Integrated Delivery Network

With our representation of Integrated Delivery Networks (IDN), Frier Levitt is able to utilize its full array of both healthcare and life sciences skill sets.  IDNs bill payors under both the “medical” and “pharmacy” benefits, and work on behalf of IDNs brings those departments together seamlessly.  IDNs are a set a healthcare providers operating together, typically as part of a regional hospital system to provide a full scope of services. The trend in health systems developing their own in-house specialty pharmacy has expanded, brought about in part by the proliferation of the 340b drug program. 

Over the last several years, with the increased importance and prevalence of specialty medications in the healthcare continuum, many IDN specialty pharmacies are positioned to perform well. However, this growth opportunity is not without a unique set of challenges and legal issues specific to specialty pharmacies.

Below is a summary of several of the specific challenges uniquely faced by IDN pharmacies operating in the specialty pharmacy space:

  • Reimbursement Challenges and Direct and Indirect Remuneration (“DIR”) Fees: DIR fees render many specialty medication reimbursements below water. Fortunately, Frier Levitt can help IDN pharmacies leverage their positions as part of a hospital system and utilize many protections available under State and Federal law, including appeal processes to challenge underwater reimbursement
  • Pharma-Pharmacy Relationships: In the specialty pharmacy industry, there is a vast array of different forms of pharmacy-manufacturer arrangements, including direct purchasing agreements, limited distribution drug access, hub arrangements, data purchasing agreements and patient support programs. IDN specialty pharmacies must carefully examine and structure these agreements to comport with applicable healthcare and life sciences regulations, as well as PBM requirements.
  • Specialty Pharmacy Network Access: In order to dispense specialty drugs the IDN pharmacy must be “in network” with a PBM. IDN pharmacies may dispense both retail and specialty medications in significant volumes. This presents issues when designating a pharmacy’s class of trade as either retail or specialty, making decisions regarding network participation and evaluating contract terms such as reimbursement rates and DIR fees. Notwithstanding the broad cross section of the population IDN pharmacies serve, IDN specialty pharmacies are often excluded from specialty pharmacy networks by PBMs, resulting in leakage of high-revenue prescriptions to competitor, PBM-owned pharmacies. Fortunately, many State and Federal “any willing provider” requirements can be leveraged by IDN specialty pharmacies to gain access to restricted networks.
  • Accreditation: Specialty pharmacy accreditation is becoming more and more important for payor network access, as well as access to limited distribution drugs.  With their strong emphasis on policies, protocols and procedures, IDN specialty pharmacies are uniquely qualified to obtain applicable specialty accreditations, including URAC, ACHC and JCHAO. However, with a broader array of providers under the same corporate umbrella, IDN specialty pharmacies must take steps to ensure compliance with accreditation standards and avoid interruptions in accreditation.
  • Automation, Remote Dispensing and Telepharmacy: IDNs are well versed in addressing the changing needs of its patients, including providing service 24 hours a day to hospital patients. While it is necessary for the hospital to be open 24 hours a day, it is often not practical to keep the pharmacy itself open 24 hours a day, which may create patient access to medication hurdles. Remote automated dispensing systems and telepharmacy can be one way to overcome this hurdle, offering patients access to medications when the pharmacy may not necessarily be “open,” or potentially freeing up the pharmacist’s time to conduct more clinical interventions rather than spending the majority of his or her time dispensing. However, there are numerous legal issues related to remote dispensing and telepharmacy ranging from State specific laws regulating the use of this technology to payor reimbursement issues that all must be carefully navigated before jumping into this investment.

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