Site of Care Challenges for Health System Pharmacy: Risk and Opportunity

Perils of White Bagging

As specialty drug costs continue to rapidly increase, payers are quickly searching for ways to reduce this expense.  One fast growing trend among payers large and small is requiring hospitals to administer medications shipped from the insurer designated pharmacy to the health system. This practice is known as “white bagging”, where specifically high-cost drugs (biologics, immunomodulators and other specialty drugs to treat a growing number of chronic diseases) must be purchased by an outside plan-affiliated specialty pharmacy, and then shipped to the hospital to be administered to the patient.  While this practice reduces costs for payers and plan sponsors, it does not always equate to lower cost to the patient.

This practice bypasses many safety checks and balances that exist when drugs are procured, prepared, and handled internally within the hospital setting.  Evidence is quickly mounting that this practice leads to waste, delays in patient care, and medical errors.  This is especially the case with biologics used to treat chronic conditions and with chemotherapy.

In response to this trend, national associations including APhA, HOPA, AHA and ASHP are banding together to advocate with policymakers to prohibit health plans and pharmacy benefit managers from requiring white bagging of clinician-administered drugs.  Furthermore, several states have introduced bills intended to directly address white bagging in 2021.  Louisiana recently passed their bill, and it’s likely that similar efforts will follow in many more states based on their success.

Site of Care Optimization is Here to Stay

In addition to white bagging, alternative site of care strategies are increasingly being pursued by payers to reduce payments.  Such site of care optimization policies encourage patients to move away from higher-cost settings (such as hospital infusion centers) towards lower-cost settings such as physician’s offices, ambulatory infusion centers/suites, and even the patient’s home to receive specialty infusion medication.  When clinically appropriate, receiving these infusions in the home setting not only lowers the cost of care, it also provides additional benefits such as improved patient satisfaction and convenience, fewer disruptions to patient work schedules, decreased risk of exposure to nosocomial infections, and faster patient hospital discharge.

What can you do?

Payer mandates and benefit designs that financially incentivize the patient to receive high-cost infusion medications outside of the hospital in lower cost and more convenient setting are likely here to stay.  Most payers have already implemented or are in the process of implementing various approaches to direct high-cost infusion care outside of the hospital outpatient setting.  Visante recommends that pharmacy leaders take the following actions to maximize patient care, safety and convenience:

1. Get engaged. Support local and national efforts to address the practice of white bagging.
2. Take a bold stance on white bagging in your organization. Pass a firm hospital policy prohibiting this practice and collaborate with managed care contracting, medical staff and others to ensure this policy is complied with in all sites of care.
3. Collaborate with senior leadership and managed care contracting. Make them aware of the safety risks as well as the impact it has on the bottom line of the organization.  Advocate that current care models be reassessed.  Seek support to consider innovative shifts in care delivery (such as those proposed below).
4. Negotiate for the hospital’s specialty pharmacy to become in-network with payers for all pharmacy benefit patients served by the health system to ensure optimal continuity of care.
5. Move swiftly to create an internal home infusion therapy program with freestanding infusion suites within the organization’s pharmacy enterprise.

Developing and implementing a home infusion strategy for your health system is similar to the level of importance that starting a specialty pharmacy program was ten years ago.  Payers are starting to mandate home infusion as a preferred site of care for specialty infusions and requiring that these services be paid separately from the traditional hospital contract.  Pharmacy leaders who are proactive in establishing a comprehensive internal home infusion therapy program will be well positioned for success in tomorrow’s marketplace, as this strategy improves patient care and convenience, and presents a new source of revenue for the organization.

Visante consultants have deep contemporary expertise in site of care mitigation and all aspects of internal specialty pharmacy and home infusion therapy program business planning and implementation.