Unlike fee-for-service where payment occurs by performing an action in caring for a patient, value-based payments pay for the result of the totality of numerous actions delivered in the care of a patient or population. If health improvements occur, providers are rewarded; if not, the providers may be penalized. In healthcare, the usual economic forces where a poor product or service results in declining purchases do not operate as one would expect. This occurs because of healthcare's complex and opaque nature, and those who receive care do not directly pay for the care or in some benefit plans they are restricted in their ability to choose their providers. A situation is created in which a poor-quality service is paid the same amount as an identical service provided with high quality. These dynamics have contributed to the current circumstances facing healthcare in the United States: escalating and unsustainable healthcare costs, and quality of care when compared to other industrialized countries remains at the bottom of the list.1,2 Waste in our current system, which provides zero value, is estimated at $3,500 per person, or one-third of what is spent on healthcare per person in the United States.3

Clearly, a need for change is evident; thus, payers, organizations, and providers are pursuing new and innovative alternative payment models that reward value of services and quality of care. To understand payment based on value, it is necessary to know what value means to the stakeholders involved. A definition proposed by M. E. Porter, a Harvard economist, is the value definition most widely used.4 Porter states that value refers to outcomes achieved that are important to a patient and specific to the full spectrum of a medical condition per total dollars spent. Value is derived when the maximum health benefit is achieved at the lowest cost. Three main pathways exist to achieve this goal:

  1. Improving the benefit of care is greater than any increase in the cost of that care.

  2. Decreasing the cost of care without jeopardizing the benefits of that care.

  3. Improving benefits of care while decreasing its cost.


Although programs paying for quality began in the 1990s, it was the Affordable Care Act (ACA), passed in 2010, that gave birth to many emerging models. Presently, there exists a spectrum of VBP models that span from quality payment built upon the existing fee-for-service model to payment based on how well a population's health improves. Summarized below are the more prevalent models. Although not universal, all models have examples of pharmacist-provided patient care contributing to a model's value in providing care.

Pay for Performance (P4P)

The most common payment model is P4P, which is built on fee-for-service architecture. Providers bill and are paid for services under fee-for-service but have the additional requirement of meeting certain preestablished measures intended to improve the quality and efficiency of care. Payment models vary in that some providers are paid just to report; others have incentive payments if measure benchmarks are met or exceeded. If quality benchmarks are not achieved, for some models there are no consequences other than not receiving the financial incentives; other models incur financial penalties or risk being dropped from the provider network. An advantage of P4P is the ability to measure distinct aspects of care such as blood pressure reduction. It is more challenging to measure holistic outcomes of care compared to other VBP models.

Patient-Centered Medical Home

Patient-Centered Medical Home (PCMH) is a model of care delivery that is also a form of VBP because its five principles of comprehensive care, patient-centered care, coordinated care, accessible services, and quality and safety are considered foundational to achieve value. Providers may acquire a recognition for meeting PCMH standards through accreditation organizations and may be rewarded by certain payers with additional payment or reimbursement.

Accountable Care Organizations

Accountable Care Organizations (ACOs), like PCMH, are a delivery and payment model formed by groups of organizations (hospitals, long-term care facilities, etc.) and healthcare providers (physicians, pharmacists, social workers, etc.) for the purpose of providing highly coordinated and quality care to an attributed population. The premise is that waste will be reduced through intense coordination and focus on quality under a unified structure. ACOs assume the overall accountability of care and costs for the enrolled patients. There are numerous models under the ACO umbrella. ACO models are found in Medicare, Medicaid, and with commercial payers. Central to their structure are the effort to achieve set quality metrics and the concept of positive and negative risk-sharing. A one-sided risk model is one in which the payer and the ACO, based on the ACO's financial performance, share any positive savings that occur. A two-sided risk model is one in which both the payer and the ACO share either positive financial rewards or negative financial losses based on the ACOs’ performance.

Clinical Episode or Bundled Payments

Clinical episode or bundled payments address healthcare situations that are episodes of care versus chronic care. The episodes involve multiple providers and settings in care of conditions that have a start and an end; where coordination and managing quality and cost have potential to provide value (e.g., joint replacement, maternity care, myocardial infarction). The model is intended to provide flexibility to healthcare providers to determine what services and resources are needed for the episode to achieve the greatest value. A single comprehensive payment is made to the provider group delivering the services, often with risk sharing as part of the agreement.

Global Payments

Global payments are examples of a mature VBP model, and for many proponents they are the goal for healthcare payment. This model payment is twofold: a fixed per-patient fee is paid to the provider intended to cover the total cost of care for patient services during a set time interval and a payment based on value as described by Porter. The payment structure is provided as payment per patient per month or per year. Providers drive the scope of services needed to achieve the outcomes desired. The incentive is to deliver excellent and efficient patient care to maximize the payment provided. Success is predicated on having the organizational competencies and infrastructure to intensively manage care on both the patient and the population levels.


To achieve value in patient care and financially sustain healthcare delivery, a team model is essential to provide the necessary services in an efficient and coordinated manner. Medications are the primary therapeutic tool in healthcare, with medication prescriptions included in 75% of primary care visits.5 Medications are also a significant healthcare problem, causing significant morbidity and mortality and resulting in healthcare costs of $528 billion annually.6 Thus, medication management services, optimally provided by pharmacists, are integral to VBP models to achieve a goal of overall improvement of health in patients and populations. For medication management, it would make sense that pharmacists, based on their training and knowledge, would produce the best outcomes at the least cost compared to other team members.

