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Quality Measurement and Performance-Based Payments


Performance-based payment models aim to address two fundamental problems of the health care system in the United States: high spending and low quality. No other country spends more on health care. At 17.7% of gross domestic product (GDP),1 the United States spends 45% the second-highest spending industrialized country, Switzerland, at 12.2% of GDP.2 Average annual per capita health care spending, currently more than $11,000 per year, is expected to reach 19.4% of the GDP and nearly $17,000 per capita by 2027.1

This level of health care spending could be considered acceptable if the United States had comparably high quality. For example, one may be willing to spend extra money for a luxury car—certain cars are of better quality and therefore worth spending more money on. Unfortunately, the United States consumer is paying a luxury price and receiving “lemon” (low) quality. Despite high health care spending, international comparisons of overall health care quality consistently rank the United States poorly.2-4 In particular, the United States tends to score the lowest on measures of access, equity, and health care outcomes among high-income countries but performs close to average on measures of care processes.

In the context of health policy, this trade-off between cost and quality is referred to as health care value. Value-oriented thinking preceded the 2010 passage of the Affordable Care Act (ACA), and optimizing value has been a major driver of health care reform. Specific definitions of value vary, from a straightforward definition of value as outcomes per dollar spent5 to more complex concepts such as the Triple Aim, which considers value as the tradeoff among population health, individual care experiences, and health care spending.6 Regardless of the specific definition, improving value is the goal that drives nearly all current payment reforms.


Defining Health Care Cost

Calculating cost and quality to define value is a complex process. When calculating costs, one first has to assume a perspective. The perspective used within most performance-based payment models is that of the insurer, as they hold the financial risk and design the models. The most relevant alternative perspective is that of the patient — for example, when a person is trying to find the drug with the cheapest copayment — but this perspective is not often explicitly included in the definition of cost for performance-based models of care. Second, the services or products included in the cost calculation and the time over which cost is calculated must be defined. The broadest set of services over which cost for a performance-based model can be summed is total cost of care (TCOC), which is the sum of all services reimbursed by the insurer for a given patient.7 Variations of these models include bundled payments, which sum payments related to a defined event such as a hip replacement for a defined period of time before and after the event takes place.8

Finally, to calculate cost for services over a given time, accurate cost information is needed. While administrative claims databases often contain a record of estimated insurance payment to a provider for a service, they are not inclusive of rebates, nor do they contain any negotiated provider discounts. Therefore, while the process for calculating costs is straightforward, limitations may make calculating precise cost impossible in many instances.

Defining Health Care Quality

While the process for calculating costs is relatively straightforward, calculating quality of services is much more fluid and open to opinion. Service quality is much more difficult to calculate than product quality. Take, for instance, the quality of pharmaceuticals. The United States Pharmacopeia has a well-defined set of quality standards for defining drug product quality.9 If, after a series of tests, the results fall into specific predefined ranges as compared with a reference product, then the product is deemed to be of high quality.

Such regimented evaluations of quality are not available for the use of these same pharmaceuticals or for almost any other aspect of health care delivery. Indeed, given the patient-specific nature of care, it is hard to imagine how such a specific system of quality measurement could be developed. While validated instruments to measure aspects of quality such as patient satisfaction, medication adherence, and guideline concordance are commonly used, these instruments are often narrowly targeted and the process for combining information across instruments is often somewhat arbitrary.10

Key organizations that help to shape the quality landscape for health care are described in Table 1. The National Committee for Quality Assurance (NCQA) and Pharmacy Quality Alliance (PQA) develop measures used to accredit health care organizations and determine performance-based funding. The National Quality Forum (NQF) sets scientific standards for quality measures and enforces these standards through its endorsement process. Pharmacy Quality Solutions uses measures developed by PQA and others to measure the performance of community pharmacies. Some of the most common key concepts in health care quality are included in Table 2 and described below.

