The Role of Remote Patient Monitoring (RPM) in Value-Based Care

Source Overview

This article is compiled from the broader VBC resource document and is intended to stand alone for this topic.

Remote Patient Monitoring (RPM)

Remote Patient Monitoring involves the use of digital technologies to track patients’ health data outside of traditional clinical settings. For example, patients might use blood pressure cuffs, blood glucose monitors, or weight scales at home that transmit readings to their healthcare team. In a pharmacy context, some innovative community pharmacies and pharmacist-run clinics are offering RPM services by enrolling patients with chronic conditions (like hypertension, diabetes, or heart failure) into monitoring programs. The pharmacy helps set patients up with devices and regularly reviews the data, intervening or alerting the physician if readings fall outside of targets.

Alignment with VBC: RPM directly supports the preventive, proactive care ethos of VBC. By catching issues early (e.g., detecting rising blood pressure or irregular glucose trends), the care team can adjust treatment or counsel the patient before a crisis occurs. This can reduce emergency visits and hospital admissions. In fact, studies show that home monitoring programs can significantly reduce hospital utilization for chronic disease patients[25]. For VBC arrangements where providers are accountable for outcomes and costs, avoiding a hospitalization due to timely intervention is a tangible win. Patients in RPM programs often feel more engaged in their care, which improves their experience (another VBC goal).

Pharmacy’s Role: Pharmacists are well-suited to manage RPM data related to medications and chronic conditions. They can titrate medications under collaborative practice agreements (where allowed) or communicate recommendations to prescribers when readings are consistently high or low. Pharmacist-driven RPM has been piloted in scenarios like managing hypertension, where pharmacists adjust blood pressure meds based on home readings, yielding better blood pressure control than usual care. Community pharmacies may partner with physicians: the physician bills Medicare’s RPM codes, while the pharmacist performs the monitoring and patient coaching as clinical staff. This team-based approach extends care beyond the clinic walls. It eases physician workload and leverages the accessibility of pharmacies – patients can even drop by the pharmacy for device checks or questions. The result is more continuous, coordinated care, exactly what VBC strives for. Economic incentives are emerging as well: Medicare reimburses RPM services (e.g., CPT 99454, 99457), which provides revenue to support the service. Additionally, if a pharmacy helps a provider organization reduce admissions or improve chronic metrics through RPM, that pharmacy becomes a valuable partner in any shared savings or performance bonus scenario.

Case Example: A small network of pharmacies in the Midwest enrolled high-risk diabetic patients into an RPM program with continuous glucose monitors and blood pressure devices. Pharmacists reviewed weekly data and conducted coaching calls. Over 6 months, the network reported improved glucose control and a 30% reduction in diabetes-related ER visits (internal data shared via a case study). While this is anecdotal, it mirrors broader findings that RPM combined with pharmacist counseling can cut hospitalizations and improve chronic disease outcomes. Thus, RPM is a promising pharmacy service to achieve VBC outcomes through technology-enabled, ongoing patient engagement.

Economic and Clinical Incentives for Pharmacies and Providers under VBC

Value-based care introduces new incentive structures that differ from the traditional pharmacy business model. Under fee-for-service, pharmacy revenue has largely come from dispensing (product reimbursement plus a dispensing fee) and some fixed clinical fees (like MTM or immunization fees). VBC, however, opens the door to outcome-based payments and shared savings – fundamentally connecting the pharmacy’s financial rewards to the results they help achieve.

For pharmacies, the economic incentives in VBC can include:

• Performance-Based Bonuses: Many payer-pharmacy contracts now feature bonuses tied to quality metrics. For example, a Medicare Part D plan might pay quarterly bonuses to pharmacies that exceed a certain threshold on adherence metrics (proportion of days covered for diabetes, hypertension, cholesterol drugs) or that have high CMR completion rates. This turns quality into revenue. A high-performing pharmacy in a preferred network can earn significantly more in bonus payments, which incentivizes investment in patient follow-up, adherence packaging, refill synchronization, and other adherence programs. Community Pharmacy Enhanced Services Networks (like CPESN) explicitly negotiate such value-based contracts – if the network as a whole improves outcomes, participating pharmacies share in the savings or earn pay-for-performance payments[50][51].

• Shared Savings Arrangements: In some advanced cases, pharmacies may join an Accountable Care Organization or collaborative network as a formal partner and partake in shared savings. This means if the overall healthcare spending for a defined patient group comes in under a target while quality metrics are met, the pharmacy gets a portion of the savings (just as physicians or hospitals would). While still emerging, there are pilot examples – such as independent pharmacy networks that contract with self-insured employers for chronic disease management and get paid a percentage of any reduction in total healthcare costs achieved. This model is attractive for pharmacies because it rewards clinical excellence and efficiency: the better they manage the patients (keeping them healthy and out of the hospital), the more they earn.

