Life Sciences

Medicare & Reimbursement Advisor Weekly, February 25th, 2009

Medicare & Reimbursement Advisor Weekly, February 25, 2009

Hospital P&T committee uses open formulary, leans on reps to clarify product insert, share internal data

Editor’s note: Mike Duncan, RPh, is the pharmacy manager at Sanford USD Medical Center in California, and one of our readers. MRAW recently spoke with Duncan about general P&T committee topics.


MRAW: What type of drug formulary do you have?

MD: We have a fairly open formulary, which can be controversial. We do this to avoid all the problems of switching. Like for oral and maintenance drugs, let’s say someone comes in on Crestor, and we switch to Lipitor for the three days they’re in the hospital. Then they go home on Lipitor and this sets off a wave of challenges—clinical, safety and financial. So we keep the formulary fairly open on maintenance drugs. We might do some adding and dropping of drugs each P&T and some [prior authorizations], depending on the class.

Expedited reviews

MRAW: What value can a pharmaceutical rep offer to expedite P&T review of a drug in the hospital setting?

MD: When we get requests for new drug, we always give the request to the appropriate resident, depending on the drug class/therapeutic area, and then they’ll do a review of the literature, which we see as an unbiased first step in the process. Sometimes during that process, questions may come where the rep can add value. Let’s say we’re looking at literature and the product insert says we need to use the drug within four hours of the symptom’s first showing, and so we want to clarify this and could use the rep’s help looking for any unpublished/internal data, i.e., some internal trial stability data that the manufacturer may have to explain the reason for the [product insert] statement.

Initiating P&T requests

MRAW: What’s the P&T review process like? How does a drug get reviewed?

MD: The local physicians, or in some cases, a pharmacist (either community practitioners or sometimes hospital-based) will initiate requests. Sometimes a rep will call saying that Dr Smith wants to use Drug A or wants us to review drug A, but we need to hear from the clinician.

Time considerations

MRAW: Is there a time period a product needs to be on the market before it can be reviewed by the P&T committee?

MD: Usually three months but, again, we base reviews on clinician requests, so it’s happened before that a review will come prior to or at the point of an FDA approval of a new indication or drug. We would review and consider—perhaps in the same month—as an FDA approval. Our internal pharmacists and medical staff can also make these requests, so the communication comes from a few different places.

Monthly meetings mean fast reviews

MRAW: Typically, howlongfrom the start of this process is there toa decision?

MD: The hospital P&T meets monthly, so if we get a request to review a drug—including a new drug—within a few weeks of the meeting, we usually put the resident right on the internal lit review so that it’s ready for the P&T. During that time, we may need the rep to be available for questions.

Adding value

MRAW: Any examples of the types of things reps do that you value versus those you don’t ?

MD: We use them a lot after the review to help in promoting appropriate use and in educating the doctors, directing them in how to promote it. Like for a new antibiotic, we worked with a rep to make sure physicians knew that it should only be used by the hospitalists and intensitivists, and that this is the way it needs to be. We value reps who know the process and bring fresh ideas for education to use that can help us address safety and communication issues in their class.

Novel therapies

MRAW: How might this differ for new therapies versus existing ones with a new indication?

MD: If it’s a tight window before a meeting, and it’s a new drug that may be a breakthrough or that we’ve gotten a lot of requests about, or if it is new to a class that’s not crowded, we would make sure that gets reviewed in time for the monthly meeting (a special meeting is likely not needed, but we’d convene in unusual circumstances for a novel therapy. We’d probably try to see that coming by having the resident do the lit review earlier, if possible).

economic subcommittee to the P&T

MRAW: Is there an economic subcommittee to the P&T?

MD: There is no economic subcommittee here, like other hospitals, that looks at costs. We look at efficacy and safety, and usually that weeds out drugs before we have to look at cost. But we do look at cost in the review, if necessary. We did a cost analysis of cost savings comparing a on-per-day to a three-per-day drug and put in some figures for labor time for the three per day. This was when we were looking at antibiotics, switching from maropenem to doripenem.


MRAW: Are there set agendas for the P&T?

MD: No. Although, we’ll always review new drugs, if available.