Table 1. Quality Organizations to Know
Organization Description and Purpose
National Quality Forum (NQF) Endorses quality measures developed by others and sets scientific standards for measure development. The federal government and other payers rely on NQF to vet measures used in performance-based payment models.
National Committee for Quality Assurance (NCQA) Accredits health plans and leads measure development for health plans and providers through the Healthcare Effectiveness Data and Information Set (HEDIS®) measure set. The HEDIS measure set includes 90 measures across 6 domains of care and is used for quality improvement and reporting by entities accredited by NCQA as well as by the federal government through Medicare.
Pharmacy Quality Alliance (PQA) Leading developer of medication-related health care quality measures. Develops measures for use in Medicare Part D plans and others. Actively engaged in developing new measures for community pharmacy quality measurement.
Pharmacy Quality Solutions (PQS) Leading provider of pharmacy quality data, representing nearly 80% of Medicare Advantage payers and 95% of community pharmacies.
Table 2. Key Quality Concepts
Concept Description
Structural Measure Quality measure assessing a physical attribute of a health care system that supports care quality. Examples include compliance with USP <800>, availability of after-hours care, and staff qualifications.
Process Measure Quality measure assessing the use of a health care structure to provide quality care. Examples include prescribing of guideline-recommended therapy, comprehensive medication review completion rates, and medication adherence.
Outcome Measure Quality measure assessing ultimate goals of care. Includes patient-reported outcomes and satisfaction, as well as major events such as disease progression, avoidable hospitalizations, and mortality.
Denominator Population being targeted for a given quality measure
Numerator The quality concept evaluated for the target population. For measures such as adherence and statin use in persons with diabetes for whom a positive score is better, patients who fail to meet numerator criteria count against a pharmacy’s performance score. These patients are sometimes referred to as outliers.
Attribution The process of assigning patients to providers, pharmacies, and other entities for the purposes of identifying who is responsible for the patient’s care
Risk Adjustment The process of adjusting a measure score to reflect the provider’s performance while controlling for patient-level factors outside the provider’s control

To help add structure to health care quality measurement, the most common categorization scheme is the structure, process, and outcome (SPO) model developed by Avedis Donabedian (Table 2).11 In brief, health care structures are tangible or intangible static attributes of a care system. Processes are how these structures are used to provide care, and outcomes are the ultimate goals of the care being provided. Using diabetes as an example, the blood glucose meter used by the patient and the Certified Diabetes Educator credential earned by a provider are both considered structural elements of health care. Processes include the physician’s skill in caring for the patient as well as the patient’s use of their own medication. Outcomes are the ultimate goals of care for a patient with diabetes—overall wellness as well as avoiding microvascular and macrovascular complications of disease. Concrete markers of disease progression, such as hemoglobin A1c, are also often considered outcomes.

Examples of structural health care quality measures include endorsements, such as specific capacities within an electronic health record or the availability of after-hours care. Process measures are more common and include measures such as the percentage of patients who received a diabetic foot examination and the percentage of patients who are adherent to medications for diabetes. Outcome measures include items such as the percentage of patients with an A1c greater than 9% or the percentage of patients admitted to a hospital with an avoidable diabetes-related complication. The population being targeted for a given quality measure is referred to as the denominator. Using adherence to non-insulin antidiabetic medications as an example, the target population that defines the denominator is patients who take antidiabetic medications but do not use insulin. The numerator defines the quality concept evaluated for the target population. Using the same example, the numerator includes those who have at least 80% of days during the measurement period covered by non-insulin antidiabetic medications.

To calculate a score for an individual provider, pharmacy, or other entity, patients first need to be attributed to the provider, pharmacy, or other entity who will be responsible for their care. Attribution criteria vary by program and can be prospective or retrospective. For prospective attribution, the patient picks their attributed provider in advance. This is commonly used with health-maintenance organizations, which have a narrow providers network and offer health insurance that gives access to this provider group. Retrospective attribution is more common when payers such as Medicare create performance-based incentives built on top of a fee-for-service system in Medicare Part B. With retrospective attribution, the provision of care is observed for a period of time, and the provider who gave the plurality or majority of care is assigned as the attributed provider. For the example of performance-based pharmacy payment models, the attributed pharmacy is commonly the pharmacy that provided 50% or more of a patient’s prescriptions during a measurement period.12

To calculate a provider-level quality measure score, the total number of attributed patients who met the numerator criteria is summed, and this sum is divided by the total number of patients who met the denominator criteria. This creates the observed provider-level quality score, which ranges from 0% to 100%. Individual measure scores can be combined with other measure scores to create composite measures, and this is common in systems that pay bonuses or assign penalties based on performance. Additionally, individual measure scores can be risk adjusted. Methods for risk adjustment can be complex, but the overall goal of risk adjustment is to control for patient-level characteristics, such as social determinants of health and other factors, that influence measure scores but are outside of providers’ control.13 Risk adjustment creates a truer measure of the provider’s performance, but not all measures are risk adjusted. Importantly, quality measures for performance-based pharmacy payment models are rarely risk adjusted.


