CMS Separation Rule (Updated 3/5/2012)

17 replies [Last post]
Joined: 09/02/2010

The Centers for Medicare and Medicaid Services (CMS) issued a proposed rule (link to excerpt) during the first week of October entitled "Medicare Program; Proposed Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs for Contract Year 2013 and Other Proposed Changes; Considering Changes to the Conditions of Participation for Long Term Care Facilities." The deadline for comments is 5 pm EST, December 12, 2011. ASCP will be submitting comments to CMS on this proposed rule. Read ASCP's summary of the rule.

This forum is available for ASCP members as well as non-members to discuss the impact of the rule. 

Joined: 01/19/2011
CMS Proposed Rule

CMS still has not released an update at this time. The proposed timing for an update is still at the end of March. Please visit the the Policy and Advocacy section of the website to see the ASCP position statement on the proposed rule.

Joined: 10/23/2011
AHCA Reply summary

I found AHCA's comments to make more sense than ASCP's

quoting from their website:

AHCA submitted comments to CMS on the Federal Register notice in which they discussed a proposal to require consultant pharmacists to nursing centers be independent of the dispensing pharmacy. The reasoning CMS used for considering such a requirement was based on a potential conflict of interest on the part of the consulting pharmacist when associated with the dispensing pharmacy, and the possibility for kick-backs and incentives from pharmaceutical companies, rather than focusing on what is best for the resident/patient. As well, CMS expressed concern that using consultant pharmacists associated with dispensing pharmacies resulted in potential overuse of antipsychotics. This was not a proposed rule, but a several-page discussion about the value and practicality of implementing such a requirement.

AHCA submitted comments to CMS on the Federal Register notice in which they discussed a proposal to require consultant pharmacists to nursing centers be independent of the dispensing pharmacy. The reasoning CMS used for considering such a requirement was based on a potential conflict of interest on the part of the consulting pharmacist when associated with the dispensing pharmacy, and the possibility for kick-backs and incentives from pharmaceutical companies, rather than focusing on what is best for the resident/patient. As well, CMS expressed concern that using consultant pharmacists associated with dispensing pharmacies resulted in potential overuse of antipsychotics. This was not a proposed rule, but a several-page discussion about the value and practicality of implementing such a requirement.

Many thanks to all who provided comments for inclusion in AHCA’s response. A special thanks to the Pharmacy Workgroup, who not only provided detailed comments, but also educated me about this important issue.

Key points made in AHCA comments:

Agree that it is important to minimize the potential for a conflict of interest on the part of the consultant pharmacist.
Current regulations and Guidance to Surveyors provides adequate support for CMS to deal with potential conflict of interest.
Provided 6 alternative suggestions rather than requiring an independent pharmacist in order to minimize a potential conflict of interest.
Provided data from the one state that requires an independent pharmacist that suggests “independence” does not necessarily result in reduction of use of antipsychotics.
Listed (with supporting information) advantages to having the consultant pharmacist associated with the dispensing pharmacy.

Joined: 09/02/2010
Where ASCP Stands

If you haven't already done so, I would suggest reading the ASCP President's message which appeared in the January 2012 edition of ASCP Update.

In this message, Penny Shelton, PharmD, CGP, FASCP, talks about where ASCP stands on this issue.

Definitely worth a read!

Joined: 10/23/2011
Where does ASCP stands????

The ASCP "stand" while excellent at defending CPhs professionalism was one of diplomatic neutrality and non-committal at best as far as in favor or against independence. I would suggest the drafters read Prince Machiavelli's stand on neutrality.

Joined: 06/02/2011
CMS Rule Change

The Center for Medicare and Medicaid Services (CMS) proposed regulation change which would mandate the separation of consultant pharmacy services from the companies that provide pharmaceutical products to long-term care residents is a game changer for pharmacists. If the rule, as proposed today, is adopted by CMS, the services provided by pharmacists could no longer be bundled and bartered with the distribution and dispensing of medications. The services offered and provided by long-term care (LTC) pharmacists would stand alone, independent of the distribution of drug products.
This proposed rule change has far reaching implications for all pharmacists, not just those practicing in the long-term care arena. The conflict of interest that was exposed in the long-term care space clearly is the impetus for the proposed rules change but, as was pointed out by many in the overflow crowd attending the Town Hall Forum held on this topic during the ASCP Annual Meeting in Phoenix earlier this month, why stop at LTC? If this conflict exists in LTC, doesn’t it exist in community pharmacy, specialty pharmacy and other settings? It clearly does but that is material for a future discussion.
The point to be made now with this proposed ruling is that if CMS is going to make this change, then pharmacists need to be recognized as care providers and compensated at a rate that will support the delivery of comprehensive medication management services to patients. This should be done for all pharmacists providing the service, regardless of where the service is delivered, and should not be limited to those practicing in LTC or any other setting. Imagine how the practice of pharmacy could change when the practice of pharmaceutical care is recognized as a reimbursable service and compensated on the merits of the value it adds to the care of patients, without conflict or without having drug product sales financially supporting the service providers. These changes are necessary to care for all those patients who could benefit from medication management services.

