Source Overview
This article is compiled from the broader VBC resource document and is intended to stand alone for this topic.
Chronic Care Management (CCM)
Chronic Care Management is a formal Medicare program (established 2015) that pays for ongoing care coordination for patients with multiple (typically 2 or more) chronic conditions. The service involves monthly follow-up with patients to ensure their conditions are managed – including medication management, self-care support, and coordination among providers. Each enrolled patient has a comprehensive care plan, and a clinician or care team member checks in regularly (often by phone).
Alignment with VBC: CCM is practically built for value-based care. It targets the 5% of patients who drive \~50% of costs – those with multiple chronic illnesses – and provides them extra support between doctor visits. By doing so, CCM aims to prevent complications and costly acute events. Medicare’s own analysis of the first two years of CCM found meaningful improvements: hospitalizations decreased nearly 5% and ED visits by 2.3% for Medicare beneficiaries receiving CCM, compared to similar patients not in the program[26]. Patients in CCM also had higher rates of preventive services and reported better satisfaction[27]. These outcomes translate to cost savings and better quality scores, directly serving VBC goals. In value-based contracts (like ACOs or capitated arrangements), reducing hospital and emergency utilization via CCM can generate significant savings. Quality metrics such as diabetes A1c control, blood pressure control, or medication adherence tend to improve with the frequent touchpoints that CCM provides.
Pharmacy’s Role: Pharmacists can be deeply involved in CCM programs. While Medicare requires a billing provider (MD/DO, NP, PA, etc.) to oversee and bill for CCM (CPT 99490 and related codes), the actual work can be done by clinical staff under general supervision – and this includes pharmacists in many settings. In practice, some physician groups and clinics hire or contract with pharmacists to handle the medication-related aspects of CCM. Pharmacists perform monthly medication reviews, monitor for interactions or non-adherence, and adjust therapies under collaborative practice agreements. They also provide self-management education (e.g., how to use inhalers correctly, dietary advice for hypertension, etc.). Community pharmacies have started to explore offering CCM services in collaboration with local practices; for example, a pharmacy might enroll patients into a CCM program and make the required monthly contacts, documenting in a shared care plan platform. By doing this, pharmacies help ensure continuous care for chronic disease patients and free up primary care providers’ time. Economically, a physician practice might share a portion of the CCM reimbursement with the pharmacy or pay the pharmacist for their time – a win-win since the service is reimbursed and the patient gets high-quality medication management. In terms of performance, better medication adherence and regimen optimization through CCM leads to clinical improvements (like lower A1c in diabetes or fewer COPD exacerbations). Indeed, research shows CCM participants have better medication adherence and receive more guideline-concordant care than those not in CCM[26]. For pharmacy owners, participating in CCM programs can open a new revenue stream and solidify their role on the care team.
Example: One case study described a clinic-pharmacy partnership in which a pharmacist was embedded to provide CCM for complex patients. Over a year, the clinic saw a reduction in all-cause hospitalizations among those patients (from 310 to 296 per 1,000, \~4.5% drop, consistent with CMS findings)[26]. Patients also had more up-to-date screenings and vaccinations. The pharmacist, acting as a care manager, often identified medication issues (duplications, high-risk meds) and resolved them, contributing to safer care. This example underlines how CCM programs leverage pharmacists to achieve the triple aim – better health, better care experience (patients valued the monthly check-ins), and lower cost through avoided acute events.
