For the past 10+ years, hospital CEOs have cited financial challenges as the number one issue their organizations are facing, according to American College of Healthcare Executive’s annual survey of hospital executives. Hospitals and health systems that have indigent care as part of their missions are especially feeling the pressure of increasing costs to treat at-risk populations, which reached nearly $85 billion in 2013.
As a result, it’s increasingly important for hospitals and health systems to look for ways to recover costs associated with uncompensated care, while ensuring patient compliance with medically necessary medications. A Patient Assistance Program (PAP) is one way to accomplish these goals. By connecting eligible patients with drug manufacturer programs that provide free medications and medical devices – PAPs can be a win-win for patients and health care providers alike.
Even with Medicaid expansion and the Patient Protection and Affordable Care Act, a PAP process is still foundational in treating the un- and under-insured. Regardless of whether you self-manage or outsource the management of your PAP, now is the time to consider whether it’s adapting to the changing healthcare landscape. If not, you could face costly and time-consuming rework and potential audits by manufacturers and foundations alike.
Here are five steps you can take to ensure you continue to drive compliance for your hospital’s PAP, promote better care for the patients and improve the financial health of your organization.
Having a solid outpatient PAP process in place to support patients with chronic health conditions can play a critical role in helping to improve outcomes for some of your most at-risk patients. Patients who cannot afford their maintenance medications are likely to return to the hospital through the ER. Not only does this take a tremendous and unnecessary toll on patient health, but it can also negatively impact readmission rates and drive bad debt. A supportive PAP is a way to help qualified patients adhere to medication and in turn improve outcomes. Engage patient advocacy and admissions teams in making sure every potential patient knows there are options, like a PAPs, so qualifying patients don't go without necessary medications.
In many markets, up to one-third of the patient population has converted to a Medicaid payer status . With that in mind, ‘charity care’ isn’t going away - it might just present itself a little differently than before. It is not as simple as uninsured patients. Charity care can include patients who simply cannot afford high out-of-pocket co-pays. Patients can also convert from self-pay or indigent status to being covered by Medicaid very quickly due to expanding coverage. Some manufacturers do not allow much time for a PAP to recover drugs for previously administered medications. This can result in patients not receiving medications in a timely manner or lost recovery opportunities for the hospital.
As payer formularies and criteria for medication coverage ensure you have a fluid prior authorization process in place to confirm whether medications will be covered for patients. If a payer coverage gap exists, the patient may still qualify for a manufacturer’s PAP. If a patient’s insurance company declines to cover the cost of a specific mediation, you must have a process in place to begin PAP enrollment quickly. Knowledgeable PAP administrators have a good understanding of which health plans cover which drugs and/or treatments and which do not. But, this process still requires staff to spend a great deal of time researching eligible PAP opportunities. At the same time, in this changing environment, patient advocacy equates to financial solvency; making it all the more important to pursue every avenue to secure funding for all patient populations.
Many different departments of the hospital (admissions, clinical, patient advocacy, pharmacy, receiving and billing) are involved in an optimized PAP process, and to prevent re-work and missed opportunities, responsible employees should be engaged to ensure they are performing the right functions at the right times. If the correct manufacturer application processes are not followed, gaps can impact submissions or even trigger audits. Having a dedicated PAP team member to act as a liaison to all these areas can help ensure that all required documentation is gathered, submitted and stored securely. Also ensure the documentation is stored in a centralized location, like a secure web-based software or network shared drive on hospital servers.
Healthcare and payer reform is constantly evolving and manufacturer requirements and drug eligibility are always in flux. It’s critical to have PAP staff that are knowledgeable about the qualifications of the hundreds of manufacturer drug programs, and that they’re trained to work within the latest software technology to ensure compliance with different drug manufacturer requirements. In addition, PAP staff can add value to the hospital by leading structured business reviews of the program’s progress with key hospital stakeholders. This audience can help when challenges arise in documentation preparation or if help is needed to enforce departmental compliance of the program. It can also provide an opportunity to review additional areas to expand PAP savings, such as medical device recovery.
Manufacturers are modifying policies to adjust to legislative changes. Adapting quickly helps your hospital take advantage of the most recovery opportunities. It is important to have strong relationships with local and national Medicaid offices to effectively monitor a patient’s Medicaid status. For example, a PAP application might require a patient have a Medicaid denial before accepting the patient and providing them the free drug. In this case, the scale of the vendor you work with can be critical in keeping current with understanding healthcare reform and its continual changes.
The success of your PAP in many ways depends on the depth of experience of the people who manage it, and the degree to which they’re making sure it’s adapting to evolving industry changes and patient needs. Maintaining a successful, compliance-driven PAP program takes time, expertise and focus. Whether you decide to manage your PAP using existing staff or by outsourcing its management to a PAP expert, keep these key tips in mind to increase the likelihood that your PAP will measurably improve patient outcomes and help reduce your facility’s costs for providing charity care to your community.