Joined: 12/01/2011
LTC consultant pharmacy separation proposal

If this proposal becomes CMS guidelines for LTC pharmacies, then who ultimately will be billed for the consultant pharmacy services? I work at an independent LTC pharmacy where I work as a consultant/staff pharmacist. It is very difficult for me to imagine how an independent consultant pharmacist would have the same effectiveness as an in house pharmacist when it comes to the consulting that we are required to do at these facilities. I have no experience in the "corporate" world of LTC pharmacy practices and find it hard to believe that pharmacists are acting unethically because they are receiving bonuses from drug companies. That is not why we made the sacrifice we did in order to become pharmacists.
I do not see how the separation will prevent drug companies from still being able to corrupt our profession, their target audience will be the only thing that has changed.
Where CMS should be concerned is at the level of our hospitals. I can't understand how patients in our LTC facilities can be admitted to these hospitals and upon discharge, return to their respective facilities with "hospital formulary" medications that have been switched. Their generics to brands (therapeutic equivalent), newly prescribed brand name meds (where we have less expensive therapeutic equivalents), etc.

Joined: 12/14/2010
Separation of Pharmacist Consultant and Provider Services

When I wrote this regulation (while a pharmacist surveyor), which became law in June 1991, independent consultants already were providing services in many long-term care facilities throughout the State of New Jersey. Many provider-consultants provided their "consultant services" for free - in exchange for having the distributive side of the business, which was and still is much more lucrative. These services were often provided from the pharmacist provider's store, where there was no access to physician orders, nurses' and physicians' notes, medication administration records, dietary notes, specialty consults, and most importantly, no access to patients. Providers were already giving away med carts and fax machines for the business,and the consultant services were the final straw. There was then and there certainly is now a conflct of interest when a provider performs his or her own consultative review. From my 30+ years of experience in the regulatory and enforcement fields, you cannot check yourself. Many nursing facility administrators realized this 20 years ago when New Jersey became the first - and only - state to warrant separation. Interestingly, when the regulation to separate was proposed in the NJ Register, there were only 3 comments: support from the State Medicaid agency; and two non-supports, both from pharmacy provider-consultants. One of those consultants later became an ardent spporter of separation. Separation is long overdue, and regardless of whether in rural or urban areas, the market will provide the consultants.

Joined: 10/21/2011
CMS rule proposal

Our Acute / Skilled Care Facility is part of the hospital but follows CMS LTC regs. Since the hospital pharmacy provides medications, does this mean an outside consultant would be required? Whenever we have surveys, the question is always asked; since your average length of stay is 7 days and the regulations require a medication review monthly, how do you ensure quality care for every patient? The answer is our pharmacists review every medication as the order is placed instead of monthly reviews. If an outside consultant is required, this process would be impossible. Like the Indian Health Service, hospital based acute skilled programs should be exempt.

Joined: 01/03/2011
Short Stay Residents


Your facilities situation is not uncommon to many "REHAB" type facilities.

An outside consultant is not 'IMPOSSIBLE', CMS regulation is for AT LEAST monthly review....I frequently do 'IMMEDIATE MEDICATION REVIEWS' for facilities via fax...and electronic records systems are becoming more common all the time.

I see no reason your facility should be exempt, it creates an unnecessary loophole...and we have far to many such loopholes as it is.

Joined: 01/30/2011
Frame of mind of CMS

I agree with one of the posts that such a proposed rule is long overdue.

Like physicians, pharmacists have gradually emerged from being the human automatons of drug dispensing to knowledge-based service providers. And, similar to all business activities in any society, without the financial incentive and support, a business activities, whether it's a service or product, will wither.

Using smart phone business as an example. There will not be innovation in the smart phone world if there is no money to be made. This pragmatic bottomline reality is present in every activity in a society. Consulting service piggy-backed as and ADD-ON to drug selling has long diminished any initiative for consulting pharmacy service to expand and turn itself into an independent force, envied by competitors and respected by patients and colleagues. If Apple knows that only $1 profit can be made from each iPhone, one would not expect much initiative to improve -- or to even put a product in the market. You also wouldn't have seen other companies jump into the market if there is no profit.