U.S. Policy and Regulatory Frameworks Supporting VBC
Over the past decade, U.S. health policy has aggressively pushed toward value-based models, creating frameworks and incentives that encourage all healthcare providers – including pharmacies – to engage in VBC. Key developments include:
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Medicare and CMMI Initiatives: The Affordable Care Act (2010) established the Center for Medicare & Medicaid Innovation (CMMI) to test new payment and delivery models. Through CMMI, Medicare has piloted numerous VBC models (“Innovation Center models”) aimed at improving care coordination and outcomes[8]. For example, Accountable Care Organizations (ACOs) in Medicare Shared Savings Programs and CMMI demonstrations hold groups of providers accountable for the cost and quality of care for a population. Providers in ACOs share in savings if they meet quality and cost targets. Pharmacists often participate in ACO care teams to help manage medications, close care gaps, and improve metrics like medication adherence or readmission rates[9]. CMMI has also tested primary care models such as the Comprehensive Primary Care Plus (CPC+) and Primary Care First, which provided care management payments to primary care practices. In these models, practices were required or encouraged to integrate comprehensive medication management. Notably, primary care clinics in CPC+ Track 2 had to provide comprehensive medication management (CMM) for high-risk patients (e.g. those recently discharged or in chronic care management)[10]. Many practices hired pharmacists or collaborated with pharmacies to fulfill this requirement[11]. This illustrates how CMMI models explicitly recognize pharmacy services as a component of advanced primary care.
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CMS Value-Based Programs: The Centers for Medicare & Medicaid Services (CMS) has implemented several value-based purchasing programs. While some target hospitals (e.g. Hospital Readmissions Reduction Program, Hospital Value-Based Purchasing), others affect ambulatory care and indirectly involve pharmacies. For instance, Medicare Advantage (Part C) and Part D Star Ratings include quality measures tied to medication adherence and MTM/Comprehensive Medication Review (CMR) completion, and Medicare Advantage includes preventive care measures such as adult immunization status[53][54]. Health plans have a strong incentive to improve these metrics to achieve high star ratings. Consequently, many plans partner with pharmacies on adherence programs, MTM, and immunization drives, even offering performance bonuses to pharmacies that help improve medication-related quality measures[12][13]. Another example is MACRA’s Quality Payment Program (QPP) for Medicare Part B providers, which introduced Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APMs). Under MIPS, clinicians are measured on quality and improvement activities – some of which involve medication management (e.g. controlling diabetes or performing medication reconciliation post-discharge). Clinicians in APMs like ACOs or advanced primary care homes are exempt from MIPS but take on outcome-based accountability. In both cases, providers have financial incentives to collaborate with pharmacists to achieve medication-related quality goals (such as optimal chronic disease control and closing preventive care gaps). In short, Medicare’s shift to value means physicians, hospitals, and plans are increasingly motivated to utilize pharmacy services to succeed in these programs[14][15].
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CMMI Enhanced MTM Model: A milestone specific to pharmacy was the Part D Enhanced Medication Therapy Management (MTM) model (2017–2021). This CMMI pilot gave participating Medicare drug plans additional payment incentives and regulatory flexibility to innovate their MTM programs[16][17]. Plans could stratify and target patients more creatively and offer more intensive MTM interventions than the standard Part D MTM requirements. They received a $ per-member-per-month payment to fund MTM services and could earn a performance payment based on outcomes[18]. The goal was to align incentives so that stand-alone drug plans (which normally only bear pharmacy costs) would invest in MTM that could reduce overall medical expenditures[19][20]. Several major insurers participated, leveraging networks of community pharmacists to provide personalized MTM and care coordination[21][22]. Early results indicated that more beneficiaries received medication reviews and that interventions were better tailored to risk level[23]. While the full five-year evaluation is complex, the Enhanced MTM model demonstrated the potential for MTM to improve therapeutic outcomes and reduce costs by optimizing medication use[16]. This model signaled to the industry that Medicare is willing to reward pharmacies for value delivered (in this case, avoided downstream costs due to better medication management).
