New Short-Cycle Law: Is It Worth the Pain?

Feb 01 2011

OAK BROOK, Illinois—The federal government is under the impression that too many medications paid for by Medicare are going directly into the trash. The result is a tremendous waste of materials and money in long-term care.

At fault, waste reduction proponents say, is a dispensation cycle that requires unused medications to be thrown out after 30 days.

Originally introduced by Sen. Max Baucus (D-MT) as “America’s Healthy Future Act of 2009,” the measure was signed into law last year with the Patient Protection and Affordable Care Act, President Obama’s landmark healthcare reform program.

Section 3312 of the healthcare reform law addresses pharmaceutical waste in the long‐term care setting, requiring Medicare Part D and Medicare Advantage prescription drug plans to employ utilization management techniques such as weekly, daily or automated dose dispensing.

The goal is to reduce the quantities of medications dispensed per fill for beneficiaries who reside in long‐term care facilities in order to reduce waste. The law currently will affect brand-name drugs only and not generic equivalents.

Known as “short-cycle dispensing,” the effort to eliminate 30-day cycles has generated mixed reactions across the long-term care and pharmacy sectors. Uncertainty and fear are common among constituents, says Lynne Batshon, director of policy and advocacy for the American Society of Consultant Pharmacists.

“Pharmacies are unsure of the feasibility of transitioning their operations to a seven-days-or-less dispensing method in the time frame provided and some are fearful that a business model revolving around seven-days-or-less is not sustainable,” she says.

The uncertainty also extends to the amount of drug waste in long-term care, she adds, but concedes, “It is true that when a patient’s medication is discontinued to complete consumption of the dispensed amount, the unused remainder is often destroyed, disposed of or—where legal— returned to stock.”

Less than a year away

CMS has set a Jan. 1, 2012, launch date for the short-cycle medication rule, which “represents a substantial burden for all long-term care pharmacies,” Batshon says, because “pharmacies will have to retool their operations.”

“These operational changes will entail a substantial capital investment that could include several options, such as adding staff, new packaging systems, new software systems and automated dispensing systems,” she adds. “They also must institute new policies and procedures to accommodate some of the new requirements associated with the short-cycle rules, such as the return of all unused medications back to the pharmacy.”

To help pharmacies and providers get ready for the new medication system, ASCP is partnering with the Academy of Managed Care Providers and the National Council on Prescription Drug Plans to provide a series of informational audio conferences in 2011.

Among the topics to be discussed are dispensing methodologies and system options; determining methods for billing; dispensing fees and prior authorizations; and handling unused pharmaceuticals already dispensed to patients in long-term care facilities.

Effects of waste

The biggest reported issues associated with medication waste are excessive costs and environmental damage. CMS projects $2.3 billion in savings over five years and nearly $6 billion over the next decade from its short-cycle program.

Ecological savings also should be realized. Disposal methods of unused medications, especially controlled narcotics, are entering water systems because of complex and sometimes conflicting laws between the federal and state governments.

Studies have identified possible links of this medication waste to chemicals in water supplies and health problems in fish and birds living in pharmaceutical-contaminated water.

To get perspective on short-cycle dispensing as a solution, CMS consulted Cranberry Township, PA-based Millennium Pharmacy Systems because its short-cycle business model is well established. The company serves a customer base that encompasses more than 25,000 beds across the healthcare continuum.

“The traditional model is ridden with waste and inefficiency and makes an already challenging environment more difficult,” says Millennium CEO Richard Scardina. “This waste includes unused medications from traditional blister cards due to medication changes, discontinued meds or changes in resident status. In addition, this waste has added strain to nursing staff having to destroy or return medications, depending on state requirements.”

Leftover medications—especially narcotics—also can be vulnerable to theft, adds Beth DeLaHunt, RN, clinical product marketing manager for MDI Achieve.

“Regardless of the type of medication, there is the potential for theft and abuse of these medications, especially in the current economic climate where the destruction of medications is viewed by many to be wasteful,” she says. “This may result in rationalizing theft. [People may think,] ‘Since the drugs are going to be destroyed anyway, why not give them to someone else or take them for personal use?’”

If the pharmacy can take the medications back, there is generally a cost to restock them, in addition to the cost to fill the initial order, all from a single order. Short-cycle management helps reduce both risk and cost.”

A waste of time?

While short-cycle proponents have been vocal in their support for the regulatory mandate, not everyone has jumped on the bandwagon. Paul Baldwin, vice president of public affairs for Covington, KY-based Omnicare, isn’t convinced that current methods are inefficient or that short-cycle dispensing is needed.

“We have studied this issue in great depth and our results indicate the amount of medication waste for Part D beneficiaries is nominal at best,” he says. “For medications dispensed to Medicare Part D enrollees in nursing homes, the amount of drugs dispensed but not consumed is approximately 3.6% of the total value of drugs dispensed.  And considering that the typical Part D resident generally resides in a skilled nursing facility for over two years with little change to their chronic medication regimens, the Part D providers simply do not save enough from salvaged medication waste to offset the significant number of additional dispensing fees that the pharmacies would require.”

Industry-wide, Baldwin contends short-cycle dispensing “will result in a significant increase in workload for nursing home professionals without any offsetting benefit … and more importantly, this administrative burden will take staff away from performing activities that improve the quality of care for their residents.”

Although he struggles to find positives about the regulation, Baldwin did say that “the only clear opportunity we see is if the rule is limited to branded drugs that carry a value of more than $400 per prescription. According to our data, that is the only scenario in which the program results in cost savings to the federal government.”

Finding ‘a new way’

As the majority of long-term care providers get used to the ramifications of the new short-cycle pharmacy requirements, some facility operators, such as Salem, MA-based BaneCare, have already adopted a new system. Although still in the early stages of deployment, CEO Richard Bane is already convinced that it will save lives and money.

As a small regional operator managing three facilities around Boston, Bane says his short-term rehabilitation business has faced continuing challenges in reimbursement, regulations and operations. In moving to Millennium’s automated short-cycle medication system, the rationale behind it was “to do things safer and from a higher quality perspective,” Bane says.

“As we looked at medication administration, we found it had become financially challenging,” he continues. “In a more sophisticated post-acute care model, pharmacy costs have jumped and have become a budget-buster. And although our medication error rate is low, we wanted it to be zero. So we searched for a new way of doing things.”

As the transition to the new system commenced in November, Bane concedes that it was “rigorous” at times and that “switching pharmacy vendors isn’t as simple as changing your food vendor.”

Overall, though, he says he has been satisfied with the transition   to the operational stage.

Laurie Casale, BaneCare’s director of clinical services, says it has always bothered her “to see perfectly good bottles of medications destroyed” over the course of her 20-year nursing career.

The BaneCare switchover consisted of moving from paper-based manual processes to full automation, which Casale says took some initial adjustment by the staff. Yet for the most part, she says the transition was pretty painless and that the nurses “who complained the loudest at first now love it the most.”

Bane estimates that the new system will net an annual savings between 5% and 10%.

Switching from manual methods to automation can be intimidating, agrees Kasumi Oda, director of strategic marketing for Kelowna, BC-based Catalyst Healthcare. Still, she maintains that it doesn’t take long for the benefits to become readily apparent.

“For pharmacies that haven’t adopted automation, it’s a daunting change to go from older or no technology to a new paradigm for managing the complexities of short-cycle filling,” she says. “When they realize that the technologies, solutions and processes are already in place and that experienced vendor partners can help with the transition, they soon become confident that it’s just a matter of getting comfortable with a new way of doing things.”

From the February 2011 Issue of McKnight’s Long Term Care News