In-office dispensing improves medication adherence, may boost revenue

Patient noncompliance with prescriptions and, in some cases, the substitution of generic drugs for name brands can result in adverse events, poor outcomes and increased physician liability. Compliance and frequent follow-up are particularly critical in the treatment of glaucoma, retinal disease and ocular surface disease.

Some practices have adopted in-office dispensing. Although in-office dispensing has gained popularity in primary care, cardiology, orthopedics, dermatology and other specialties, it is not widely used in ophthalmology, according to some experts.

Proponents say that in-house dispensing can help practices improve compliance and patient care and provide steady, reliable revenue.

“It can be a boost for the practice,” Walter Hoff, CEO of A-S Medication Solutions, said. “There’s a retention benefit because the patients like the convenience of getting their meds right then and there.”

EyeScripts Dispensing, a leading provider of point-of-care dispensing designed exclusively for ophthalmologists, is the ophthalmic marketing arm of A-S Medication Solutions, a national provider of medication dispensing services.

EyeScripts Dispensing co-founders Mitchell A. Jackson, MD, and Pamela Willis said in-house dispensing advances patient care by helping patients get the exact drug that was prescribed by their physician.

“The big thing is better patient care,” Jackson said. “It is unbelievable how, nowadays, the patient can’t even get what the doctor prescribed. In some extreme cases, I’ll prescribe a brand steroid and the [patient] will get a generic nonsteroidal anti-inflammatory, not even the same class of drugs. It’s pretty scary.”

The physician is best qualified to oversee all aspects of patient care, including medication selection and dosing, Willis said.

“The doctors are the ones with the complete facts, and therefore, they’re the best advocates for the patient,” she said.

Enhanced patient care and good practice, not additional revenue, are the main advantages of in-office dispensing, according to Gerry Kress, consultant for EyeScripts Dispensing. Furthermore, in-office dispensing may reduce physician liability related to poor compliance and subsequent adverse outcomes.

A practice that decides to try in-office dispensing should base its decision on potential benefits to patients, Eric D. Donnenfeld, MD, OSN Cornea/External Disease Board Member, said.

“If it’s good for the patient, then it’s a very reasonable thing to do. There’s always the possibility of misuse with in-office prescribing. There’s also greater opportunity to benefit patients,” Donnenfeld said.

Laurie K. Brown, COMT, COE, OSA, OCS, CPSS, practice administrator for Drs. Fine, Hoffman & Sims, described in-office dispensing as a potential way to maximize resources and boost the bottom line for practices that adopt it.

“If practices have underutilized staffing and space resources, then it may make sense,” Brown said. “Additions to the bottom line when you have resources you’re not currently using efficiently can be advantageous.”

Guidelines and regulations

EyeScripts Dispensing handles the credentialing of doctors with the insurance carriers for dispensing reimbursements and managed care costs, according to Jackson.

The EyeScripts program also includes customer service support, training of staff and marketing support for integration, he said. The credentialing process can take up to 8 weeks and involves submitting basic federal and state paperwork, as well as registration with third-party payers.

Preparing the initial paperwork takes about 30 minutes and is simple, according to Jackson. It requires documents that a practice already has on hand, such as a DEA registration form, state licensure and state narcotics form. The registration and credentialing process also requires physician practices to comply with federal fraud, waste and abuse regulations, including a 1-hour online Medicare fraud and abuse course, he said.

There are nuances as to which patients can use the dispensary, according to Jackson. For example, he said that dispensing to Medicaid patients may not be reimbursed in all 50 states but is generally permitted for Medicare patients.

“We can submit claims to most private payers, but there are exceptions,” he said. “We are not reimbursed by Cigna or for some Blue Cross patients in Illinois. Further, every state has their minor differences.”

Most states permit in-office dispensing, with a few having certain prohibitions or restrictions. However, with changes made by the Affordable Care Act, Jackson sees in-office dispensing as a future money saver and expects more states to lessen restrictions on the practice.

AMA position

In 1999, the American Medical Association issued an AMA Code of Medical Ethics opinion and guidelines on prescribing and dispensing drugs and devices.

The document stated that physicians should prescribe drugs, devices and other treatments “based solely upon medical considerations and patient need and reasonable expectation of the effectiveness of the drug, device or other treatment for the particular patient.”

The AMA stated that physicians “may not accept any kind of payment or compensation from a drug company or device manufacturer for prescribing its products.” It stipulated that physicians may dispense drugs within their office practices “provided such dispensing primarily benefits the patient.”

