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PRACTICE REPORTS Pharmaceutical care program

1225 Am J Health-Syst PharmVol 69 Jul 15, 2012

Implementation of a comprehensive pharmaceutical
care program for an underserved population
LISA A. MASCARDO, PHARM.D., is Assistant Director;
and KIMBERLY A. SPADING, B.S.PHARM., is Manager,
Ambulatory Care Pharmacy, University of Iowa
Hospitals and Clinics (UIHC), Iowa City. PAUL W. ABRAMOWITZ,
PHARM.D., FASHP, is Chief Executive Ofcer and Executive Vice
President, American Society of Health-System Pharmacists,
Bethesda, MD; at the time of writing, he was Chief Pharmacy
Ofcer, UIHC.
Address correspondence to Dr. Mascardo at the Department of
Pharmaceutical Care, University of Iowa Hospitals and Clinics, 200
Hawkins Drive, Iowa City, IA 52241 (lisa-mascardo@uiowa.edu).
The authors have declared no potential conicts of interest.
Copyright 2012, American Society of Health-System Pharma-
cists, Inc. All rights reserved. 1079-2082/12/0702-1225$06.00.
DOI 10.2146/ajhp110490
An audio interview that supplements the
information in this article is available on
AJHPs website at www.ajhp.org/site/misc/
ccess to and affordability of
medications have a direct im-
pact on the success of phar-
maceutical care. According to a
report by the Robert Wood Johnson
Foundation in 2009, an estimated 49
million Americans are uninsured or
Between 2003 and
2007, the proportion of nonelderly
adult Americans who went without
prescribed medications due to the
inability to afford them increased to
17.8% from 13.8%.
Iowa has had
an indigent care program for almost
100 years, but as the number of
uninsured or underinsured patients
has grown in the past decade to sur-
pass the states ability to meet their
needs, the program has changed
University of Iowa Hospitals and
Clinics (UIHC) is a 734-bed compre-
hensive academic medical center and
regional referral center. Indigent care
laws passed in Iowa, beginning as
early as 1915 and continuing through
the present day, have had a constant
Purpose. The implementation of a pre-
scription benet program for low-income
patients emphasizing clinical pharmacist
services and strict formulary control is
described, with a review of program expen-
ditures and cost avoidance.
Summary. In 2006, University of Iowa
Hospitals and Clinics (UIHC) launched a
program to provide a limited prescription
benefit to indigent patients under the
IowaCare Medicaid demonstration waiver.
Sudden dramatic growth in IowaCare
enrollment, combined with sharp budget
cuts, forced UIHC pharmacy leaders to
implement creative cost-control strategies:
(1) the establishment of an ambulatory
care clinic staed by a clinical pharmacy
specialist, (2) increased reliance on an al-
most exclusively generic formulary, (3) col-
laboration with social services sta to help
secure medication assistance for patients
requiring brand-name drugs, (4) optimized
purchasing through the federal 340B Drug
Pricing Program, and (5) the imposition of
medication copayments and mailing fees
for prescription rells. Now in its seventh
year, the UIHC pharmacy program has
expanded indigent patients access to phar-
maceutical care services while reducing
their use of hospital and emergency room
services and lowering program medica-
tion costs by an estimated 50% (from $2.6
million in scal year 2009 to $1.3 million in
scal year 2010).
Conclusion. The UIHC ambulatory care
pharmacy implemented a prescription pro-
gram in collaboration with social service
workers to address the medication needs
of the states low-income and uninsured
patients in a scally responsible manner by
managing purchasing contracts, revising
a generic formulary, implementing copay-
ments and mailing fees, and reviewing
medication proles.
Am J Health-Syst Pharm. 2012; 69:1225-
inuence on patient access and care
at UIHC.
The Iowa Indigent Patient Care
Program (previously known as the
State Papers program), originally
established under legislation en-
acted in 1915, enabled every Iowa
county to refer a specied number
of patients for care at UIHC at no
cost to the patient or the county.

Patients eligible for State Papers ben-
ets received comprehensive care at
UIHC, including a 90-day supply of
medications for chronic disorders
PRACTICE REPORTS Pharmaceutical care program
1226 Am J Health-Syst PharmVol 69 Jul 15, 2012
at each visit. Recognizing that travel
to UIHC to get medication rells
could be a hardship for many pa-
tients, the medical centers pharmacy
implemented a mail-out program to
ensure continuous medication provi-
sion throughout the year. Program
costs were controlled through the
progressive design and adaption of a
medication formulary.
Approximately 3600 patients were
served by the State Papers program at
the point of peak enrollment in 2005.
