340B and Outpatient IV Therapy Profit Center
The Highest ROI to Hit Rural America Since the Plow!!
June 16, 2015
Presented by
Mitchell Berenson, MPH
CEO/President,
Community Infusion Solutions, A Public Health Company
2014 NRHA Fellow
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2014 NHRA Fellowship
12,000 Mile U.S. Tour
70+ Hospitals Heard From and Analyzed
Findings:
1. CMS will change payment model for CAHs again
2. Interest in additional outpatient profit centers
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2
What is Outpatient IV Therapy?
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What is Outpatient IV Therapy?
Patients are diagnosed in a rural health clinic, hospital, specialty
provider, or other provider based entity and require intravenous
medications.
Referred to an infusion provider – local home health, hospital, LTAC,
etc..
These are serious diseases - MS, Cellulitis, Cancer, Osteomyolitis,
Rheumatoid Arthritis, and others.
Patients receives daily, weekly, or monthly infusions.
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Who’s Providing the Majority of Infusion Services in Rural America?
They all receive strong drug pricing similar to 340B WITHOUT the
challenge of taking care of local indigent patients.
Where do their profit go?
CVS – Woonsocket, RI
Accredo – Memphis, Tenn
Intrafusion - Houston, TX
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Home Infusion Therapy Often Cost the Patient More
Example:
73 year old, male patient with osteomyolitis, not a candidate for swing
bed.
Payor: Medicare with secondary
Drug and duration: Ceftriaxone 2gms Q24, 6 weeks ; 420mg Daptomycin
Q24, 6 weeks.
Home infusion patient’s entire treatment expense: $6,294 upfront
Hospital infusion center patient’s entire treatment expense: $0
PPS Hospital’s profit with 340B: $10,125
Patient chose outpatient IV therapy and began services on June 4th 2015
very satisfied and not delayed due to expense.
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What do outpatient infusion patients look like?
Old and young
Poor and rich
Acutely and chronically ill
The widest array of patients imaginable.
A hospital marketer’s nightmare – who to target??
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Polling Question 1:
Where do you currently provide outpatient IV Therapy?
1. Where do you currently provide most of your
outpatient IV therapy?
a. Emergency room
b. Same day surgery
c. Designated outpatient IV therapy center
d. Cancer center
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Rural Hospital Togo,
Africa
Circa 1997
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A Defined Outpatient IV Infusion Program Has:
1. A cost center assigned, budgeted, and tracked
2. Local and regional marketing efforts
3. Dedicated chronic disease case managers
4. Has trained intake, billing, and collectors specific to IV
infusion
5. An EMR that tracks patient compliance and a plan to
increase compliance rates
6. Care paths developed leading from the ER, clinics,
regional hospitals, and indigent patients
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Opportunity:
ROI Analysis by Infusion Service Line - (net profit/total operating costs)
Does not include ancillary revenues from lab, imaging, or other services.
ROI Per $1
Outpatient IV
Invested
Therapy
Service Lines CAH Example
anti b
anemia
asthma
ivig
migrn
ms
os-arth
rheum arth
gi
Total
$
$
$
$
$
$
$
$
$
$
0.12
0.63
0.35
0.25
0.54
1.26
0.24
0.23
0.43
0.28
ROI Per $1
Invested
PPS Example
$
$
$
$
$
$
$
$
$
$
0.19
0.42
0.37
0.27
0.62
1.87
0.26
0.45
0.45
0.35
Notes:
Total Costs include nursing, drug, supply, CIS case management and billing.
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Case Study and Best Practice
Hospital Based Outpatient IV Infusion
Philadelphia, MS
48 Bed PPS DSH Hospital; 340B
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HISTORY
+ 2010 – Created Home Grown Outpatient Infusion Service
+ 2011 - Program closed due to complex billing/collection and
case management issues.
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HISTORY
Why the program failed before:
“Our claims
were denied. We did not have the expertise to
manage or bill/collect this special service line”.