The document said that physicians “should respect the patient’s freedom of choice in selecting who will fill their prescriptions as they are in the choice of physician and, therefore, have the right to have a prescription filled wherever they wish.”

Return on investment

In-office dispensing can add revenue from an average of $5 to $10 per script, based on a minimum of 8,000 scripts dispensed per year, according to Jackson.

“It is not meant to be a windfall to the practice; it is just a value-added service to the patient that can also provide additional income stream to the practice,” he said.

In-office dispensing can help some practices offset decreasing government reimbursements and increasing costs, some experts said.

“Every practice that’s considering [in-office dispensing] should explore the cost of starting such a program and the potential benefit to the practice in addition to the benefit to the patient,” Donnenfeld said. Providing a significant benefit to the patient helps grow the practice as well as serve the patient, he said.

Practices that have or are considering ancillary services such as in-office dispensing, hearing services or optical retail sales should take a hard look at their business plan and financial bottom line, Brown said.

“We all need to make sure that we’re getting a lot of bang for our buck with the constraints in reimbursement,” she said. “Wasting of resources is not something any of us can afford. So, practices need to make these decisions by evaluating opportunities and alignment with their strategic plan. Will the services complement or detract from their core business? In my practice situation, adding pharmacy services is not something of value at this time.”

“Physicians look at this as a win from a financial standpoint,” Kress said. “They’re not going to make a fortune on prescribing drugs. Drug stores don’t make a fortune on dispensing drugs. Now, there will be a revenue stream to the physician, which would help solidify the physician’s practice based on what’s going on in health care. Reimbursements are being cut.”

Making the jump to in-office dispensing requires a small but worthwhile investment, Jackson said.

“There’s a little increased overhead but not much. You need to cross-train a couple of your staff members. Well-trained staff can fill well over 100 scripts per day. We have practices coming onboard that have 25 or 30 doctors that can fill that many,” he said.

EyeScripts supplies eye medications to ophthalmologists directly, Willis said. Manufacturers support the dispensing program, she said.

“In a world where ophthalmologists want brands, we figured out how to make brands accessible in a space where they weren’t in the past,” she said.

Compliance and satisfaction

Noncompliance is problematic in all medical specialties, including ophthalmology. In-office dispensing may not add much to a practice’s bottom line, but it ensures that patients get their medications, Jackson said.

“There’s up to 34% noncompliance in medicine overall, not just ophthalmology. You can do cataract surgery, LASIK surgery or corneal transplant surgery, but you’ll never know if the patient bought the drops,” he said.

Kress said that 20% to 25% of patients do not fill their initial prescriptions, and up to 70% of patients do not refill their prescriptions in the first 60 to 90 days after receiving them. Reminding patients to fill or refill prescriptions can significantly improve compliance, he said.

“Psychologically, getting a message from your physician, whether it be a phone call from the physician’s office or a letter with the physician’s name on it, has a much stronger impact on the patient than a letter or a phone call from an unknown at a pharmacy,” Kress said. “For one reason, the doctor knows whether or not the patient is fulfilling the script. For another, the patient really doesn’t want their doctor to know that they’re not being compliant because that patient has to go back to the doctor, eventually.”

Reminders have been shown to reduce the 20% to 25% no-fill rate to 7% to 10% and the no-refill rate from about 70% to about 35%, Kress said.

“The patient stays on the meds and stays healthy. The doctor knows that the patient is being compliant and can monitor the patient’s activities. Even employers and insurance companies benefit because there are better outcomes and less cost. There’s no downside. Everybody benefits,” Kress said.

In-office dispensing can also enhance patient satisfaction and patient education, Donnenfeld said.

“This is not going to be a major advantage to the patient, but it’s one of those things that certain patients will appreciate. That’s the real benefit,” he said. “They can be educated about the medications that they’re using. As long as the fee for the medication is reasonable, I think that it’s very reasonable for the provider to provide the service.”

Name brands vs. generics

Pharmacists sometimes substitute generic drugs for name brands, which can cause adverse events and increase liability for physicians, Jackson said.

“It can be harmful to the ocular surface. You can’t sue a generic company. So, typically, the patient won’t sue the pharmacist associated with a large retail chain. They’ll just go back and sue the doctor for an adverse event from a medication that was not prescribed from the doctor in the first place,” Jackson said.

Donnenfeld said that while most pharmacies practice ethical standards, some switch from name brands to generic medications to boost their profit margins.