The design of performance-based payment models varies widely. Two major types of models are discussed in this section: pay-for-performance models and accountable care organizations (ACOs). Pay-for-performance models use a series of quality and spending measures to evaluate provider performance and determine performance-linked bonuses or penalties based on scores. ACOs incentivize reductions in health care spending by encouraging coordination between inpatient and outpatient service providers and sharing savings with provider groups who meet quality benchmarks. These models are used by Medicare, Medicaid, and commercial insurers to incentivize performance. Pharmacists can influence quality and cost within each of these types of programs, and the following section will describe ways in which pharmacists can create value through performance-based payment models.


In pay-for-performance models, insurers create a system of performance measures that are used to modify provider payments. Measure can be quality measures only or a combination of quality and spending measures. Performance-based incentives can take the form of bonuses or penalties, which could increase or decrease total provider revenue. The possibility of gaining additional revenue is referred to as upside risk, and the opposite is referred to as downside risk. This is the typical model used for performance-based pharmacy payment models. This is also the model used by the Merit-based Incentive Payment System (MIPS), the pay-for-performance system used for Medicare to adjust physician payments based on performance. Nearly 100% of eligible physicians have participated in MIPS since the program’s inception.14

First implemented in 2017, MIPS is highly complex. It includes 4 performance categories: Quality, Promoting Interoperability, Improvement Activities, and Cost.15 Scores for measures within these categories have different weights and sum to create a final score, which is used to determine a performance bonus. For the first 2 years, only quality, promoting interoperability, and improvement performance categories were included in the overall calculation of a performance score. Beginning in 2019, cost was also included. Performance scores for a given year are used to adjust payments 2 years later. For example, 2019 performance impacts payments made in 2021.The total possible upside and downside risk for MIPS depends on the year, with the maximum downside risk for 2020 equaling 9% and maximum possible upside bonus per statute equaling 9%.14 However, more providers historically have received a bonus than had to pay a penalty. Therefore, to maintain budget neutrality, the actual upside potential has been much less than 9%.16 Regardless, performance scores on individual measures can contribute to substantial financial gains for physicians participating in MIPS.14

Many of the quality measures used as a part of the MIPS Quality track can be influenced by pharmacists. Physicians can choose from a list of 271 different measures, and preliminary analysis of MIPS measures by the PQA identified 32 that are medication-related measures and have high likelihood of pharmacist impact.17 Examples of measures with high likelihood of impact include adherence to antipsychotic medications for individuals with schizophrenia, use of high-risk medications in the elderly, multiple blood pressure control measures, and many measures related to guideline-concordant therapy. There is strong evidence for ambulatory care pharmacists working with physicians to provide high quality patient care; by influencing MIPS-relevant measures, these pharmacists can create additional revenue to offset their salaries.

The future of the MIPS program is hard to predict. Some of the response to MIPS has been negative, and the Medicare Payment Advisory Commission, a nonpartisan legislative branch agency that provides analysis and advice on Medicare, recently recommended eliminating the MIPS program.18 In response to this and other criticism, the Centers for Medicare and Medicaid Services (CMS) is planning to transition MIPS Value Pathways (MVP), which reduces some of the complexity of the existing MIPS system.14 The general goal is to reduce the numbers of measures on which a clinician can be assessed and align these with specific activities to reduce the reporting burden for clinicians. Regardless of changes, existing law requires MIPS to set the minimum performance threshold to avoid receiving a penalty at either the mean or median and for the cost performance category to be weighted at least 30%. Therefore, stakes for performance will increase and physicians will become more focused on achieving cost savings. This should produce opportunities for pharmacists to create additional performance-based incentives, especially if the MVP pathways are aligned with medication-related quality measures.

Accountable Care Organizations

Opportunities for pharmacists to enhance performance-based incentives through ACOs are similar to opportunities within pay-for-performance models such as MIPS. Key differences between ACOs and provider-focused pay-for-performance models are that ACOs bring together provider groups and hospitals while provider-focused pay-for-performance models include only providers or groups of providers. Additionally, whereas provider-focused models can include spending measures as a part of the performance measure set, ACOs separate out spending reduction and quality improvement as distinct goals.