This program was in place until June
30, 2005, when it was replaced by the
IowaCare Program.
IowaCare program
Created by the IowaCare Act
passed by the state legislature in s-
cal year 2005, IowaCare was designed
as a Medicaid demonstration waiver
program to provide patients with
a limited health benefits package
and a limited provider network.
was intended to expand health care
coverage to a larger number of low-
income, uninsured adults and pro-
vide financial stability for Iowa
safety net hospitals providing large
amounts of uncompensated care.
Since July 1, 2005, IowaCare has
covered adults age 1964 years who
have incomes of 200% of the ap-
plicable federal poverty level, who
lack comprehensive private insurance,
and who are not otherwise eligible for
Medicaid. Initially, IowaCare provider
institutions included Broadlawns
Medical Center in Des Moines (for
Polk County residents) and UIHC
(for all other Iowa counties). Services
covered include inpatient and out-
patient hospital services, physician
and midlevel practitioner services,
limited dental services, and tobacco
cessation services.
Unlike the State Papers program,
IowaCare imposes no cap on the
number of eligible patients, but the
IowaCare legislation specied only
a limited prescription benet. Per
agreement with the Department of
Human Services, a 10-day supply
of medications is provided at the
time of a patients discharge from
an inpatient stay. Participants in the
program are asked to pay premiums,
but they may request that these be
waived as a nancial hardship. Pa-
tients previously enrolled in the State
Papers program continued to receive
supplies of medications for chronic
In an attempt to best serve and
more easily follow the needs of the
IowaCare patient population, UIHC
created a new clinic (Primary Care
Clinic North) for program enrollees.
In the spring of 2006, a full-time
equivalent (FTE) clinical pharmacy
specialist position was established at
the clinic. The position was nan-
cially justied by planned pharmacist
initiatives such as the development
and implementation of a formulary
to optimize care and control costs;
collaboration with prescribers to
recommend cost-effective therapy;
review of therapies to optimize out-
comes, reduce polypharmacy, pre-
vent adverse drug events, and ensure
medication compliance; monitoring
of hospitalizations; and working with
inpatient pharmacists to facilitate ap-
propriate discharge prescribing and
help track medication use among
IowaCare participants.
Medication Assistance Center
In the summer and early fall of
2005, ambulatory care pharmacy
managers, clinical pharmacy special-
ists, and clinical pharmacists worked
closely with the UIHC social services
department to manage the transi-
tion from the State Papers program
to the IowaCare program. Before
the transition, two social workers
were responsible for helping patients
complete applications for medica-
tion assistance programs (MAPs);
the transition away from primary
reliance on the large State Papers
formulary toward reliance on MAPs
(when generic medications were not
available) meant their work would
increase substantially. A decision
was made in July 2005 to continue
to cover medications for chronic
diseases during IowaCares rst year
for patients previously covered by
the State Papers program. In a shared
FTE position, two pharmacist fi-
nancial counselors worked with the
ambulatory care clinical pharmacy
specialists to review the medication
proles of the more than 1500 for-
mer State Papers patients deemed
to have chronic conditions that war-
ranted ongoing medication coverage,
recommend conversions to lower-
cost generic alternatives, and contact
prescribers to request changes in
therapy. Patients who were identied
as needing brand-name medications
were referred to MAP social workers
for assistance lling out applications.
The drastic reduction in medi-
cation coverage resulting from the
transition from State Papers to
IowaCare led to the closure of one
of three UIHC ambulatory care
outpatient pharmacies in 2005. The
clinic space was reopened as the
UIHC Medication Assistance Center
in July 2006, providing work space
for two social workers, two phar-
macist financial counselors, and
a pharmacy technician to handle
MAP applications and medication
distribution, as well as a place for
meetings with patients.
IowaCare Prescription Program
By May 2006, approximately
16,000 patients were enrolled in
IowaCare, with approximately 10,000
patients designated to receive servic-
es at UIHC. The number of patients
covered by IowaCare far exceeded
the systems ability to provide ap-
pointments. The limited medication
benet (only a 10-day supply of med-
ications at discharge) also proved
challenging during the rst year of
the IowaCare Prescription Program.
A small number of patients previous-
ly covered by State Papers continued
to receive medications for chronic
conditions identied before the tran-
sition to IowaCare, but medications
PRACTICE REPORTS Pharmaceutical care program
1227 Am J Health-Syst PharmVol 69 Jul 15, 2012
for newly diagnosed conditions were
not covered.
During this period, approximately
2000 former State Papers patients
became eligible for Medicare Part D
benets; despite this development,
the gap in the provision of pharmacy
services for the majority of IowaCare
patients quickly became evident.
