LTC Pharmacies Crucial for Nursing Home Vaccine Distribution, But Financial and Logistical Hurdles Loom
Skilled Nursing News
The hopes of pretty much everyone in the country now rest on the distribution of a safe and effective COVID-19 vaccine, and for nursing home residents and their families, the stakes are even higher: With significantly elevated risk of fatalities from the novel coronavirus among the frail and elderly, the race for a vaccine is a life-or-death proposition for millions of Americans and their loved ones.
But long-term care pharmacies, which will likely serve as the primary vector for coronavirus vaccine distribution in the setting, haven’t been immune to the financial turmoil that the rest of the health care industry has weathered — and a top advocate for the sector says the government needs to provide significantly more relief for LTC pharmacies if it expects a smooth vaccine rollout.
“We need the resources in order to be capable of handling the vaccines,” Alan Rosenbloom, president and CEO of the Senior Care Pharmacy Coalition, said during an interview conducted earlier this month.
With so much on the line, Rosenbloom expects the challenges of safely sending out millions of COVID-19 vaccines will be significantly greater than LTC pharmacies have faced in the past, with specialized storage requirements and strict rules around tracking exactly who has received the vaccine, and in how many doses.
SNN called Rosenbloom to learn more about logistics of vaccine distribution, and what he believes Washington must do in order to meet the demand of long-term care facilities and their staffs.
Where are we right now — what have some of the biggest challenges been for LTC pharmacies, and what problems still remain, in your view?
In the first month to six weeks after the national emergency was declared, most of the focus for long-term care pharmacies was on regulatory relief — primarily regulatory relief from certain things that CMS allows under the Medicare Part D portion of the Medicare program, which is the most significant payer for patients who get medications from long-term care pharmacies.
The Part D program is basically an insurance model: HHS contracts with plans, plans contract with pharmacy benefit managers, and the pharmacies provide the drugs to patients and facilities. Through the PBM, they bill the patient’s insurer under Part D. There are a variety of [things] that are allowed under the regulation, but they often really translate into the way that PBMs manage their spend, essentially — things like prior authorization requirements before drugs can be dispensed, preventing prescriptions from being refilled too soon, those kinds of administrative problems.
Normally they may be headaches for long-term care pharmacies, but they aren’t real obstacles to getting medications to patients in a timely way. At the outset of the pandemic, of course, they became obstacles, so we devoted a lot of attention to trying to get some relief from CMS, which they provided probably around the end of April.
At about that point, we started to hear from the long term-care pharmacy community that the financial impact that was hitting facilities was also hitting pharmacies. What’s happened to pharmacies in terms of revenue loss pretty much mirrors what happened to both nursing homes and assisted living facilities in terms of patient loss.
That fits into two timetables. The first, which was pretty immediate, was the short-stay rehab population — the Medicare Part A and Medicare Part C patient populations — because those patients essentially disappeared from nursing homes for a while. So, too, did their need for medications, and those patients take about 13 prescription drugs a day.
Over the course weeks after the pandemic — even until now, depending on the market — there was an almost immediate 25% loss of revenues for that percentage of patients, and that’s pretty much still at around 20% across the country. Obviously, some markets have rebounded better than others. Some are worse than that, some are better than that. But overall, that kind of decline in revenues is continuing.
The second phase of revenue loss pertains to the longer-stay patients, and this would be the Medicaid-based population in nursing homes, and essentially the entire population in the assisted living world, which primarily is paid for by private pay or private insurance — although the drugs continue to be paid for primarily by Part D for the long-stay population, regardless of where people reside.
There’s about a 4% attrition rate, on average [under normal circumstances], across both kinds of settings for that patient population — people die, people are transferred, whether it be to the hospital or back home, those kinds of things.
Not surprisingly, given all of the uncertainties around COVID, there wasn’t the usual repopulation of new patients coming in. That 4%-a-month attrition has gotten to somewhere between 16% and 20%. Again, on a market-by-market basis, it may differ, but there really hasn’t been the significant bounce-back yet. I think there are some open questions about what will happen post-pandemic with respect to where those patients might end up.
That’s translated to a significant economic hit, coupled with probably about a 10% increase in costs to manage the pandemic. It ranges from things that everybody else in the health care space and, frankly, in the business community had to face: PPE, social distancing, hard costs and soft costs.
But in the long-term care pharmacy context, it also changed the nature of deliveries. The handoff at facilities became much more complicated and time-consuming, which of course translates into costs — entirely appropriate to protect patients and employees at facilities, but it did add both time and cost.