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Regulatory Enablers for Pharmacy in VBC: Policymakers have also addressed legal barriers to pharmacist participation in value-based arrangements. In 2020, HHS’s Office of Inspector General proposed regulations around new safe harbors to the federal Anti-Kickback Statute for value-based payment arrangements. A key question was whether pharmacies could be included as “value-based enterprise (VBE) participants” eligible for these safe harbors. NACDS (National Association of Chain Drug Stores) strongly advocated that excluding pharmacies would be a mistake, given pharmacies’ critical role in care coordination and medication management[24][15]. Ultimately, the final rule did allow pharmacies as VBE participants, which means pharmacies can legally enter into gainsharing, shared savings, or care coordination arrangements with hospitals and physician groups without violating anti-kickback laws (as long as certain conditions are met). This change removed a major legal impediment, enabling pharmacies to formally contract in innovative value-based payment models (for example, a pharmacy could receive bonus payments from an ACO for hitting medication adherence targets or reducing hospitalizations in a shared patient population). At the state level, many states have expanded pharmacist scope of practice and provider status, allowing pharmacists to bill for clinical services (especially under Medicaid or commercial plans). For instance, some states reimburse pharmacists for comprehensive medication management or chronic care services, and nearly all states now allow pharmacist immunization authority for adults (and many for adolescents). During the COVID-19 pandemic, the federal PREP Act authorized pharmacists to provide and be reimbursed for a broader range of services (COVID testing, vaccinations for ages 3+, etc.), underscoring the value of pharmacy-based care in public health. All these regulatory changes are enablers that integrate pharmacies into the VBC ecosystem by recognizing and paying for their contributions beyond dispensing.
Table 1: Key Policies and Programs Enabling Value-Based Care and Pharmacy Integration
| Policy/Program | Description & Impact on Pharmacy |
|---|---|
| Medicare ACO Models (MSSP & CMMI ACOs) | Providers share savings for managing cost & quality for a population. Pharmacists often included in ACO care teams to improve medication use, adherence, and chronic disease outcomes, helping the ACO meet quality metrics.[9] |
| Comprehensive Primary Care Plus (CPC+) | Multi-payer advanced primary care model (2017–2021) with care management fees and performance payments. Required participating practices (Track 2) to provide comprehensive medication management to high-risk patients, leading many clinics to embed pharmacists[10]. Demonstrated support for team-based care including pharmacy. |
| Merit-based Incentive Payment System (MIPS) (MACRA/QPP) | Medicare Part B provider payment system rewarding quality and improvement activities. Medication-related quality measures (e.g. medication reconciliation, diabetes control) encourage providers to collaborate with pharmacists to achieve higher scores. Poor performance can mean penalties, so there is incentive to utilize pharmacy services for better outcomes. |
| Part D Enhanced MTM Model (CMMI Pilot) | 5-year pilot in stand-alone Medicare drug plans that offered up-front payments and performance incentives for robust MTM programs[18]. Encouraged plans to engage community pharmacies in intensive MTM and track outcomes (adherence, cost savings). Demonstrated improved medication reviews and was associated with better alignment of financial incentives for MTM[16][17]. |
| Anti-Kickback Statute VBE Safe Harbor | Federal rule change (2020) allowing pharmacies to be “value-based enterprise” participants[24]. This legal safe harbor permits pharmacies to enter into value-based payment arrangements (e.g. outcomes-based contracts, shared savings) with other providers without AKS liability. It facilitates closer financial integration of pharmacists in care teams focused on value. |
| State Pharmacist Provider Status & Scope | Various state laws recognize pharmacists as providers in Medicaid or mandate insurer reimbursement for pharmacist services (e.g. MTM, contraceptive services, point-of-care testing). Expanded scope (e.g. prescriptive authority under protocols, immunizations to adolescents) increases the clinical services pharmacies can offer, aligning with preventive and primary care goals of VBC. |
| Medicare Care Management Fees (CCM, TCM, etc.) | Medicare introduced new billing codes for care coordination: Chronic Care Management (CCM) in 2015 (monthly fee for managing patients with multiple chronic conditions) and Transitional Care Management (TCM) in 2013 (one-time fee for managing a hospital discharge transition). These enabled providers to get paid for services often involving pharmacists or pharmacy-like activities (medication reconciliation, patient follow-up). Pharmacists can contribute under physician supervision to delivering CCM or TCM services, integrating pharmacy in reimbursed care management workflows. |
| Preventive Services Incentives | Medicare and other payers increasingly emphasize preventive care (e.g. vaccines, screenings) in value programs. Pharmacies have been empowered (through regulations like the PREP Act and standing orders) to provide immunizations and certain screenings. Plans often count immunization rates in their quality measures, thus pharmacies administering vaccines directly support providers’ and payers’ value-based performance metrics. |
Table 1: Summary of major policies and programs that support value-based care in the U.S., including those that explicitly incorporate or enable pharmacy services. These frameworks have collectively moved the system toward one where pharmacies are expected and incentivized to deliver more clinical care (medication management, coordination, prevention) in alignment with value-based goals.
