supplies and services are not. These uncovered expenses make up about 50% to 60% of the cost of a home infusion, according to the NHIA.4 Furthermore, due to changing reimbursement rates and tier status for many therapies, and some instances of insurers dropping coverage of certain therapies altogether, pharmacies must pay close attention to revenue cycle management including insurance verification for each infusion referral, billing and collections. Also keep in mind, home infusion is typically billed via medical claims, and the claims include multiple different codes. Having a reimbursement specialist on staff with infusion expertise can help maximize your profitability.
- Staff up.
Consider your overall staffing needs and the skill sets you may require, including a pharmacist, pharmacy tech, nurse, reimbursement specialist, inventory manager, drivers, and sales team (with infusion background and experience).
- Partner with a GPO.
To obtain access to the products you need, find the right GPO that fits your business model (i.e. Armada, Innovatix, Managed Health Care Association (MHA), Tempest Med or Provista).
- Ensure proper accreditation.
Participation with Medicare, PBMs and many healthcare payers requires home health pharmacy services accreditation. Establishing your pharmacy as accredited also adds credibility, which can increase referrals, enhance your competitive edge, as well as strengthen patient confidence and trust that they are receiving safe, high-quality care. Common accrediting bodies include the Accreditation Commission for Health Care (ACHC), The Joint Commission (JCAHO), and the Community Health Accreditation Program (CHAP).
- Step up your sales and marketing.
Expect to make an investment in sales and marketing to establish a patient base for your infusion pharmacy. The first step is to generate awareness that you're adding this service. Build your referral network with targeted outreach to clinics, hospitals and other care facilities, highlighting the differentiated value you bring to this market and to the patients you'll serve.
Rob Cannon is a senior manager at McKesson Alternate Site Pharmacy Solutions. He has been involved in the field of alternate site pharmacy for over 24 years in various capacities from the pharmaceutical, medical, distribution, GPO and wholesale sides of the business.
1Centers for Disease Control. Scott, R.D. “The direct medical costs of healthcare-associated infections in U.S. hospitals and the benefits of prevention.” March 2009.
2 HealthTech Zone.com. “Medical specialties distributors acquisition capitalizes on growing infusion market.” June 13, 2013.
3PharmaceuticalCommerce.com. Basta, N. “The shape of the home infusion industry.” January 11, 2012.
4PharmaceuticalCommerce.com. Anthony, L. “Home infusion enhances specialty pharmaceutical distribution.” July 2012.