What the CMS needs to include more is how the consultant pharmacists can be rewarded with good clinical outcomes. Namely, a feasible cost and revenue stream structure that encourages competition in quality of service. This is not new. It has been implemented with physicians for a number of years. As pharmacists, we need to find ways to transform our daily work, our livelihood, into a value-added service in the supply-chain of healthcare delivery rather than letting it slid into a commodity.

When pharmacists feel too comfortable with status quo of making money from dispensing, it may mean soon all of us will turn into automaton relics of the past.

Technicians, robots and physician assistants are all lower cost alternatives. Let's sleep on that thought before some of us feel too comfortable.

Joined: 03/10/2011
Kudos to you!

Thank you for an excellent post. It is right on the money!

Joined: 01/23/2011
Consultant Pharmacist as Indepedent contrator for LTC

My name is Luba Andrus, I am a registered pharmacist with a masters in Health Law from Loyola Law School.

Regarding CMS - 4157- P, initiating the separation of consultant pharmacists from pharmacy providers and pharmaceutical companies. I have been a pharmacist since 1972 in the Chicago area. In my years as a pharmacist I have managed clinical pharmacies, owned and operated a community pharmacy & DME business, director of pharmacy for a large Catholic hospital who purchased my business and in the past 15 years worked as a consultant in long term care.

I strongly disagree with CMS 4157-P. As a consultant, clinically a "gatekeeper" for this industry. Consultants provide medical, ethical and regulatory advise to the long term care industry.

What is the advantage to Long Term Care? Higher costs?! Independents cannot provide services & absorb the costs of chart review, travel & educational programs without support. With new cutbacks in Medicare & Medicaid and rising costs to do business, consulting will become impossible for current pharmacists as well as new pharmacists. The goal of consultant pharmacists is the quality of care and quality of life for the residents of long term care.

Please vote against and do not allow passing of CMS 4157-P.

Thank you
Luba Andrus, B.S.,R.Ph., M.J.

Joined: 01/03/2011
Independant Consultant RPhs


Thank you for your opinions, although I happen to object with every argument you make.

I am a Consultant Pharmacist, half of my contracts I conduct independantly, half are through a LTC Pharmacy.

The ability of pharmacists to reduce health care costs and improve patient care has been verified by studies time and again....THIS IS THE ENTIRE REASON CMS REQUIRES CONSULTANT PHARMACIST SERVICES.

Pharmacists have ALWAYS been 'GATEKEEPERS' and always will be until considered as 'PROVIDERS'. As experts in pharmaceutical care, ensuring proper therapy or 'GATEKEEPING' is a central role.

Will the rule increase costs in some areas - YES - because they are done for FREE in some areas or for riduculously below FREE MARKET VALUE. You should be well aware of this with your experience.

How am I to compete with FREE consulting? How am I to compete with LTC pharmacies that tell the facility to 'NAME YOUR PRICE' on consulting services?

An estimated 90% of consulting contracts are held by 3 LTC pharmacy organizations. How does this correlate to a FREE MARKET SYSTEM?

Independant consultants CAN absorb the costs, and PROFIT....if we don't have to compete with BELOW FREE MARKET VALUE servicing by LTC Pharmacies.

You get what you pay for.....LITERALLY.

The proposed rule will open LONG OVERDUE opportunities for small business, control costs via FREE MARKET COMPETITION, and most importantly provide UNBIASED CONSULTANT PHARMACIST RECOMMENDATIONS.

Thank you to CMS and the others who seek to represent the truth of the consulting world rather than seeking to misinform and create fear mongering.

Dr. LaCore, PharmD, RPh

Joined: 06/15/2011
reply to Luba's comment

Unfortunately your comments show how little you grasp in spite of your "years". Firstly, this is a proposed rule to go into the Federal Register that is open to comment from interested parties. There is no "vote" and there is nothing that is "passed". So please do your homework before commenting.
Secondly, you have no concept how a business model works with consulting. Your last experience in "independent consulting" was 15 yrs ago. Times have changed. The State of NJ currently mandates separation from the provider. Would you care to comment how the multitude of consultants there survive? NJ has Consultant companies as well as individuals that privately consult and have been doing it sucessfully for >25 years. Yes there will be unintended consequences, but they can be managed.
Do not fear what you do not know or understand. Learn instead.

Joined: 10/23/2011
erucki enlighten us please...

... as to what is the framework of the future business model you allude to?

The proposed rule change has at its core a "CMS model", not a NJ model, that seems unfair and untenable (read my post below from 10/23).

Are NJ CPh's making ONLY $52/hr?? As suggested in the CMS proposal/study.

While the NJ separation law has been in place since 1990-91 I was not aware that there was an underground railroad of CPh's looking for their freedom in NJ.

Are the NJ emancipated consultant pharmacists mandated to be free from any association with Drug Manufacturers? NO!