Structural and Operational Challenges for Pharmacies in VBC
While the opportunities are significant, pharmacies face a number of challenges and barriers when engaging in value-based care models. Transitioning from a volume-driven model to a value-driven one is not trivial. Key challenges include:
1. Reimbursement and Provider Status: Perhaps the biggest structural challenge is that pharmacists are not universally recognized as healthcare providers for reimbursement under federal law (Medicare). This means they often cannot directly bill Medicare for services (other than limited cases like MTM under Part D or incident-to physician billing). As a result, securing payment for pharmacy clinical services can be cumbersome. Pharmacies may need to partner with a billing provider (physician/clinic) or rely on subcontracts with payers. This adds complexity and sometimes limits the scalability of programs. Some value-based contracts pay pharmacies a per-member-per-month care management fee or outcome-based bonus, but negotiating those deals is complex and typically feasible only for larger entities or networks. Smaller independent pharmacies might lack the resources to pursue contracts and thus find it hard to get paid for services outside dispensing. Until pharmacists achieve provider status in Medicare (efforts are ongoing in Congress), this barrier will persist. That said, there has been progress with state provider status laws and creative billing arrangements, but it remains a top challenge that pharmacies have to navigate administratively and legally to partake in VBC payments.
2. Data Integration and Technology: Value-based care thrives on data – tracking patients, measuring outcomes, identifying gaps in care. Pharmacies often operate on separate information systems from the rest of the healthcare system. Integrating pharmacy data (e.g., fills, adherence info, clinical notes from an MTM consult) with physician EHRs or payer databases is challenging. While standards like the Pharmacist eCare Plan have emerged to facilitate sharing medication-related care plans, many pharmacies still struggle with interoperability. Without seamless data flow, it’s harder to coordinate care or to demonstrate the pharmacy’s impact. For example, if a pharmacy identifies a therapy change but that doesn’t get communicated to the PCP, care fragmentation continues. Additionally, measuring outcomes typically requires access to medical claims or records (to see if an intervention lowered hospitalization rates, for instance). Many pharmacies lack the analytic tools or access to do this, making it hard to quantify their value to payers. Investing in health IT, like population health platforms or secure messaging with clinics, can be expensive and technically daunting for pharmacies. Realistically, pharmacies will need to forge IT connections (perhaps through pharmacy management system upgrades or third-party platforms) to fully participate in VBC networks.
3. Workflow and Staffing: Implementing services like CCM or RPM means pharmacies must take on new workflows that are quite different from traditional dispensing. Time and staffing constraints are a major operational challenge. Most community pharmacies are already busy with prescription volume, and adding patient coaching calls or comprehensive med reviews requires dedicated pharmacist time. Many pharmacies report not having enough staffing or overlapping pharmacist coverage to do these clinical services without disrupting dispensing operations. Hiring additional pharmacists or technicians to support value-based services is a financial risk if the return is not immediate. It can also be hard to justify if reimbursement is uncertain or comes much later in the form of bonuses. There’s also the need for staff training – not all pharmacists (especially those who’ve been in purely dispensing roles for years) feel comfortable with delivering clinical interventions or using new billing codes. They may need training in motivational interviewing, chronic disease management guidelines, documentation practices, etc. Some owners fear that pushing too hard into clinical services could negatively impact prescription throughput or customer service on the retail side if not managed carefully. In essence, pharmacies must re-engineer some processes to fit these services in – for example, scheduling dedicated “clinic hours” where a pharmacist is free from dispensing duties to perform MTM consultations. Finding that balance and making it financially viable is a challenge.
