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Chapter 2: Planning and Steps to Building the Ambulatory Practice Model
Web case: Medication Therapy Management Service
Your organization is a multi-site health system with several hospitals, a community physician division,
and a home health group. You are the clinical manager in a Department of Pharmacy and have served in
this position for 7 years. Your pharmacy services span the organization from the inpatient distribution and
clinical care to the outpatient pharmacy services. You have 50 FTE pharmacists and 40 FTE support staff
and administrative assistants.
Dr. Busybee, a local community physician, would like you to provide services in his office. You are
uncertain how your current hospital clinical practice model compares to a community outpatient
environment. During your needs assessment of his practice, you determine that he is at risk for losing his
performance-based contract with his largest insurer based on poor performance on key disease
management indicators: achievement of goal hemoglobin A1C values in diabetes and INR values in target
for patients on warfarin anticoagulation. You reside in Maryland, and the first step is to understand the
rules and regulations regarding pharmacist practice. You contact your state’s board of pharmacy and state
pharmacy organizations, and they provide detailed information on current laws and regulations. You
discover that in Maryland, HB781 “Physicians and Pharmacists: Therapy Management Contracts” passed
in 2002 and the regulations were finalized in 2004. In the community setting, HB781 states that a CDTM
protocol, approved by both parties, may authorize the pharmacist to modify, continue, and discontinue
drug therapy through written disease specific protocols. Additionally, the patient must sign the protocol
approving the pharmacist’s involvement as part of the team on a yearly basis. This law exempts
institutional facilities from the collaborative practice restrictions, which means your new community
practice will need to meet the HB781 requirements and that pharmacists will not be permitted to initiate
drug therapy.
On further discussion with the practice administrator, you note that their staff is uncomfortable with
caring for patients on insulin and warfarin therapies due to the complexity. In evaluating potential service
delivery models, you determine that an integrated service makes the most sense based on the fact that
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you have access to the documentation without having to purchase or build your own system;
you will be located within the office with direct lines of communication with the providers for
real-time decisions; and
due to working in the physician office, you avoid any renovation to retrofit your current
pharmacy space for the new task of running a direct patient care service.
Dr. Busybee produces a medication use report from his prescription service to address the question of
patient volume. The report indicates there are currently 15 patients on insulin therapy, 45 patients on
other diabetic/hypoglycemic medications, and 35 patients on warfarin. Based on your discussions with
other external pharmacy providers caring for similar patients and with input from Dr. Busybee on the
general complexity of his patients, you determine that visit lengths will be 40 minutes for new patients
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and 20 minutes for established patients. At a minimum, you expect to see your established AC patient
monthly and your established diabetic patients every 3 months. With Dr. Busybee’s input, you estimate
20−30% of patients will have more frequent visits. Additionally, Dr. Busybee notes that he has an overall
65% show rate for patients in his practice.
You need to determine the direct-care pharmacist staffing needs for this new service. You use a resource
needs worksheet to help with this task for the 95 patients that will use your new service. Since all the
patients have been receiving care in the system, you set out to determine the maintenance level of staffing
needed to care for the patients with no adjustments for new visits. You will use 20-minute visit duration
for each patient to determine minimum needs. You walk through these steps:
Determining # of monthly visits:
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60 patients with diabetes
80% will have routine visits every 3 months = 48 patients every 3 months or an average of 16
patient visits per month
20% will need more frequent visits; we will use monthly for our estimate = 12 patient visits every
month
35 patients on warfarin
80% will have a routine visit every 1 month = 28 patient visits per month
20% will need more frequent visits; we will use every 2 weeks for our estimate = 14 visits per
month
Total monthly visits = 70 (28 for diabetes and 44 for anticoagulation)
Determining monthly staffing needs:
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Scheduling must account for “no shows” and rescheduling of patients. The visit completion rate
is 65%.