Generally speaking, the drugs for the patients in the facility are delivered at least once a day, sometimes more, and they’re generally delivered in hard plastic totes. You have prescriptions for 100 patients, and they’re delivered in these totes, which make it easy to take the drugs out of the totes, and put them into the med carts for administration.
However, when you can’t reuse the totes, suddenly you’ve got a new expense, because those totes are kind of indestructible — you buy them once every 10 years, as opposed to buying for every individual day, one-day use. Those are the kinds of things that increase the expenses, and that’s a pretty bleak economic picture.
On average, how would you quantify the financial hit?
The revenue hit’s been around 20%, plus about a 10% increase in cost, so the overall bottom-line effect is about 30%.
What about the various CARES Act relief levers?
LTC pharmacies have been eligible to apply for some of the general relief that has been available. But HHS in June amended the frequently asked questions that are used to interpret what the various distributions really mean, and how you apply for things. They came to the conclusion that prescription sales are not patient care.
Why is this important? It’s important because the CARES Act, that $175 billion fund, says that to be eligible, providers have to provide diagnosis, testing, or care for patients with or who are suspected of having COVID-19. That isn’t a long-term care pharmacy decision. Frankly, it’s a pharmacy decision driven by perceptions about retail pharmacy. Pharmacies don’t provide diagnosis for disease; therefore, they don’t provide diagnosis for patients with COVID. They don’t generally test for disease. Even though subsequently, there’s been some capacity for pharmacies to do testing, it really isn’t relevant to a pre-pandemic, during-pandemic kind of world, which is the intent of the CARES Act.
The department came to the conclusion, rightly or wrongly, that the stuff that a retail pharmacy does not include patient care. Now, we’re not commenting on whether that’s a reasonable interpretation or not, but what we do know is that long-term care pharmacies are required by the Medicare and Medicaid statutes to provide patient care. It’s clear in statute, it’s clear in the regulations, it’s clear in the sub-regulatory guidance. Even the State Operations Manual for facilities specifically says that the pharmacy services, that are part of the requirements of participation, are, quote, integral, close quote to patient care.
So our argument has been: We understand you have this limitation, but it doesn’t take into account the reality of the long-term care pharmacy world. But as of right now, that interpretation is still applicable. The pharmacies that have applied for relief have gotten far less than the goal that HHS has set. This is true for nursing homes, and others who’ve applied for money under general distributions, not just targeted distributions — that their goal is to try to give providers roughly 2% of their annual patient-care revenues to offset the economic consequences of COVID.
Generally speaking, that’s what hospitals got, doctors got, others have got — separate and apart from any targeted distributions, like the $4.9 billion in addition that nursing homes got. Nursing homes were able to get money under the general distributions to the extent that an individual home qualified. They’ve also been able to get an allocated amount from that $4.9 billion, and now there’s going to be a dedicated, separate distribution to be announced — in terms of the details — for assisted living facilities that only accept private-pay patients.
For long-term care pharmacies, they largely — not entirely, but largely — were eligible for distributions through the general distribution so far, but their relief was limited such that it is well below the 2% goal because of this prescription sales limitation.
What kind of support do you believe LTC pharmacies need to continue smooth operations during the pandemic?
Let me start with this. It’s not necessarily what we need, but another dimension to the set of issues. It starts with the business partners, the nursing homes, because the nursing homes make payments directly for Part A and Part C patients — just for Part A, in some degree Part C, because the plans or the Medicare program, respectively, pay a kind of combined payment to the facilities, which include pharmacy services.
What ends up happening, of course, when a sector is significantly stressed economically, is that the time it takes to collect lengthens, and the risk of bad debt goes up. That’s par for the course, whenever there’s a significant negative economic effect — in any business, really, but that includes long-term care.
Having said that, the most important thing that can happen right now is for HHS to determine that because long-term care pharmacies do provide patient care, and federal law requires it, somehow there needs to be a workaround for long-term care pharmacies under this prescription sales limitation.
From our perspective, the good news is that [in early September], HHS issued a new FAQ — which doesn’t change the FAQ that already exists about this limitation, but adds language that HHS continues to consider … a workaround. That was a pretty clear indication that our efforts to create, if you will, an exemption from this prescription sales limitation if you provide patient care, continues to be in play.
We know that there’s going to be a phase three distribution, because the HHS has already said so publicly with respect to private-pay assisted living. It seems to me that it’s quite possible there will be other elements to that next distribution.