4. Financial Risk and Uncertain ROI: Value-based care often implies taking on some form of risk or at least investing up front for a payoff later. For independent pharmacies especially, cash flow is a concern. If a pharmacy joins a value-based contract where payment is contingent on year-end outcomes, they have to invest resources now (spending time on patient services, documentation, etc.) without a guarantee of immediate revenue. The promised bonus might come 12 months later and depends on hitting targets that could be influenced by factors outside the pharmacy’s control. This uncertainty can deter pharmacies from jumping in. Traditional dispensing gives a fairly predictable margin per script (albeit slim these days). Value-based payments are new and sometimes complex to understand or predict. Pharmacies might be wary of arrangements that don’t pay for effort if outcomes aren’t achieved (“what if we do everything right but a few complex patients still get hospitalized and we miss the target?”). Also, calculating the ROI of a service can be tricky. For example, how much staff time and salary to dedicate to an MTM program vs. how much in bonus or improved reimbursement will it bring? Many pharmacies lack sophisticated accounting to measure this, which makes it hard to justify internally. Overcoming this challenge often requires pilot testing on a small scale, or joining a network like CPESN that can distribute risk and provide some upfront funds or resources.
5. Regulatory and Scope Limitations: Even though pharmacists’ scope has expanded, there are still limitations varying by state. Some states might not allow pharmacists to independently adjust therapy (which limits the extent of impact they can have without physician sign-off). Certain services, like point-of-care testing and initiating therapy (e.g., test-and-treat for flu or strep), are allowed in some areas and not others. This patchwork can be frustrating in multi-state pharmacy organizations and can limit the services a pharmacy can offer as part of a value model. Furthermore, incident-to billing rules in Medicare require certain supervision and documentation that can be burdensome. If not done correctly, there’s risk of audits or denial of payments, which makes some pharmacies shy away from using those billing mechanisms.
6. Measuring and Proving Outcomes: To succeed in VBC, pharmacies have to prove their value with data. This means tracking outcomes like adherence rates, clinical values (BP, A1c), or utilization (hospital/ED events). Pharmacies traditionally measure prescriptions dispensed and maybe generic dispense rates or inventory turns – completely different metrics. Shifting to measuring clinical outcomes is a new competency to build. Additionally, gathering the needed data (e.g., knowing if your patient was hospitalized) may require connectivity to provider or payer systems. Some pharmacies rely on patient self-report or whether they stopped coming in (imperfect measures). Without robust data, pharmacies might be doing great work but unable to document it effectively to payers, which could result in under-recognition or underpayment. There’s also the challenge of attribution – if a patient is seeing a pharmacist and also going to doctor visits and maybe a nurse case manager calls them, who gets credit for the outcome? Payers might be hesitant to attribute an outcome to the pharmacy’s intervention alone. This can complicate performance evaluations and cause disputes in value-based arrangements if not clearly defined.
7. Change Management and Culture: Implementing value-based care is not just a technical change, but a cultural one. Pharmacies have to transition their business culture from one of primarily product delivery to one of care delivery. This involves everyone on the pharmacy team – technicians might need to take on expanded roles (like gathering data for the pharmacist, making initial outreach calls, handling documentation in new systems), and pharmacists need to embrace more clinical patient interactions. There can be resistance to change (“we’ve always done it this way” mentality). Owners must champion the vision that these services are the future and worth the effort. Additionally, aligning the whole team so that even front-end staff understand why the pharmacist might not be readily available at times (because they’re doing a CMR in the office, for example) is important to avoid internal frictions. Essentially, pharmacies need to adopt a patient-centric, outcomes-focused mindset at every level, which can be a journey.