The largest ACO program funded by Medicare is the Medicare Shared Savings Program (MSSP).19 To participate in the MSSP program, providers and hospitals form groups, referred to as ACOs, that agree to care for an attributed set of patients. The ACO is held accountable for quality, cost, and care experiences, and can receive additional revenue by keeping medical spending under prespecified targets. Medicare experiences savings, and a portion of these savings are shared back with the ACO to increase its revenue. However, the ACO only receives those savings if it can achieve certain benchmarks on quality measures. Additionally, depending on the track through which an ACO participates, it may be required to return a portion of revenue back to Medicare if spending exceeds targets.

The quality measures list for MSSP ACOs is much more limited than the measures list for MIPS.20 For MSSP ACOs, important measures that can be impacted by pharmacists include influenza immunization, appropriate statin therapy, hemoglobin A1c control in diabetes, and blood pressure control.21 Additionally, for broader measures such as hospital readmissions, evidence suggests that engaging a pharmacist in transitions of care can significantly reduce medication-related readmissions.22 Hitting quality targets can unlock substantial shared savings, and improving care may also serve to produce savings themselves. Importantly, within the MSSP program, ACOs are not held accountable for prescription drug spending, which reduces the pressure within these entities for pharmacists to focus on prescription drug cost reduction. Around half of commercial ACOs, however, do include prescription drug spending as a part of their overall spending targets, and around a quarter include pharmacy services within their ACO provider umbrella.23

Five specific services that pharmacists help improve quality and reduce spending for ACOs are: medication therapy management, annual wellness visits, chronic disease state management, chronic care management, and transitions of care.21 Literature on pharmacists’ engagement with ACOs is expanding, and this is a growing area of interest for health-system pharmacists.21,23-25


In addition to opportunities for pharmacists to collaborate with other providers in performance-based payment models, these have become commonplace for community pharmacies as well.

The first prominent performance-based payment model for community pharmacies was an initiative started in 2013 by Inland Empire Health Plan, a Medicaid managed care organization in California.26 The use of performance-based payments has grown rapidly since then, with nearly 70% of Medicare beneficiaries now enrolled in plans that use performance measures to modify payments or fees to community pharmacies.27 Performance-based payments make up a substantial portion of pharmacies’ revenue; given the tight margins on prescriptions, failure to perform in these models can be financially threatening, especially for independent pharmacies.

The typical performance-based payment model for community pharmacies uses a pay-for-performance structure similar to those of MIPS. However, most of these models are downside only, meaning pharmacies are at risk for revenue loss but can rarely gain additional revenue through these programs. Also, the design of models varies from payer to payer and population to population, making it challenging for pharmacists to manage the diverse set of measures on which plans are asking them to perform.

Measure Selection

Most of the recent expansion in performance-based payments has come through Medicare, and the driving force for this expansion has primarily been the Medicare Star Ratings program.28 The Star Ratings program relies on a broad set of quality measures to evaluate plan-level performance for Medicare Part C and Part D plan sponsors. Plans are rated using a 5-star system and Medicare Part C plans can receive substantial bonus payments and if they can score 4 or more stars. Across all plan sponsors, these bonus payments total $6 billion annually.29

Medication-related measures make up 40% of the total 2020 Part D Star Ratings score for a plan; these are adherence to statins, renin-angiotensin system antagonists, and non-insulin antidiabetic medications as well as statin use in persons with diabetes and comprehensive medication review completion rate.30 A list of these clinically oriented measures and others commonly used to evaluate performance is included in Table 3. Medicare prescription drug plans may also include financially related measures such as generic drug utilization rate (GDUR) and formulary compliance. GDUR is defined as the percentage of total prescriptions within a given plan that are dispensed as generics. Formulary compliance relates to the extent to which medication choice adheres to the plan’s formulary. An example of lack of formulary compliance is choosing a nonpreferred brand over a preferred brand, or a brand name medication when a therapeutically similar generic is available.