Medical providers and pharmacists
alike could not effectively manage
patients who could not afford to take
their prescribed medications. There
were increases in repeat hospitaliza-
tions and emergency department
visits due to therapeutic failures
related to medication nonadher-
ence. Registration and billing data
for the 12 months ending on April
30, 2006, indicate that a total of 6600
IowaCare patients incurred hospital
charges during that periodan an-
nual hospital utilization rate of 66%.
The costs to UIHC of caring for the
patients were more than the state ap-
propriation for reimbursement.
Cost analysis. In an effort to
improve the care of program par-
ticipants and decrease overall health
care costs, UIHC pharmacy leaders
proposed the concept of providing
medications to IowaCare patients
through a program similar to that cre-
ated under the State Papers program
(i.e., one providing full prescription
benefits). Prescription volume and
cost estimates were performed using
IowaCare enrollment numbers, pa-
tient visits to date, and historical pre-
scription data from the State Papers
program. The calculations projected
a volume increase of approximately
101,000 prescriptions per year, with
just over 52,000 prescriptions to re-
quire mailing, at an estimated cost
of $2.2 million (excluding personnel,
packaging, and mailing expenses of
$800,000). Adding to that gure the
projected $3 million cost of provid-
ing maintenance medications to
patients grandfathered in from the
State Papers program resulted in a
total annual program cost estimate of
$4.9 million.
Formulary management. Claims
for the 10-day discharge supplies
initially covered by the IowaCare
program were submitted electroni-
cally to the Iowa Medicaid program
for reimbursement and followed
the Medicaid preferred drug list,
which included many brand-name
medications. While the State Papers
prescription benet had also cov-
ered both brand-name and generic
medications on formulary, it would
not have been feasible to implement
the same formulary under IowaCare
given the much higher number of
patients enrolled. With the entry of
generic versions of many drugs into
the market at that timeincluding
key classes such as angiotensin-
converting enzyme inhibitors, statins,
and selective serotonin-reuptake
inhibitorsit was determined that
the pharmaceutical needs of the
IowaCare population could be met
by using a generic-only medication
formulary. This decision was nal-
ized after a determination that pre-
scription program expenses would
not be covered by the Medicaid
waiver program but would instead
be borne solely by UIHC. It was
therefore decided before the start of
IowaCares second year of operation
that UIHC would move forward with
the creation of a prescription program
to address the issues stemming from
constricted medication coverage.
The goal set for the planned
UIHC-managed prescription pro-
gram was to control overall health
care costs and utilization by main-
taining patients health through the
use of cost-effective and clinically
appropriate medication regimens.
The IowaCare pharmacy benefit
would provide up to 30-day supplies
of generic medications and a mail-
out service to help facilitate rells.
While prescription program costs
would not be reimbursable through
the IowaCare appropriations process,
UIHC leaders felt that the program
would result in overall cost savings
for the institution by preventing
hospitalizations and emergency and
clinic visits. The prescription pro-
gram was initiated in August 2006.
Cost-management strategies
In the six years since the incep-
tion of the IowaCare Prescription
Program, judicious management of
medications provided to patients
with IowaCare coverage has proved
crucial to the programs financial
viability. As the number of patients
has increased far beyond the original
projections, the number of pre-
scriptions provided has grown pro-
portionally. As UIHC continues to
provide pharmaceutical care services
without reimbursement, a number
of tactics have been employed to en-
sure that drug costs are kept in check
without compromising patient care.
Extensive pharmacist involvement
with the UIHC medical team has
also been a key to the success of the
generic-only formulary.
Optimized drug purchasing. As
a disproportionate-share hospital
eligible to participate in the federal
340B Drug Pricing Program, UIHC
has been able to implement changes
in purchasing practices to capitalize
on 340B contracts. This has been
key in ensuring the provision of the
lowest-cost medication services.
During the initial years of the pro-
gram, staff education regarding con-
tract and inventory issues helped to
promote a general awareness of the
importance of cost control among
all pharmacy staff. Pharmacists and
technicians who previously had little
involvement in medication order-
ing or inventory are now asked to
inform UIHC management of cases
in which they nd more-affordable
options available. Largely as a result
of the programs ongoing emphasis
on cost control, the average drug cost
per prescription lled dropped from
$16.06 in 2007 to $8.64 in 2011 (Fig-
ure 1); by comparison, in 2008 the
national average retail prescription
cost was $71.69, with an average drug
cost of $59.50.