8. Volume vs. Value Conflict: In the transition period, pharmacies might feel stuck between two payment worlds. They still depend on prescription volume for the majority of revenue, but they are being asked to devote time to value-based activities that might not immediately pay. There’s a delicate balance in daily operations: if a pharmacy spends too much time on clinical services without immediate compensation, their financial health could suffer in the short term. It can feel like “doing the right thing” is at odds with “keeping the lights on.” Over time, as value-based payments grow, this should balance out, but during the interim, it’s a challenge to manage.
Addressing Challenges: Many of these challenges are being addressed through collaboration and innovation in the industry. Networks like CPESN provide centralized resources (training, data infrastructure, contract negotiation expertise) to help independent pharmacies overcome barriers together. Technology vendors are developing pharmacist-friendly platforms to document and bill for services more easily. Pharmacy schools and continuing education now increasingly prepare pharmacists for these roles, mitigating the training gap. Policymakers and payers are hearing from pharmacy advocacy groups about the need for fair payment for pharmacist services – the momentum for provider status and better reimbursement is growing[15]. Still, it’s not an overnight change, and pharmacy owners need to be strategic: start with one or two services that address a specific need in their community or with a specific payer, demonstrate success, then scale up gradually.
In conclusion, while pharmacies have proven they can deliver tremendous value in VBC models, they must navigate a minefield of operational and systemic challenges to do so sustainably. Those who manage to innovate and adapt – often by leveraging partnerships, embracing technology, and advocating for supportive policy – are at the forefront of pharmacy’s evolution from a product-dispensing paradigm to a true healthcare delivery role. It’s a challenging journey, but as this report illustrates, it’s one that holds great promise for improving patient care and securing the future of pharmacy in the value-based era.
Quick Implementation Checklist
- Define the target patient cohort and success metrics
- Define workflow and documentation (who does what, when)
- Confirm billing or contracting pathway (PMPM, shared savings, fee-for-service, performance bonus)
- Set up data flow and reporting cadence
- Run a small pilot, measure, then scale
References
Sources:
- AMA – “What is value-based care? Key elements” (2024) – Definition of high-value care and Triple/Quintuple Aim[1].
- CMS – “Value-Based Care” – Explanation of VBC focusing on quality, performance, patient experience[2].
- CMS – “Chronic Care Management At-a-Glance” – Outcomes data showing CCM reduced hospitalizations \~5% and improved adherence[26].
- CMS CMMI – “Enhanced MTM Model” – Description of Part D Enhanced MTM incentives to improve MTM and outcomes[16][17].
- CMS – Star Ratings Technical Notes – Star Ratings measures for Medicare Advantage and Part D (including adherence and preventive care measures)[53].
- American Journal of Health-System Pharmacy (2024) – Study on pharmacist-integrated transitional care, showing major readmission reductions with pharmacist intervention[29].
- J Am Geriatr Soc (2017) – Pharm2Pharm study – 36% drop in med-related hospitalizations and 2.6:1 ROI with pharmacist transitional care[30][31].
- NACDS – Comments to HHS (2020) – Arguing inclusion of pharmacies in value-based enterprises due to their critical care coordination role[15].
- CPESN USA – Payer Solutions – Detailing pharmacy contributions to quality measures (adherence, BP, A1c, readmission avoidance) in ACOs and plans[9].
- CMS MTM evidence base – Summary of published MTM outcomes and utilization/cost impacts across programs[55].
- Place-of-vaccination analysis (commercially insured adults) – Data showing rising share of adult flu vaccines given in pharmacies (\~46% in 2020–21)[40].
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[53] [PDF] Medicare Advantage and Part D Star Ratings Technical Notes (CMS)
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