"If the facility does not maintain an in-house pharmacy, the facility shall appoint a consultant pharmacist who is not also the director
of pharmaceutical services or pharmacist provider and does not have
an affiliation with either the director of pharmaceutical services or the pharmacist provider" from the NEW JERSEY REGISTER, MONDAY, DECEMBER 3, 1990.

Joined: 03/17/2011
Independant Contractor for LTC ???? I Think Not.

Your words would have more credibility if you were an Independant Consultant, but you have been far from being an Independant Consultant.
I understand why you are against the passing of CMS 4157-P after your 11 years as a Director at Omnicare, and your current affiliations with multiple Pharmaceutical companies (Dey,Boehringer-Ingelheim,Roche,Daiichi,Wyeth,Forest,Sanofi Aventis, Eisai)in which you are deeply entrenched in the Corporate world of Pharmacy.

This proposed rule change is long over do. These large mega-pharmacies (Omnicare, Pharamerica,KPS, etc.) have been using their size and volume to offer “inexpensive” Consultant services as an inducement for attaining pharmacy service contracts. Evidence of this fact was noted by the steep drop in stock prices by Pharmerica and Omnicare when this proposed rule change came out.
Corporate Pharmacy Provider Consulting monopolizes the consulting industry, and does not allow Independent consultants to complete with fair market value of services with the large mega-pharmacies, devaluating Consultant Pharmacist's services.

I am often contracted by an independent company that is brought in to troubles facilities with bad survey outcomes, to act as an independent consultant to help correct facility deficiencies. Most of these problematic surveys are found in LTC homes serviced by Omnicare or Pharmerica. The majority of these problems stem from poor Consultant Pharmacist oversight, as these Consultants did not have enough time to conduct thorough reviews. Several Pharmacy providers have their Consultants review patients MAR’s (medication administration records), and not review the entire patient chart (even though this is the requirement). Misssing important lab values and assessments, as well as nursing notes and consults from other disciplines. What is done by these corporate consultants can hardly be considered a complete job. Most are overworked with heavy bed counts each month, not allowing them to do a thourough job.
It's time wake up and realize that most Consultant Pharmacists have some affiliation with Omnicare,Pharmerica, or KPS and that corporate interests come first, placing good patient care a distant second.
It's time true Independant Consultant Pharmacists are unshackled from their Corporate Overseers influence and get back to the real business of providing sound patient care.

Joined: 10/23/2011
credibility is not the issue

The fact is that there are many excellent and credible consultant pharmacist that perform well inspite of working for a LTC pharmacy provider. If the problem stemmed from poor consulting then where's the outcry from the nursing homes that are serviced by these subpar Consultant Pharmacists.

If this rule passes there will be a lot of Consultants that are not going to be interested in going indipendent for what CMS is calculating to be the CPH going rate of estimated “hourly rate of $51.53 for independent consultant pharmacist that includes fringe benefits”.

Yes, I have only worked for LTC pharmacy providers - for over 30 years. And the last time I got paid $52/hr was over 5 years ago and that does not take into account, gas reimbursement/car allowance and the usual health 401k benefits.

If the rule further reduces the workload to 40charts/day then that reduces the potential salary even more!

True, if this rule goes into effect I won't be out of a job as there are plenty of nursing homes that have expressed their desire for my services but will not want to be saddled with having to change pharmacy provider just to get me as their Consultant.

They would be able to keep their pharmacy and get me but for how much $$$$.

Additionally, under this rule I would not even be able to take a part time position dispensing for an LTC pharmacy provider to supplement the income coming from the nursing homes.

The rules are not intended to unshackle anyone. Independent Consultants will still have to compete with all the "new" freed Consultants that were enslaved by the LTC pharmacy providers.

It will be a competition for the nursing home contracts that will be worth less than what these "new independents" were making before they were emancipated by CMS.

We will compete for funds that nursing homes are not looking to part with. We all know of nursing homes that fall behind in paying their pharmacy bill - I guess a collection agency will be required for some of these.

YES there are BIG differences between CPH, Physicians, ARNPs, and Rehab personel.

THEY actually generate revenue!! Pharmacist DON'T, we generate cost!

Sure we can reduce drug cost and reduce negative outcomes - that is the intention of this rule change not "FREEDOM FOR INDEPENDENTS"

Truth be told if CMS really saw the value of Consultant pharmacist performing as they desired they would give us the privilige of billing CMS for our services or at least make our work measurable in the MDS and increase the nursing homes RUG rate to subsidise our cost instead of asking the nursing homes to carve another slice from their ever diminishing pie.

Of course there are other health care professionals providing fine services as independent consultants to the nursing homes. RDs come to mind and will probably be the ones that we will be compared to when it comes to business arrangements with nursing homes.

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