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New Outpatient Infusion Center
Opened Center March 2013 – 6 week implementation
+ 3 Infusion chairs
+ No specialty providers within 40 miles
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Philadelphia, MS
HOSPITAL PROVIDED:
Pharmacist and drug
Nursing
Space
COMMUNITY INFUSION SOLUTIONS PROVIDED A TURN KEY SOLUTION:
Development of patient care paths
Local and regional market development
Chronic disease case management
Billing and collection functions to include prior authorization / insurance verification
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Mississippi PPS Hospital With 26% Uninsured
12 month Operations
NCGH
Infusions
Charges
Actual
Pmts
Program
509
1,775,551
614,661
Total
Operating
Cost
Profit(Loss)
268,351
346,310
ROI Per $1
Invested
PPS
$ 1.29
Notes:
Total Costs include nursing, drug, supply, CIS case management and billing.
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High Points:
• Shared risk contract with Community Infusion Solutions
• Analysis identified opportunity before contracting
• Space available
Outcome:
• Average 45 patient visits per month
• Average $30K in monthly profits
• Program was profitable at the 2nd month
Tim Thomas, MBA
Chief Services Development Officer
601-527-5679
[email protected]
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Successful Infusion Services Operational Flow
Polling Question 2:
Are you getting the most out of your 340B program?
a. Yes, without question
b. Some but not actively outside of the oral
pharmacy
c. Not enrolled in the 340B program
d. Still investigating how 340B works
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How 340B Facilities are Missing the Highest
ROI Profit Center
2014 survey looked at PPS and CAH 340B facilities.
Question: Are you using your 340B program for outpatient IV
therapy?
Facility Answer: 65% say they are using 340B for outpatient IV
therapy.
Pharma Verifying Answer: Of the 65% that said they were
using 340B for outpatient IV therapy, 10% had pharma charge
backs.
Summation: Less than 10% of hospitals were actually
benefiting from their 340B status.
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Top Reasons for the Low Rate of 340B Usage
Pharmacist did not have fore knowledge a 340B patient was
coming in for care.
Pharmacist did not want to have drug stockpiles on hand
without knowing whom these drugs were to be used.
– This knows as CFO heart attack over inventory
Lack of a defined program meant drugs were being shipped
all over the hospital without coordination. Costs added up and
the program failed.
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Polling Question 3:
What is your definition of a strong outpatient service line
RE: CAH Only
a. no such thing in cost based reimbursement
b. strong commercial payor mix
c. strong volume - interest in cash flow
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Data Analytics Used to Establish
And
Drive the Program. Does the need Exist?
How CIS Makes a Difference for Rural Hospitals
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80%+ of citizens receive care in their local
community. What do they need?
Hospital claims data has the answer not only
for the hospital but for the community.
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Think of Sherlock Holmes
“Data!
Data! Data ! Data!......
I can’t make bricks without clay.”
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Data Extraction Request for Product Line Evaluation
Analysis methodology – Example from Case Study
Data: Tim Thomas provided case level billing data and shared the data with CIS under a
business associates agreement. Easy Data to Collect.
26,052 lines of case level billing detail which included all service areas.
An example of the seminal data elements are:
All diagnosis codes; primary and secondary insurance payors, physician related
information, and general patient demographics.
Inclusion Criteria: All patients discharged last 12 months.
Analysis: Linear regression analysis to determine the probability of positive infusion cases
matching 1 (or more) of 1,243 infusion related diagnosis codes* for the facility.
* Diagnosis codes recognized and approved by Medicare.
This data tells a story of your community’s health
and product line needs.
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Patient and Therapy Identification
Mapping – It is not enough to look at the primary diagnosis
code. Build the case in medicine.