• New Service Revenue Streams: Value-based programs often come with new billable services (as discussed earlier: CCM, TCM, RPM, RTM codes). While pharmacists might not bill all of these directly (due to provider status limitations), entrepreneurial pharmacies are finding ways to participate. For instance, some pharmacies have essentially created mini “clinics” with nurse practitioners or collaborative practice physicians so that they can bill Medicare for CCM or RPM and have the pharmacy staff deliver the service. In other cases, pharmacies contract with provider groups to supply these services for a fee. The net effect is that pharmacies can diversify their revenue beyond dispensing – getting paid for care management, monitoring, and consulting. This is crucial in an era where dispensing fees and margins are tight; VBC provides an avenue for pharmacies to leverage their clinical skills for payment.

• Avoiding Penalties / Securing Preferred Status: On the provider side, physicians and hospitals face penalties for poor performance (readmission penalties, MIPS negative adjustments, etc.) and are eager to avoid those by improving quality. Pharmacies that can help providers avoid these penalties (e.g., by reducing readmissions through TCM or helping achieve high MIPS scores via medication-related measures) become very valuable partners. A primary care group in MIPS might contract with a pharmacy to do annual wellness visits or medication reviews because it improves their MIPS quality points – the cost of paying the pharmacy is less than the benefit of a better Medicare reimbursement adjustment. Similarly, hospitals might fund a meds-to-beds or transition-of-care pharmacy program because it prevents readmissions, thereby avoiding Medicare penalties that far exceed the program cost. In these scenarios, the pharmacy’s incentive is an indirect but important one: strong performance secures them a role and funding from partners. Pharmacies demonstrating value may gain preferred referrals, inclusion in narrow networks, and payer promotions (steering patients to that pharmacy), which in turn boosts their business.

Clinically, the incentives align as well:

• Improved Patient Outcomes: For providers of all kinds, better outcomes are of course a primary professional goal. VBC’s focus on outcomes means pharmacists finally have a system that recognizes and rewards their impact on outcomes. Many pharmacists find professional satisfaction in seeing tangible improvements – e.g., seeing a patient’s A1c drop or knowing they helped prevent a hospitalization. In value-based arrangements, these clinical wins are also financial wins. This alignment can increase pharmacist morale and engagement, as their efforts in patient care are validated by both patient feedback and the value-based metrics.

• Collaborative Practice Incentives: VBC encourages a team-based approach. Providers have incentive to delegate and use the top of each team member’s license. This means more collaborative practice agreements and referrals to pharmacists for medication management. Physicians, under time pressure, are happy to have pharmacists take on complex med management if it helps achieve quality targets. In some cases, physicians may even share incentive payments with pharmacists – for instance, a physician group might award bonuses to clinical staff (including pharmacists) based on quality scores or savings achieved. So pharmacists could directly get a piece of the incentive pie through their employer. Even if not direct, pharmacists benefit from elevated status on the care team and potentially more negotiating power for higher salaries or support when they are clearly contributing to the practice’s VBC success.

• Patient Retention and Loyalty: A perhaps less obvious incentive – pharmacies providing high-quality clinical services often engender greater patient loyalty and attract new patients. In the competitive pharmacy market, being known as the pharmacy that will call you and help manage your health (versus one that just counts pills) can distinguish a business. Under VBC, payers and provider networks may actively steer patients to pharmacies with such services (some ACOs create lists of “preferred pharmacies” that align with their care philosophy). This can increase a pharmacy’s prescription volume in the long run. So even though VBC focuses on quality, there’s a halo effect where pharmacies that embrace it may also see growth in their traditional revenue streams due to a stronger reputation and relationships.

For providers (physicians/health systems), the incentive to involve pharmacies is clear: pharmacists can amplify performance. A physician participating in a value-based contract might realize that without good med management, they won’t hit their diabetes control or readmission goals. By engaging a pharmacist, they effectively add a specialist who can dedicate time to those issues that the physician cannot. The physician then sees better metrics and qualifies for bonuses or avoids penalties. Also, with pharmacists handling medication-related tasks, physicians can operate at their highest skill level (seeing more complex cases, doing procedures, etc.), which can indirectly help their productivity and revenue.

From a payer perspective (insurers, Medicare, employers), the economic incentive is straightforward: if pharmacies help reduce expensive events (hospitalizations, surgeries) or improve chronic disease trends, the payer saves money. That’s why we see experimentation with paying pharmacies for outcomes – it’s cheaper to pay a pharmacy $100 to manage a patient’s hypertension than to pay $20,000 for a stroke that could result from unmanaged hypertension. Payers are increasingly data-driven; as evidence mounts for pharmacy interventions saving costs, payers are writing those incentives into contracts. For instance, some Medicaid programs give plans extra credit (or require) that they integrate pharmacists in care management for certain high-need groups, acknowledging the value.

In essence, value-based care creates a scenario where "what is good for the patient is also good for business." Pharmacies improving adherence and patient health aren’t just doing goodwill – under VBC, those translate to measurable value that someone (a payer, a provider group) is willing to pay for. It’s a positive feedback loop: better outcomes lead to rewards, which support the pharmacy to continue providing high-quality care.

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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