We are really hoping that that will include long-term care pharmacies, and that is the most important thing that we could accomplish right now — especially given that as Operation Warp Speed is unfolding, the vaccine program, they are looking to long-term care pharmacies to be responsible for delivering vaccines to patients and possibly to staff, employees at long-term care facilities. Not only to deliver them, but to track them, which is likely to add substantial costs.
On the one hand, you’re saying: Please take on two other responsibilities. They’re urgent, and we’re not sure how you’re going to get paid for them. On the other hand, [you’re] saying: We’re not sure you deserve any financial relief for the losses that you’ve suffered. That, to us, is a very important dynamic. We need the resources in order to be capable of handling the vaccines.
The vaccine that seems on the fastest track to authorization, at least at this point, is the Pfizer vaccine, and the Pfizer vaccine has to be kept at a constant minus 94 degrees [Fahrenheit] — so super cold. That has very significant ramifications for the distribution chain, which includes long-term care pharmacies, in terms of costs, because there are not a lot of places that are currently equipped — including distribution centers for wholesalers, major shippers to the commercial markets like FedEx or the postal service.
It certainly extends to long-term care pharmacies. The tracking is going to be very complicated because all of the vaccines that are currently in third-stage testing in the United States are two-stage vaccines. So you can’t simply send 100 doses to a nursing home [in one] box, that everybody’s been administered the same drug in the same dose. They’re going to require booster shots. That’s going to be specific to the particular kind of vaccine.
There’s a hell of a lot of patient tracking that’s going to have to happen, and employee tracking is going to have to happen — and obviously, that adds costs, especially since it appears that some of the data points that will have to be collected are not things that are currently part of electronic health records in long-term care facilities.
That’s the world right now. The first thing is: Get additional relief to help long-term care pharmacies in response to the pandemic and in preparation for vaccine distribution. Then the second thing is: Make sure that you are appropriately recognizing the costs that long-term care pharmacies are going to incur to get the vaccines delivered safely and effectively — particularly since, in nursing homes in particular, it is probably going to be the nursing home staff that administers the vaccine.
Generally speaking, the idea is that you pay for the drug and the administration of the drug as one lump sum to whoever is doing the administration, in this case staff at the nursing homes. You assume that all of the related expenses, whoever’s incurring them, are wrapped up in that payment, and that’s not a model that’s going to work here.
That’s where I think the real focus ought to be right now, not only for long-term care pharmacies, but for the patients and staff at facilities.
What are some of the other hurdles you’re seeing with vaccine distribution? A lot of people — from resident to their families to leaders in the industry — are really pinning all of their hopes on it.
The first problem here is that unlike the retail world, where you might be able to turn to a couple of the national chains to handle most of the vaccines in the community — that will not work in a long-term care pharmacy context. You couldn’t simply go to the largest, or the handful of the largest companies and say, “You take care of it,” because it’s too diffuse a world, number one.
And number two, there are actual requirements imposed on which pharmacies can provide medications to people in nursing homes and other kinds of long-term care facilities. That would make it very difficult to simply pick a pharmacy company, and it would be almost impossible to pick a retail pharmacy. A Walgreens or a Rite Aid or any of those folks, it would be very difficult to simply say to them: Take care of it.
There’s also the information-gathering problem, which is: How many vaccines do you need? How many patients are there? Where are they? The same set of questions for employees. How many doses does the CDC have to allocate to long-term care facilities? All of that information-gathering is very challenging. It’s going to be important to figure out how we get that information assembled.
There’s some efforts already ongoing, through the Operation Warp Speed effort, but there are lots of potential data obstacles there — and data problems both to get the upfront information you need to make sure that you have a smooth distribution chain, and then to track once you got the drugs distributed.
The second set of concerns is the priority. Some vaccines are apparently proving more effective in younger adults than in older adults. If you looked at the recommendations that the National Academy of Sciences, Engineering, and Medicine issued [earlier this month], they have two priority categories: Priority 1A, which is health care workers, and priority 1B, which includes older adults living in congregate settings like nursing homes.
That Pfizer drug that seems to be likely the first in the pipeline, apparently seems to be proving out more effective in younger than older adults. It may not be the vaccine of choice for people in nursing homes. However, the employees in nursing homes would be on the priority list — 1A priority, and then when another vaccine that’s more effective in the older population is developed, then that’s when 1B would kick in.
You’re seeing these kinds of concerns reflected, but there’s no guarantee that the Pfizer drug is the first drug out of the box, right? If it’s not the Pfizer drug, are these standards going to have to change? What if the first one is really effective for old people, and not so great for younger people. All of those are open questions.
This interview has been condensed and edited for clarity.
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