If you’d like to discuss hospital pharmacy issues, contact me at

AMDA coverage

We’ll be attending the American Medical Directors Association (AMDA) 2009 Annual Symposium on long-term care (LTC) trends in Charlotte, NC, March 5–8. If you’d like to meet to discuss LTC initiatives, or if you’re interested in sponsoring meeting coverage for Contemporary Long-Term Care, contact me at

Survey snapshot

When asked which of six choices would most improve payer-physician relationships, the top choices by 122 health plan survey respondents included pay-for-performance programs that focus on certain health measures (29%), or speeding up processing, fixing, and paying claims (28%). Only 19% of the managed care respondents to the health plan survey thought increasing reimbursement rates would do the trick. For more information and headlines, click here to access MRAW’s sister publication, HealthLeaders.

Reporter's notebook

E-prescribing: Physicians ignoring clinical alerts

Dana-Farber Cancer Institute recently studied medication alerts in ambulatory care.

The study found that electronic prescribing (e-prescribing) systems with decision support may well improve patient safety and protect patients against drug interactions, but physicians ignored most of the clinical alerts.

TEXAS ENrollment issue

Some say the recent expansion of the Children’s Health Insurance Program in Texas means working-class families in Dallas-Fort Worth and the state can breathe easier now. But critics say the current system makes it anything but easy to enroll. Julia Easley, director of advocacy for Children’s Medical Center Dallas, says the current eligibility system has a six-month renewal cycle that not only overburdens the state offices that process the applications, but also frustrates parents who qualify. Note: For more details about these stories, go to the Health Plan page at

New LTC rule would increase disease checks, but nurses are undereducated

Under a new regulation for your LTC customers, called MDS 3.0, Section I discusses Active Disease Diagnosis. The current language, if approved by Medicare in the final guidelines, will require nursing home/LTC staff to check “all active diseases in the last 30 days,” forcing nursing facility staff, namely nurses, to think more critically about disease diagnoses within the 30-day window. For example, if a resident suffers from a stroke three months prior to her MDS assessment, nursing homes may document or code the late effects the resident continues to suffer from, such as aphasia or right-sided hemiplegia, but the stroke diagnosis would no longer be coded since it did not occur in the past 30 days. The section introduces some new diagnoses, such as post-traumatic stress disorder. According to a poll of 1,321 nurses during the week of February 16, the average likelihood that disease recognition and diagnoses could increase in LTC for certain conditions is 7.921 out of a 10-point scale. But 68% of the nurses polled said there is a significant lack of education about diseases, signs and symptoms, drug-drug interactions, and adverse events. Of 944 LTC administrators polled on the issue, 71% said their facilities are mandated to train staff on the range of MDS changes, but lack the budgets to do so effectively.

Source: Emily Beaver, Associate Editor, Long-Term Care Division, HCPro, Inc., Marblehead, MA. Go to for more details.

Hospitalist movement opens new doors for PCPs to treat chronic conditions

MRAW’s publisher, HCPro, has a blog for hospitalists, and a few recent posts caught my attention. The following is a snippet from one (click here to check out the blog). Some primary care physicians (PCP) love that hospitalists have taken over the responsibilities associated with providing inpatient care, while other PCPs long for the good old days when they followed their patients from admission to discharge. For those PCPs who have embraced the hospitalist movement, they find it allows them to take advantage of opportunities they may not have had in the past, such as getting a chance to deal with chronic patients. When PCPs refer patients to hospitalists, the time PCPs once spent shuttling back and forth to the hospital can be spent focusing on treating chronic conditions, working with families, and building strong patient relationships, says Ken Simone, DO. For details about the hospitalist blog, contact the editor.

Clinical vs. contracting strategy: What works best for new line extensions?

How have manufacturers of the most recent line extension products to hit the market achieved unrestricted access to them, be it a tier-2 position or tier 3, without any step edit or prior authorization? What strategy—clinical or contracting—works best?

The following is one view, suggesting a mixed approach:

  • Reduce WAC (wholesale acquisition cost), compared to the existing product pricing
  • Prove that the new product does not extend patent life
  • Offer incremental discounts on both products

Note: This strategy was shared by a few plans who asked not to be named.

Other plans say line extensions offer little clinical value to a payer, which is why most manufacturers need to take a contracting approach—period, sometimes even to the point where the plan may lose all rebates on the existing product unless the line extension is included, or it may be a reduced rebate on the existing product.