“I have no problem with patients receiving generic medications,” Donnenfeld said. “I’m actually in favor of that in many cases. But the patient should have informed consent, knowing the risks and benefits of moving from a premium product to a generic. As long as they’re given that informed consent, I’m very supportive of patients having the right to choose which medications they want to put in their own eyes.”

When necessary, the physician tells the patient a name-brand drug is preferable to a generic, Brown said.

“I think when a physician feels like a name brand is very important, they’ll have that conversation and the patient needs to be their own advocate in that regard because everything in the system is designed to steer the patient toward the most cost-effective option, without hearing from the doctor whether that makes a difference or not,” she said.

In some states, the pharmacist has the right to substitute without communication, she said.

EyeScripts Dispensing provides a wide selection of both name-brand and generic drugs to physicians, so they can base their decisions on what is right for an individual patient, Hoff said.

“We don’t steer it one way or the other. It’s the physician’s choice,” he said.

EHRs in prescribing, dispensing

Electronic prescribing, or e-prescribing, is done through an electronic health record system. Although e-prescribing is completely different from dispensing, an EHR can be used to facilitate in-office dispensing, Jackson said.

Because his practice is designated as an approved dispensary in Illinois, Jacksoneye is listed with other pharmacies in the drop-down list in the EHR system, according to Jackson.

“[The script] is sent via an electronic fax to our dispensary in my office,” he said.

In-office dispensing through EyeScripts allows for adjudication of the prescription claim, no different from retail pharmacy chains, Jackson said.

“The patient gets the box containing the bottle of eye drops, and it looks no different than what they get at a retail pharmacy, with the label, the bag, everything,” Jackson said.

Brown said that using an e-prescribing system for in-office dispensing may not be efficient for all practices.

“You’re potentially reducing the benefits of the e-prescribing system because a pharmacist is not involved to make his end of the work for the patient go smoothly. We believe in specialists as an ophthalmology practice, and we do not specialize in providing pharmacy services,” she said. “If we were selling in our office and not actually utilizing the pharmacist’s services, a piece of the puzzle would be missing. It would be just you, the formulary and the billing.” – by Matt Hasson

Is in-office dispensing worth the extra effort in terms of increasing revenues and/or improving patient care?

Investigate before setting up in-office pharmacy

One of the great things about ophthalmology is the inventiveness and exploratory spirit of its practitioners and business leaders. As a result, whenever you are considering launching a new ancillary service for your patients, you can find out pretty fast how well it works in other settings before risking your own time and capital.

Some ancillaries, notably private ambulatory surgery centers and optical dispensaries, are generally a drop-dead cinch. A majority of ophthalmology practices now dispense glasses, and most high-volume surgeons have developed their own ASCs. Other ancillaries, such as hearing aid dispensaries, are not home runs but constitute decent base hits if well organized and operated.

However, despite many bully efforts, there is a third class of ancillaries that has chronically failed to launch. In this class we can include vitamins, facial skin resurfacing, hair removal and prescription drug dispensing.

There are lots of vanguard things that crop up in eye care, new procedures, new devices, that seem to be intuitively correct but fail when tried. Before launching into drug dispensing with any syndication companies offering to set up an in-office pharmacy for you, speak with a couple of their long-term ophthalmic customers first.

John B. Pinto is the OSN Practice Management Section Editor. Disclosure: Pinto has no relevant financial disclosures.

Weigh clinical benefits and regulatory hurdles

Point-of-care medication dispensing from the physician directly to the patient is increasing and can lead to improved access to prescribed medications, patient convenience, increased patient compliance and greater control of name-brand vs. generic drug substitutions.

Before implementing a point-of-care medication dispensing program, physicians should carefully check their state’s Board of Pharmacy and Board of Medicine regulations. In some states, a license is required for physicians to dispense drugs. Others, such as Virginia, have different license types that authorize varying levels of dispensing activities, supervision of non-physician personnel and recordkeeping. Oregon requires a “dispensing physician” register with its Board of Medicine before dispensing medications to patients.

Physician dispensing creates a potential conflict of interest when the physician who prescribes the medication is also the one who selects the brand of drug dispensed and, as a result, the profitability of the sale. Patient safety can be compromised when the prescribing physician delegates the prescription dispensing and patient consultation activities to office staff who have no formal training in detecting medication errors and drug interactions.

Thus, a successful physician dispensing program must include adequate checks and balances and procedures to prevent medication errors and assure that patients receive the same standard of care and medication information as they would receive from their own pharmacist.

Barbara S. Fant, PharmD, is president and CEO of Clinical Research Consultants Inc., Cincinnati. Disclosure: Fant has no relevant financial disclosures.