Grant Title: A Novel Payment Model and Employer-based Wellness and Pharmacy Services Program
Grants Awarded Number
Grant Complete, 2022
University of Tennessee
Nashville, Tennessee
Grant Category
Pharmacy Management & Ownership
Novel Payment Model, Employer-based
Grant Docs
Synopsis | Toolkit

Historically, the community pharmacy business model has primarily depended on revenues from drug product sales, rather than professional services such as drug utilization reviews (DURs), counseling, and Medication Therapy Management (MTM). However, growing fluctuations in reimbursements based on prescription drugs and overall declines in pharmacy revenues place community pharmacies at great risk with little control. In contrast, reimbursement based on professional services offered by a pharmacy may provide pharmacies increased control over revenues based on the quality and efficiency in which care is delivered. Such a novel payment model involving 1) reimbursement of drug product at actual acquisition cost (AAC) in combination with 2) a true professional dispensing fee for provision of associated medication dispensing professional services, may improve stability in pharmacy reimbursements while simultaneously incentivizing higher quality care. If this professional dispensing fee also included payment for MTM services, such as annual comprehensive medication reviews (CMRs) and periodic targeted medication reviews (TMRs), further improvements to patient outcomes and reductions in overall health care costs for patients and employers would be likely. The present project is a collaboration between a local Memphis-based employer Barnhart Crane and Rigging, a Memphis-based independent community pharmacy Good Shepherd Pharmacy, and the University of Tennessee Health Science Center (UTHSC) College of Pharmacy, which aims to 1) implement a novel pharmacy payment model founded on a true professional dispensing fees and an associated MTM Program provided to a local employer group, 2) investigate its impact on economic, clinical, and humanistic outcomes, and 3) develop an implementation toolkit for use by other pharmacies for the purposes of scaling similar employer group true professional dispensing fee contracting.

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  • Applicant:
    Kenneth Hohmeier
    PharmD, RPh
    University of Tennessee