Table 3. Common Quality Measures Used in Performance-Based Payment Model48
Description Denominator Numerator
Adherence to Renin-Angiotensin System Antagonists (RASAs)49 Patients aged 65 years or older with at least 2 fills of RASA medications during the measurement year Patients in the denominator with  a proportion of days covered (PDC) ≥80%
Adherence to Statins49 Patients aged 65 or older with at least two fills of statin medications during the measurement year Patients in the denominator with  a PDC ≥80%
Adherence to Non-insulin Diabetes Medications49 Patients aged 65 or older with at least two fills of non-insulin antidiabetic medications across any eligible class during the measurement year. Patients filling insulin are excluded. Patients in the denominator with  a PDC ≥80%
Adherence to Antipsychotic Medications for Individuals with Schizophrenia50 Patients aged 19–64 with a diagnosis of schizophrenia and at least two fills of an antipsychotic medication. Patients with dementia are excluded. Patients in the denominator with a PDC ≥80%
Influenza Immunization48 Patients aged 18 and older attributed to a pharmacy Patients in the denominator who had influenza vaccine billed to insurance
Statin Use in Persons with Diabetes49 Patients aged 40–75 dispensed at least two diabetes medications. Patients in the denominator who filled at least one statin medication
Comprehensive Medication Review Completion Rate49 Patients aged 18 and older who are enrolled in a Medication Therapy Management Program Patients in the denominator who received a comprehensive medication review

Medicaid has seen some movement toward performance-based payments, but the design of these models is less consistent than Medicare. The population of patients receiving drug coverage through Medicaid plans is diverse and includes many children; therefore, measures designed for use in an elderly population, such as high-risk medication use, are less relevant to Medicaid plans. Alternative measures that are more commonly used in Medicaid include those targeted at younger populations and populations with mental health concerns, such as use of rescue inhalers in patients with asthma and persistence to treatment with antidepressants.26 However, because of the fractured nature of the Medicaid system and the lack of external pressure to perform on a specific set of measures, no single set of common measures exists across all Medicaid performance-based pharmacy payment models.

Like Medicaid, commercial plans lack a single set of performance measures. Contractual arrangements for commercial plans, wherein pharmacy benefit managers fulfill traditional cost containment roles without exposure to total cost of care or quality goals, push performance measures for commercial plans toward financially driven measures such as GDUR and formulary compliance. Despite these pressures for commercial plans to focus on prescription drug cost reduction, some have begun innovative explorations that recognize the potential for medications to improve patients’ quality of life and lower health care spending. Payment models designed by these forward-thinking health plans support high-quality pharmacy networks and reward those pharmacies for performance on an expanded set of quality measures.31 Measures within these innovative models include the Medicare Star Ratings measures, as well as measures designed to incentivize reductions in health care utilization, such as hospital admission and emergency department visit rates. These progressive models are in the early stages but are promising alternatives to create revenue streams that reward pharmacists’ provision of cognitive services.

Design of Performance-Based Payments for Community Pharmacies

Plans can incentivize pharmacy performance in 3 ways: rewards, penalties, or a mixture of these approaches. Within a rewards-based model, pharmacies that exceed certain performance benchmarks on the measures included in a performance-based payment model receive bonus payments. A model implemented by the Inland Empire Health Plan is an example of a rewards-based model. This plan pays out bonuses each year to pharmacies that either meet prespecified performance targets or improve by a certain amount compared with the prior period.26 A challenge with these models is creating sufficiently large incentives for pharmacists to pursue. For example, if a pharmacy can make an additional $15,000 in bonuses by achieving adherence-related performance goals but would have to invest in additional staff and change workflow to do so, pharmacy managers and owners may not find that the cost justifies the reward. Yet health plans would likely see $15,000 per pharmacy as a substantial bonus and have expressed frustration at lack of pharmacists’ response to the incentives they create.32 For health plans, this can raise a fundamental question: If the reward required for a pharmacist to pursue a measure is greater than the expected financial return from measure performance, are the incentives worth the expense?

Perhaps motivated by this question, most plans, especially within Medicare, have chosen penalty-based methods of implementing performance-based pharmacy payment models. These models do not reward the highest performers but rather penalize poor performers. For Medicare, these penalties are implemented through a mechanism known as direct and indirect remuneration (DIR) fees.33 Through DIR fees, Medicare plan sponsors claw back prescription drug payments made to pharmacies. The use of DIR fees is not new, but the use of these fees as a mechanism for implementing performance-based payments is.

To implement the performance-based fee component of DIR fees, most plan sponsors have chosen a penalty-only model. Some plans offer rewards for the highest performers and penalties for the lowest performers, but this is rare. For nearly all Medicare plans, pharmacies with poor performance receive a higher DIR fee than pharmacies with high performance, but both pharmacies have to pay DIR fees because of additional fixed fees tied to network participation. The amount of fees can be substantial—anecdotal reports of fees range from $10,000 to $100,000 per quarter.34 Fees often reflect quarterly activity, and fees are difficult to link to the prescriptions that caused them. This leaves pharmacy owners with large bills and little explanation. The use of the penalties and the DIR mechanism has caused immense frustration among pharmacy owners as they feel they cannot ever avoid these fees—regardless of performance, the pharmacy pays a DIR fee and sees their financial viability continuing to decline.