IV Service
DX Code
Therapy Product Line
Location /
Mappings
Co-Morbidity Levels
MS
MULTIPLE
SCLEROSIS
Tysabri - MS
Drug
1 of 4 DX Listings
OA
OSTEOARTH
UNSP SITE
Reclast - OA
Drug
1 of 4 DX Listings;
Multiple ER Visits w/ Year
26 OA DX Codes
RA
RHEUMATOID
ARTHRITIS
Remicade - RA
Drug
1 of 4 DX Listings
Vancomycin;
Daptomycin Antibiotic
Therapies
Bacteremia, Peripheral Vascular
1 of 4 DX Listings;
Disease, Repeat ER Visits,
433 DX Codes
Diabetes; Wounds
Cellulites;
Antibiotics Osteomyolitis;
Sepsis; MRSA
None
None
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The Analysis will Provide:
1. Which providers will drive the program and
specifically who the patients that will deliver the
proforma.
2. Where non-compliant patients are receiving care
currently and at what cost. Repeat ER, unfunded
patients, costing the hospital thousands.
3. A budget quality financial report with costs and ROI
broken out by therapy type.
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Polling Question 4:
What specialist do you have at your hospital?
a. None - all primary care
b. Some specialist part-time
c. Use telemedicine for specialist
d. Have a full complement of specialist employed by the hospital
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Healthcare Medical Modalities – What doctors are
you missing in your Hospital’s Vertical?
Therapy
Categories
Antibiotics
Medical Modality Vertical Files
Infectious Disease Endocrinology
Asthma
Pulmonologist
Primary Care
GI
Gastroenterology
Primary Care
Migraine
Neurology
Primary Care
Anemia
Oncology
Primary Care
MS
Neurology
Primary Care
Osteo Arth
Rheumatology
Primary Care
Rheum Arth
Rheumatology
Primary Care
Podiatry
Chronic
Disease Case
Management
Outpatient
Infusion
Services
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Polling Question 5:
Does your hospital have chronic disease case managers on
staff?
a. Yes
b. No
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Chronic Disease Case Management Culture
Concept of the 2nd Stage of Prevention
How Your Hospital Will Fill The Gap
Early diagnosis and on-going treatment because the
analysis will identify these patients and needed therapies
will be developed.
Goal increase patient compliance
Lower severity of disability
Create OP infusion volume largely within your current patient
base. Build it and they will come.
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Chronic Disease Case Management
Intake Process – It’s not all about patient care…
Even for Medicare, infusion and injectibles require medical necessity:
1.
2.
3.
4.
Lab value evaluation and biomarker thresholds are met
Documented patient history around failed therapies
Specific requirements on injection/infusion frequency and drug
(branded or generic)
Patient financial responsibility determined and communicated
These items must be managed before therapy or the claim will not
be paid smoothly, that being in a timely way.
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Chronic Disease Case Management
Intake Process – It’s not all about patient care…
Scheduling is key to patient satisfaction – scheduling versus treatment time
1.
2.
3.
4.
Case management ensures pharmacy has ordered the drug days
before the treatment.
Case management coordinates the nurse infusion schedule.
Case management coordinates the patient and their family on the
scheduled visit, cost of care, and any issues that could prevent the
patient from showing up for the visit.
Case management is available to remove all barriers to care for the
hospital or patient alike (travel, drug availability, indigent free drug,
weather, or issues with the managing provider) 24/7 days a week.
Careful planning upfront and throughout the recurrent encounter yields
100% patient compliance and physician satisfaction.
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State of the Union for OP Infusion Services
75% of hospitals provide infusion therapy in the ER, Same
Day Surgery, or non-descript location.
Very limited if any infusion patient case management other
than discharge planning exist.
No program specific local or regional IV infusion marketing
efforts.
No tracking of patient compliance or follow up for noncompliance.
No cost center specific to outpatient infusion program.
Ambiguous infusion locations – untimely service, unhappy
patients!!
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Outcomes
Mississippi Diabetic Population
Poor compliance
High Lower Limb Amputation Rates
High Poverty
Community Infusion Solutions Compliance rates, meaning
patient completed course of treatment (28 days daily IV
antibiotics) is 94.6% state-wide with 5 hospital based
outpatient IV programs over two years and running.
