Life Sciences

Medicare & Reimbursement Advisor Weekly, April 1st, 2009

Medicare & Reimbursement Advisor Weekly, April 1, 2009



Assisted living emerges as key pharma segment: Physician’s role discussed


The assisted living (AL) segment is becoming increasingly important to pharmaceutical companies. Some companies are addressing this with a small account team dedicated to calling on the top assisted living facility (ALF) chains; others are simply in exploratory mode with a managed markets position assigned to learn about the market. I’ve received many questions from managed markets readers about this market and its opportunities for pharmaceutical companies. Some assisted living organizations are shifting from a social model to a medical one, focusing on assessing and treating chronic conditions. Others have not made that change.

Increased utilization

“Assisted living facilities are more profitable for doctors and nurses to see patients,” says Malcolm Fraser, medical director at PartnerCare, a special needs plan/HMO in Florida.

Right now, reimbursement for doctors and nurses is higher if they see patients in an AL setting than in a nursing home. According to a forum I hosted in September 2007 with Dr. Fraser and Humana’s long-term care manager, Ken Tuell, RPh, CGP, scripts per member per month for Medicare Part D beneficiaries have been steadily increasing in the AL setting, whereas they have remained somewhat flat in the skilled nursing setting.

Therapeutic focus

Bladder incontinence and heart diseaseare among the top medical conditions in AL residents, as the chart on p. 2 illustrates. The chart on p. 3 shows the top AL chains.

The physician’s role

The following is an excerpt of a white paper from the American Medical Directors Association on the physician’s role in AL, available at This white paper may spark some ideas—please feel free to contact me for additional discussion at

As the assisted living industry has grown, the nursing facility population has changed, with an increasing percentage of individuals receiving nursing-intensive short-stay postacute medical care in traditional skilled nursing facilities. Moreover, when we consider the demographics along the continuum of care for the elderly, there is an increasing utilization of formal supportive care at home. These shifts of care sites have enabled ALFs to fill a need previously met by skilled nursing facilities. Other reasons for the rise in ALFs include:

  • Geographic separation for potential caregivers
  • Elders’ wishes to remain independent and not burden their children
  • Social reasons that combat isolation
  • The promise of support that will accommodate their increasing needs at the same site

The growing population of dependent elderly needs primary care physicians (PCP) because of multiple comorbid conditions and complex medical treatment regimens. As residents in ALFs age, they may become ill and need hospitalization. As a result, the AL population may experience complications, functional decline, and avoidable unfavorable outcomes.

This evolution in AL resident characteristics and needs would seem to warrant oversight, regulation, and evidence-based care standards comparable to those governing nursing facilities. However, the AL industry as a whole continues to assert that ALFs are predominantly social models and should not be characterized as centers of medical care.

The Care Challenge

Many AL residents are elderly, have significant functional and cognitive impairments, have many medical and psychiatric comorbidities, and are at risk for developing geriatric syndromes such as falls and increasing confusion. So despite the laudable goals of an environment that addresses social issues such as isolation, need for prepared food, and manageable living space, there is often an equally important need to address complications of aging and medical syndromes and illnesses that affect the frail elderly and other chronically ill individuals. As identified in nursing facilities, appropriate management of medical issues may significantly affect quality of life and personal and social function. The challenge is how to address these key medical issues in the context of a primarily social and residential setting.

Wide variation among ALFs makes it difficult to establish universal standards. For example, such standards would cover the extent of documentation, supervision of medications, and observations of clinical change. These standards would also address the expectations for handling common geriatric syndromes in this population. On-site visits and care planning tools to identify patient-specific risks, care objectives, and outcomes are recommended to encourage PCP involvement in their patients’ care and to ensure appropriate care for AL residents.

The Physician Connection

The PCP is a key clinical resource for AL residents. The American Geriatrics Society and American Medical Directors Association position papers acknowledge the importance of this patient-physician relationship. They also note the relevance to the AL setting of systematic approaches to identifying and addressing risk factors. Each individual entering an ALF should receive an initial assessment and have a PCP-approved care plan to address their clinical issues. Just as the MDS came to be widely applied in nursing facilities and the OASIS in home care, there should be a similar tool to guide the care required by the typical AL resident. It would be imprudent to ignore the many lessons that we have learned over the past 40 years in nursing facilities.

There is not much literature that addresses the relationship between PCPs and ALFs, staff members, or residents. However, the PCP faces a challenge in knowing what support the resident will have in the ALF. Without adequate information, the PCP may misunderstand the level of care and services that an ALF can provide, particularly in relation to issues of dementia and safety, observation of clinical changes, and medications.

A series of interviews of residents, families, staff members, and administrators of various smaller ALFs revealed some interesting concepts regarding the PCP’s role. The four major physician-AL themes that were identified from the transcripts were:

1. Magnification of physician authority

2. Disagreements with physician care

3. Physician communication

4. Continuity/discontinuity of physician care

The first theme found that the PCP may write an order that is misinterpreted (magnified) by the staff. For example, the order may prescribe a decrease in sodium in a patient’s diet. The staff may interpret the order as specifying no salt in the patient’s diet, thereby making it unpalatable. The second theme, disagreements by the residents, families, or staff members with the PCP’s care, is common and may reflect a situation in which a PCP has limited information from the ALF or family on which to base decisions regarding the treatment plan. This issue points to the need for AL-PCP collaboration in determining and implementing the patient’s plan of care. The third theme, physician communication, focuses on the need for the staff, family, and others to communicate with the PCP, which is time- consuming for a physician. This warrants the development of convenient and efficient communication channels, which may require the PCP’s on-site appearance. The fourth theme, continuity/discontinuity of physician care, is prevalent in most ALFs because of geographic separation and the involvement of hospital physicians during hospital admissions and of specialists in managing specific diagnoses. This can result in contradictory orders, prognostication, and general clinical recommendations.

Recommendations for facilities

In keeping with legal obligations of disclosure, all ALFs, regardless of size or level of clinical services, should clearly identify their medication policies, clinical capabilities, and service and care limitations to potential residents and their families before admission. After admission, the facility should also clearly communicate this information to off-site pharmacies used by its residents and to each resident’s PCP, if this has not already been done.

For all medication issues, there should be clearly defined lines of communication. For example, when there are medication issues such as continuing indications for treatment or suspected adverse consequences, the facility staff should know whom to contact, such as the patient, the family, and/or the PCP.

These plans should be patient-centered and should accommodate patient preferences whenever possible. For example, a facility that requires residents to eat all three meals in the dining room may need to make an exception for someone who sleeps late and doesn’t want to eat breakfast. There are other viable alternatives for trying to maintain stable weight. Another example involves ALFs that use an off-site pharmacy. The ALF may allow a patient to use his or her own pharmacy or mail-order source while requiring the resident to inform the staff about all medications to permit adequate monitoring of effectiveness and adverse consequences.

Staff members at an ALF should develop policies that include notification of the PCP regarding hospital transfers so that issues such as medication reconciliation and medication management can be reviewed and updated as needed by the PCP.



Survey snapshot

Depression utilization opportunity

An independent U.S. task force says physicians should screen kids 12–18 for depression and, when appropriate, look to medications as a therapeutic solution. This is a change from an earlier policy that concluded there was a lack of evidence to support or oppose depression screenings for teenagers. U.S. adolescents should be routinely screened for depression by their primary care physicians. How this translates into the medical practice and opportunities for appropriate use of antidepressants remains to be seen. Details are available at