70 visits/month x 1.35 “no show” correction = 94 visit slots estimated to meet demand
94 visits x 20 min/visit x 1 hr/60 min = 31.3 hours staffing/month
Corrections need to be made to account for…
Documentation time of 10 minutes per completed visit
70 completed visits/month x 15 min x 1 hr/60 min= 17.5 hours
Total direct care time = 31.3 + 17.5 = 48.8 hours
Non-productive time adjustments are 10 – 20 % of time
48.8 hours direct care x 1.15 (15% increase) = 56.12 hours
Direct-care pharmacist staffing needs are roughly 56 hours per month or roughly 14 hours per
week.
FTE = 14 hours/week x 1 FTE/40 hours = 0.35 FTE need
Staffing needs are 0.35 FTE. Now you can determine the best way to schedule the pharmacists based on
current resources and availability.
Based on your staffing estimates for pharmacists, you sit down with your department’s pharmacy
manager and Dr. Busybee’s practice administrator. You learn that Tuesday and Thursday mornings and
Wednesday afternoon would be the only times when there is an open office with exam rooms in the
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practice. There are no current plans to hire a new provider or expand current work flow. Additionally, the
medical assistants are working on other projects during those times, but can cross cover to assist with
collecting vital signs for your patients. A discussion with your pharmacy manager reveals that two
pharmacists have been expressing interests in expanding their patient care time and also have training
well-aligned with your service. From these discussions you choose to provide services on Tuesday
morning and Wednesday afternoon. These 2 half-days (8 hours) of staffing support provide a good
portion of the 14 hours estimated in your direct care staffing needs assessment.
Financial discussions with Dr. Busybee identify several options to support the pharmacy service. First,
you have the option to bill “incident-to” his practice and generate direct reimbursement. Next you
consider their potential financial risk and the specific dollar amount associated with loss of their
performance-based payer contract. Finally, you calculate the potential increase in revenue based on
increased efficiencies for the physician (e.g., less time per appointment as pharmacists handle medicationrelated issues) and the potential for new patients (e.g., with potentially higher reimbursement levels).
You have already identified and engaged some of your stakeholders. Dr. Busybee, a key stakeholder, is
very interested and convinced of the potential value you will bring to his clinic. You have also engaged
Dr. Busybee’s finance department, and they are concerned about the legitimacy and compliance issues
related to billing for clinical pharmacy services. You collect materials that support this area of pharmacist
billing and set up a meeting. At this meeting you lay out what you are trying to do, provide examples
from other practice sites with similar billing models, specific regulations, and guidance from CMS and
the fiscal intermediary in your area. Additionally, you contact and receive several educational pieces from
your national pharmacy organization as to how they view this issue. The finance and compliance people
agree that moving ahead with billing for pharmacy services is an acceptable plan.
Resource needs worksheet
Revenue from Reimbursement worksheet
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Unused stakeholder worksheet
Group
Payer
Provider
Patient
Supplier
Who
Motivation
Individual
Insurers
Mrs. Risk
Manager
Clinical
Pharmacists
Unclear
Staff
Pharmacists
Expand their skills for
future job, diversify
current job functions
Physicians
Overwhelmed by recent
insurance addition
Concerned with liability
with lawsuit
Employees
Good care
Others
Good care
Usual
suppliers
No new contract for
provider office
Avoid lawsuits
Expand services currently
offered
Impact
Not driving factor for this
service
Possible service champion
to upper management
Provide mentoring and
leadership to service
Provide the resources to
see the number of patients
necessary to improve the
current clinical delivery
model
If on board, would provide
necessary mentoring and
referral base for
pharmacists.
If not on board, would be
very uncomfortable for
pharmacists new to this
area.
Prevention of adverse
reactions would lead to less
loss of work time.
New model could be
confusion at first; need the
front staff of the office to
be well trained to answer
questions and support
legitimacy of program.
Would need to evaluate
needs of pharmacists to see
if utilization changes.