Ohio example: RA patient compliance.
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Steps to Make IV Therapy Chronic Disease Case
Management a Reality – The CIS Approach
24/7 Patient Access to the Infusion Services Patient Advocate
Single Point of Contact for:
Pharmacy and Lab
Hospital Case Management
Hospital Infusion Nurse
Physician (both PCP and Specialist)
Must Haves: Technology, Patient Information, Connections to all
Clinical and Familial Social Support for the Patient.
Simply put – The patient knows the case manager’s name and
phone number before the first infusion occurs.
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Non-340B Facilities can benefit from Outpatient IV Therapy
1. The payor mix for outpatient infusion patients are largely
commercial even where the hospital’s overall payor mix is
government.
2. Facilities nearly all have a 12 by 12 foot room that is
available to use. Generate revenue and offer a needed
service in that unused space.
3. Texas LTAC produced $220K in annual profits without
340B.
4. PPS fee schedules are not a bad thing – Without 340B,
profit per visit for antibiotics averages $205 per visit
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Accountable Care Organizations and Infusion Services
1. Compliant patients do not seek care in the ER
2. Facilities that have infusion therapy do not have to pay
OON (out of network) for care – cost less.
3. Well developed programs seek chronic patients who need
care rather than waiting until the patient is shockingly ill.
Kaiser Shipping, CA.
Example MS patients.
ACO will budget the healthcare spend by disease state, so
these patients are not a surprise. The hospital can
decrease costs because they are motivated to cure / make
the patient 100% compliant. Managed patients cost less.
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Targets Facilities
1. Rural PPS or CAH facilities that have rural health clinics
attached.
2. Facilities affiliated with large tertiary regional
organizations. These entities will send infusion services
back to their partners.
3. Remote or frontier facilities.
4. Facility size is not a guaranteed key for success.
The key is the analysis to identify opportunity.
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Sample CAH Hospital District Assessment – West Coast
12 Month Projected Annual Outpatient Infusion Volume
HOPD - Infusion
Unique
Patients
Infusions
Expected
Payments
Drug
RN
Total
Operating
Expenses
Profit
(Loss)
anti b
13
234
104,130
25,740
10,530
57,131
46,999
anemia
7
35
9,800
875
1,575
6,426
3,374
asthma
3
72
118,800
79,200
3,240
97,524
21,276
migraine
1
27
7,776
1,080
891
5,053
2,723
os-arth
10
10
12,300
7,940
300
10,041
2,259
rheum arth
6
72
316,080
230,400
5,760
265,054
51,026
gi
2
24
105,360
76,800
1,920
88,351
17,009
potassium
2
8
3,000
380
144
1,486
1,514
m.s.
1
12
56,952
12,480
1,920
19,515
37,437
Total
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494
734,198
434,895
26,280
550,581
183,617
6.3%
Percent of total infusion volume identified as relating to Outpatient Infusion Center
Notes: Total Costs include nursing, drug, supply, CIS case management and billing. Drug costs based
on 340B pricing where possible.
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Closing Comments:
340B and Outpatient IV therapy are a win win.
Cost to patients is less for hospital versus home based
infusion services.
Use claims data to forecast and budget the program.
Chronic disease case management is the single key.
Marketing efforts are not a luxury but a necessity.
Create a cost center and track it.
Billing department must have A/R days less than 28 to
cover drug expenses.
Non 340B facilities have a strong opportunity. Focus on
specific therapies and then evaluate profits.
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The Ask:
Agree to let Community Infusion Solutions evaluate your
hospital’s data under a NDA/HIPAA Agreement at no cost to
you.
2-3 weeks after the data is received, CIS will present a
realistic evaluation your hospital’s opportunity to develop or
broaden your outpatient IV infusion profit center.
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Questions?
Thank you!
Mitchell Berenson, MPH
[email protected]
214-924-6951
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