Case Studies

Revenue Cycle – Billing Yield

Problem

PCI was asked to review potential for revenue enhancement and charge master accuracy. Errors of this type can be difficult to identify and can be the result of a breakdown in any of the multiple systems, processes and departments needed to build charge systems, document utilization, and generate billing.

PCI Solution

PCI performed a billing yield analysis that compares units charged to units purchased to identify gaps.  PCI used pharmacy purchase data, CDM and charge histories reports to perform this analysis.  Gaps in units charged to units purchased may be related to non-billed charges, problems in CDM/EHR setup, wastage, or excessive inventory.  PCI worked with pharmacy and other department leaders ensure drug cost, drug coding, and billing units were accurately integrated into the CDM and EHR.

Results

PCI identified two drugs that were not being billed properly due to a conversion error between the units billed and the units purchased.  Working with pharmacy leadership, billing units were corrected, patient claims were back billed appropriately, and a process was put into place to regularly review billing units within the system.  Two billing unit corrections from PCI provided an annual increase in charges of $6.8M.

Drug Utilization

Problem

A large academic medical center needed to urgently reduce expenses and mandated a significant contribution from the pharmacy budget.

PCI Solution

PCI compared acuity and volume adjusted purchase data against PCI’s BenchmaRx™ drug utilization data to identify outliers. PCI conducted on-site interviews, reviewed policy and procedures and evaluated current guidelines and restrictions to validate which outliers were opportunities for savings.  Evidence based literature was used to obtain buy-in by key medical staff and executive leadership.  Once buy-in was confirmed, clear guideline and utilization controls were created for approval by the P&T committee.

Results

Updated guidelines and medical staff-supported restrictions were approved by the P&T committee and were implemented with assistance from key medical staff. The hospital improved inpatient use of albumin, IVIG, IV acetaminophen, thymoglobulin and ophthalmic products providing a cost savings of more than $2M.

Contract Pharmacy Program

Problem

A mid-sized DSH hospital, already enrolled in the 340B drug pricing program, experienced deficiencies surrounding their contract pharmacy strategy.   A new approach that would identify potential contract pharmacy partners, assist in the development of contract pharmacy agreements and quantify their associated benefit was essential.

PCI Solution

Analyzing existing data, PCI identified potential pharmacy partners, quantified the potential benefit, and optimized their overall contract pharmacy program. PCI assisted with developing contract pharmacy agreements for an independent pharmacy and two chain pharmacies (which included 6 local stores and multiple specialty pharmacies).  Two third-party administrators were also implemented to assist with compliance with HRSA regulations.

Results

Contract pharmacies provide the organization with an annual benefit of approximately $800K. Dedicated personnel are in place to ensure ongoing compliance, while maximizing benefit.

Biosimilars

Problem

A small hospital was looking to evaluate biosimilar benefit in their infusion center. While the pharmacy was aware of biosimilars, they had not quantified the financial benefit of their use compared to the reference product, or alternative biosimilars. There was low biosimilar conversion due to provider preference, unclear financial implications, and varying payer requirements. Biosimilar conversion also required process changes in work flow, order sets, drug file updates, and billing setup.

PCI Solution

PCI assessed the purchase data for a hospital outpatient infusion center client and found that they had not maximized biosimilar conversion. A fully margin analysis was performed to understand the optimal biosimilar for each group of reference drugs. The analysis quantified the potential opportunity for conversion. PCI worked with key stakeholders in provider groups, managed care contracting, IT and benefit assistance to create processes to drive biosimilar utilization when appropriate.

Result

PCI helped implement the required process changes to drive the monthly biosimilar utilization rate to as high as 65%. PCI was able to generate > $330K in financial benefit for biosimilar conversions across a 12-month period.

Maximizing 340B Benefit

Problem

An organization engaged PCI to identify opportunities to optimize their 340B Program. Challenges existed surrounding the maintenance and monitoring of the split-billing software, site of care establishment, and purchasing practices at a large academic medical center.

PCI Solution

An analysis of the health systems purchases by class of trade as well as detailed interviews were used to identify gaps in their 340B process. PCI created actionable recommendations for eleven products that could be purchased on the GPO or 340B accounts.  PCI developed an action plan for appropriate maintenance of spit-billing software, and continuous monitoring of WAC purchases to ensure maximal 340B benefit.  These changes were made while maintaining compliance with HRSA regulations.

Results

Software corrections, site of care changes, and staff education to improve purchasing practices decreased WAC purchases for the targeted products and provided a cost savings of more than $550K to the organization without increasing compliance risk. The organization implemented ongoing strategies of routine monitoring of software and WAC purchases that continue to maximize 340B benefit.

Ambulatory Pharmacy

Problem

A multi-hospital health system was considering establishing a specialty pharmacy and meds to beds program, but was unsure of the cost or potential financial benefit. Health systems are more frequently investigating the development of ambulatory pharmacies to improve patient access, provide specialty medications, and provide meds-to beds program. Hospital pharmacy leaders may not have experience opening “retail” pharmacies and experience in determining the potential financial benefit.

PCI Solution

At a multi-hospital health system, PCI developed pro-forma for implementation of retail pharmacies for each of the facilities, opening a specialty pharmacy, and expanding employee capture rate in their existing employee pharmacy. Working with pharmacy and facility leaders, PCI conducted site visits, space evaluation, assisted in the design of each facility, evaluated IT needs, and performed project management.  Focus sessions with key stakeholders at each facility (nursing, medical, case management, pharmacy) were also performed to ensure success of the Meds-to-Beds program.

Results

The health system successfully opened several strategically located retail pharmacies and one specialty pharmacy for a 6- hospital system while working with human resources to expand employee capture. One of the locations provided employee pharmacy services, specialty services, as well as the meds-to-beds program.  The estimated annual margin was projected to be >$2M.

Integrated Delivery Network-System Organizational Structure

Problem

Executive leadership of a newly formed health system was in the process of merging two multi-hospital entities and asked for assistance with transitioning pharmacy under a single management structure. The merged entities each had their own culture, leadership structures, formularies, EMRs, automation, and distribution models.  Senior hospital leadership of the merged entity requested input on best industry practice for pharmacy leadership and organizational structure while considering each hospital’s specific pharmacy needs.

PCI Solution

PCI performed site visits, conducted a cultural assessment and developed an inventory of services, personnel, automation, and processes at each organization. Pharmacy and executive leaders were interviewed to determine a system structure and roadmap for implementation that would best align with the vision, mission, and culture of each system.

Results

PCI vetted findings with the pharmacy teams and presented a comprehensive report with recommendations to executive leadership, all which were well received. Hospital executive leadership supported the recommendations and began implementation immediately. PCI has continued to provide input into transitioning to the new leadership structure.

Services

Controlled Substances Management

Pharmacy Strategy for Integrated Delivery Networks

Specialty, Retail and Ambulatory Pharmacy Programs

Drug Cost, Utilization and Revenue

Sterile Products Regulatory Compliance (USP <797>, <800>)

Pharmacy Operations

Legal and Litigation Support

Compliance

Pharmacy Technology

Infusion and Cancer Centers