Primary challenges with pharmacy-level performance measurement are 1) quality measure selection, 2) low reliability, and 3) lack of risk adjustment.

For quality measure selection, the choice of quality measures is driven primarily by the Medicare Star Ratings system and medication cost reduction. Adherence measures are included in these models not because they are the most valid measures of care quality but because they are used in the Star Ratings program; plan sponsors receive bonuses if they can engage pharmacists in increasing performance. Formulary compliance and generic drug utilization rate likewise engage pharmacists in reducing medication spending, not improving true care quality. Pharmacists have expressed frustration that this limited set of measures does not capture the impact of the full spectrum of services delivered by community pharmacists and have advocated for more clinically relevant measures such as blood pressure control, A1c control, and others. There is some movement toward these types of measures among more progressive performance-based payment models,31,35 but the transition has been slow.

The second major challenge is the low reliability of the measures used to evaluate pharmacy performance. Reliability in this context refers to the ability of a measure to accurately identify the highest and lowest performing pharmacies. Measures with low reliability are prone to error, resulting in pharmacy rankings that are due to random chance instead of true performance.36 The measures used for the Medicare Star Ratings program were designed to be reliable at the plan level. When these same measures are implemented at the pharmacy level, the number of attributed patients per pharmacy can become very small.35 These small denominators mean that pharmacy rankings are vulnerable to random variation and that systems relying on pharmacies’ percentile ranks to determine rewards or penalties are vulnerable to misallocation of funds. Therefore, the relationship between true performance and rank might be quite weak within most payers’ performance-based pharmacy payment models. This problem has yet to be fully explored.

Finally, pharmacy performance measures are not risk adjusted. This is especially concerning for medication adherence, where social determinants of health such as poverty, provider access, psychological factors, and others have a major influence on a patients’ medication adherence.37 Additionally, some evidence shows that pharmacies offering a wide range of enhanced services can attract patients with worse social determinants of health.38 Although not perfect, risk adjustment can help to even the playing field for providers to increase the reliability of ranking systems that are used to determine performance-based payments for most models.13 The use of risk adjustment should be expanded.


Several specific actions can potentially improve performance and either increase performance-linked revenue or decrease performance-linked fees (Table 4). The first step is to pay attention—know what measures are included in third-party contracts and know what your pharmacy scores are. The Electronic Quality Improvement Platform for Plans and Pharmacies (EQuIPPTM) is used by most Part D plan sponsors to calculate performance for performance-based payment models.27 EQuIPP has a pharmacy-facing portal which displays measure scores to pharmacies, and this is the best place to start for understanding performance. Pharmacy Quality Solutions, the company that supports the EQuIPP platform, has created the EQuIPP Educational Video Library, which has a series of training videos to help understand the basics of pharmacy quality measurement.39

Table 4. Strategies to Improve Performance Scores
Strategy Description
Monitor quality scores Use the EQuIPP platform or another vendor to monitor quality scores regularly. The most engaged pharmacies often check their scores weekly or more often.
Identify a quality champion Designate a specific individual to take charge of quality initiatives and monitor quality. This could be a pharmacist, technician, student, or other staff member.
Create a culture of continuous quality improvement Culture is key. To maximize performance, a culture of quality improvement is needed to align all staff members to the idea that ongoing change is needed to improve quality. Success is less likely if quality improvement is left up to the quality champion alone.
Implement specific services Identify areas of weakness and implement specific services to address it. For example, many interventions exist to improve adherence rates, such as bubble packing, medication synchronization, and 90-day medication fills.
Target outliers EQuIPP and other vendors provide outlier reports that can identify patients who are negatively affecting quality scores. Target outreach to these patients.
Collaborate with other health care professionals Physicians and other health care professionals are starting to be exposed to the same measures as pharmacists, and vice versa. This should increase the willingness for physicians to collaborate with pharmacists on shared quality goals.