Unlike fee-for-service where the financial driver is providing services that generate the highest revenue, VBP is driven by who, what, where, and how services are provided that will achieve the healthcare goals of a patient or population and result in value, that is, a better health and healthcare experience at an acceptable cost. The premise is to develop and use the best care strategy and therapeutic plan possible in caring for a patient. Greater financial gain is realized when the organization can maximize the number of patients they serve, with efficient and wise use of team members. If CMM provided via telehealth is the optimal care strategy, that would be the course chosen without any question. Barriers and limitations such as professional territorialism and payment are no longer the pressures driving care decisions. The services provided are chosen based on those that are most cost-effective and meet patient needs in the most effective manner by the best qualified person. Using a provider who has medication management skills but who would be better utilized in diagnostic services or choosing a provider who may not have the knowledge to optimally and efficiently provide medication management does not make sense. VBP design creates an important opportunity for pharmacists, as they are the best healthcare team member to meet patient medication needs and improve medication-related health outcomes. Justification for services does not need to be based on revenue but rather on evidence of effectiveness. Experience and data gained from CMM provided via telehealth in the Veterans Affairs system and other systems suggest value through improving patient outcomes, satisfaction, access to care, and being a cost-effective option.722


While telehealth practices were growing prior to the public health emergency, the explosion of its use since the onset of the pandemic highlights the feasibility of its widespread use and brings up questions about impact on cost of care as well as health outcomes. There are no large-scale studies on the effects of telemedicine, nor is there consistency in defining what constitutes telemedicine. In 2016, the Agency for Healthcare Research and Quality (AHRQ) published a systematic review citing the effectiveness of both remote patient monitoring and counseling for patients with chronic conditions as well as behavioral health interventions. Similarly, interventions in blood glucose and hypertension management with remote monitoring and/or video-teleconferencing showed improvement in hemoglobin A1c and blood pressure in several studies.23 A study utilizing a bedside assistant in a senior community to facilitate video telemedicine visits with primary care providers resulted in lower utilization of emergency departments.24

Overall, telemedicine shows promise to expand the reach of providers, improve chronic disease metrics, and reduce hospital and emergency department use. Further and more rigorous studies are needed to show the overall impact of pharmacy telehealth practice. Regulatory changes will prove to be an important factor in the ability to continue to scale these practices.


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    Cutler DM. What is the US health spending problem? Health Aff. 2018;37:493-497.

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    Porter ME, Larsson S, Lee TH. Standardizing patient outcomes measurement. N Engl J Med. 2016;374:504-506.

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    Slone Epidemiology Center at Boston University. Patterns of Medication Use in the United States 2006. Accessed May 13, 2021.

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    Watanabe JH, McInnis T, Hirsch JD. Cost of prescription drug-related morbidity and mortality. Ann Pharmacother. 2018;52(9):829-837.

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Scenario 1

You are working through what billing opportunities might exist for your telehealth pharmacy services. You have considered using chronic care management (CCM) codes for your telehealth pharmacy services. As part of the workflow, you have established asynchronous data collection for important lab values (such as blood glucose monitoring) and vital signs (weight and blood pressure). Patients report their data through the electronic patient-facing portal of the electronic health record, so that you can review the information in advance of their telehealth pharmacy appointment. In your research, you came across remote physiologic monitoring (RPM) codes. Are RPM and CCM billable during the same month? With your workflow design of having patients submit data asynchronously via the patient-facing portal of the electronic health record, would you meet the criteria to bill RPM?

Response 1

RPM and CCM are billable during the same month. It is important to note that time spent on RPM cannot be counted toward the monthly CCM totals. In your workflow, you would need to ensure that your method for tracking time dedicated to CCM excludes time spent on RPM activities. When evaluating whether or not you can use RPM billing, it is critical to remember that the device used to collect patient data must upload data via digital means. Requirements also state that patient-reported data are not included in RPM billing. The workflow you have established does not include a device that allows for digital data upload, but is patient-reported data. This does not meet the requirements for RPM and would not be something you could implement with the workflow you have created.

Scenario 2

You have decided to pursue the use of chronic care management (CCM) billing codes for your telehealth pharmacy services. You have discussed it with clinic leadership and everyone agrees with pursuing CCM billing. Your clinic manager does ask to have a meeting with compliance to gain their approval before moving forward. This will be a new method of billing for the clinic, and the clinic manager wants to ensure that everything is in order before proceeding. In order to help the meeting run smoothly and be successful, what should you prepare ahead of time?

Response 2

To ensure a successful meeting with compliance, a great first step would be to outline all of the requirements for billing CCM. Once you have outlined all of the requirements, designate the specific pieces of the workflow that meet each of the requirements. For example, does your clinic have a 24/7 call service that can be used for patients receiving CCM? Is there a way to document patient consent electronically in a manner that provides automated prompts so that this step isn’t missed? You will want to have each requirement outlined with a workflow step and with an explanation of how you will meet the requirement.

Often, pharmacists have to explain their scope and role to compliance officers. While the purpose of the meeting is not to discuss pharmacist scope and role, you may want to be prepared to do so. Providing documentation from state pharmacy practice acts that outline scope and cross-walking to how CCM fits within that scope can help facilitate a successful conversation with compliance.