Additionally, some plans have their own quality reports they send to pharmacies, and these can be valuable resources for understanding performance. Third-party care support software vendors, such as Prescribe Wellness and Rx30, also include quality measurement as a part of their platform. The data used to calculate scores on these platforms comes from pharmacies’ own dispensing data and will not align perfectly with reports from EQuIPP. Cash prescriptions will show up on these platforms but not on EQuIPP reports, while prescriptions filled at other pharmacies will show up on EQuIPP reports but not on these platforms. The impact of these differences in data sources depends on a patient’s filling behavior. If a patient fills a mix of prescriptions through cash and insurance, scores will be higher through a system that uses the pharmacy’s dispensing data than through EQuIPP. On the other hand, if a patient fills prescriptions at more than one pharmacy, relying on dispensing data from one pharmacy would underestimate adherence. Regardless, getting a sense of where a pharmacy stands in relation to others is fundamental to performance improvement.

With an understanding of a pharmacy’s performance, a key next step for owners and managers is being proactive. A best practice in quality improvement for pharmacies is having a dedicated quality champion; this could be a pharmacist, student pharmacist, technician, or other staff member. Many top-performing pharmacies check scores weekly or more often, and a quality champion can monitor performance and help to form a culture of quality improvement within the pharmacy. A culture of quality improvement requires an understanding that performance measurement needs to be integrated into workflow and be a part of the day-to-day operations of the pharmacy.

The specific tools for improving patient-level performance vary by measure. For adherence, the measure most commonly used in performance-based pharmacy payment models, medication synchronization is a frequently used option to improve adherence. Medication synchronization involves aligning medication fills to the same day of the month to create a scheduled pick-up time for all medications that may or may not be aligned with a clinically oriented appointment to address medication-related needs. The appointment-based model is a best practice, and research has found increases in medication adherence and reductions in adverse outcomes even when the use of an appointment-based model is ambiguous.40-42 Additionally, packaging medications into bubble packs has been shown to improve medication adherence,43 and this can be combined with medication synchronization.

One alternative to medication synchronization is 90-day medication fills, which have become much more common in recent years. While 90-day fills can increase measured proportion of days covered (PDC) and therefore increase adherence scores, the relationship between 90-day fills and actual care quality is dubious. Differences in medication adherence rates between mail-service and community pharmacies is driven in large part by greater use of 90-day fills through mail service, and it is not clear that this actually creates better adherence or improved outcomes.44 In this way, pushing toward 90-day fills may decrease the validity of the PDC as a method for estimating adherence.

Another option for improving adherence is medication delivery. This is especially impactful for home-bound patients who have little access to transportation. Delivery is common among independent pharmacies, but large chains are also partnering with delivery companies to send medications directly to homes.45 Anecdotally, some innovative pharmacists have begun reframing delivery drivers as community health workers and engaging them to report back on patient interactions that may require additional follow up.

Beyond medication adherence, measures such as statin use in persons with diabetes require the pharmacist to contact a prescriber and initiate a new prescription; these may be more difficult to influence but can still be addressed by pharmacists.46 Additionally, as Medicare Advantage plans with Part D plans look for ways to further maximize their performance scores, medical group practices are now being exposed to Part D measures.47 This creates incentives for pharmacies to work with group practices on measures to which they are both exposed, possibly reducing barriers to performance improvement.

Once these services have been identified, it is beneficial to target the services at specific patients to maximize their impact. Not every patient needs every service—by identifying patients most likely to benefit, pharmacies can reduce wasted resources. One excellent place to start is with an outlier report, provided through EQuIPP and other vendors, which identifies patients attributed to the pharmacy for performance measurement who are negatively affecting the pharmacy’s scores. This can serve as an initial list of patients to target as a pharmacy begins to take action on its performance.


In summary, performance-based payment models have become a defining feature of the U.S. health care system. These models use performance measures to determine payments to providers and have the potential to improve health care quality and reduce health care spending if implemented appropriately. Pharmacists can add value to the health care team through their work to improve performance on medication-related measures and reduce health care spending.

Additionally, performance-based payments for community pharmacies has become commonplace over the last 5 years, and the share of pharmacies’ revenue linked to performance has likewise grown. This has created frustration among many community pharmacists who are required to pay performance-based fees back to insurers. There are many actions community pharmacists can take to influence performance, and the first action is understanding the measures on which they are being evaluated and knowing their scores. Performance-based payment models will evolve as payers’ and providers’ experience grows, and they will remain a feature for the foreseeable future.


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