PRACTICE REPORTS Pharmaceutical care program
1228 Am J Health-Syst PharmVol 69 Jul 15, 2012
Formulary management. As at
other large hospitals, UIHC formu-
lary maintenance is primarily driven
by inpatient needs. The IowaCare
outpatient formulary was origi-
nally intended to include all generic
medications on the UIHC formulary
and a 30-day supply of brand-name
medications (as a bridge to MAP
approval or other payment arrange-
ments). Applying this inpatient-style
formulary to an outpatient popula-
tion has not consistently t with the
goals of preventing rehospitalization,
meeting patient needs, and manag-
ing IowaCare Prescription Program
costs. A number of exceptions in
coverage have been made to close
coverage gaps.
For example, the large number of
patients with diabetes and associated
long-term complications has neces-
sitated the coverage of brand-name
insulins, syringes, blood glucose
meters, and testing supplies. Specic
brands of insulin and supplies were
added to the formulary. The very
selective use of a few brand-name
medications has been considered im-
portant enough in preventing rehos-
pitalization that they are provided
indenitely until a MAP supply is
received. To ensure the optimization
of 340B contract pricing, a brand
preferred over generic list was estab-
lished and is continuously updated.
This list allows the dispensing of
brand-name drugs if they are avail-
able through the 340B program at
prices lower than those of equivalent
Medication prole reviews. With
increasing numbers of patients seen
in UIHC primary care clinics, thor-
ough medication reviews are difcult
but crucial. Many patients new to the
program are using a long list of medi-
cations reecting local provider pref-
erences or whatever samples could be
provided. Before forwarding requests
for MAP applications to the social
work staff, a pharmacist or pharmacy
student completes a prole review,
looking for opportunities to switch
patients from brand-name products
to lower-cost therapeutically equiva-
lent alternatives and working with
providers to implement changes; this
provides for consistency of treatment
and avoids time spent on unneces-
sary MAP applications.
Refill mail-out program. Iowa-
Care patients travel to UIHC from
as far as six hours away by car, so the
need to mail rells was immediately
apparent to prescription program
leaders. The initial estimate of mail-
ing costs was based on a projected
average mailing fee of $8 per pack-
age and an anticipated volume of
approximately 52,500 packages per
year. That estimate proved to be
high, with the maximum number of
packages mailed and shipped reach-
ing about 25,000 during scal year
2007 at an average cost of $4.21 per
Copayments and mailing fees. By
the end of the programs 2008 scal
year, the number of IowaCare pre-
scriptions lled annually exceeded
the predicted number of 150,000 by
almost 50,000. Filling almost 200,000
IowaCare prescriptions and mailing
over 25,000 packages that year posed
a number of challenges. UIHC phar-
macy leaders decided that a greater
patient accountability was needed,
as concerns regarding hoarding and
inappropriate use had surfaced.
In early 2009, IowaCare ofcials
began planning for the implemen-
tation of a new requirement that
patients make copayments and pay
mailing and shipping fees. As the
program receives no state funding,
decisions regarding specic copay-
ment amounts and mailing charges
were determined by pharmacy and
hospital leadership. It was decided
that patients would be charged $4
per prescription up to a limit of $20
per calendar month. Shipping fees
of $5 for regular mail and $10 for
overnight or special shipping were
applied. The logistics of billing and
collection, as well as ways of handling
cases of inability to pay, had to be
determined. Effective on March 1,
2009, the copayment plan was put
into place. In addition to increasing
patient accountability and helping
Figure 1. IowaCare Prescription Program cost per prescription in scal years 200711
(the scal period is July 1June 30 for all years except 2006; that year, the program
reporting period began on August 14).
Fiscal Year

2007 2008 2009 2010 2011
Drug cost per prescription
Average cost per prescription
minus average copayment
PRACTICE REPORTS Pharmaceutical care program
1229 Am J Health-Syst PharmVol 69 Jul 15, 2012
to address real or perceived system
abuses, the copayments and mail-out
fees helped reduce program costs by
approximately $600,000 in the most
recent scal year (2011).
Implementation of the copayment
requirement brought challenges as
well as benets. Initially, the number
of billing statements sent to patients
increased dramatically, and some
patients were unable to afford the
modest copayments. The pharmacy
departments existing collections
policy was reviewed and adjusted to
ensure that it did not adversely affect
the hospitals bad debt. Under the re-
vised policy, patients with any history
of bad debt are placed on cash-only
status and must prepay before medi-
cations are mailed or shipped. Co-
ordination with the hospitals social
services department has helped pre-
vent any delays in patient discharges
due to inability to pay. The education
of all staff regarding pharmacy busi-
ness ofce policies, coupled with the
consistent application of the collec-
tions policy, has helped stabilize the
number of statements and accounts
Current challenges
The number of IowaCare enrollees
has far exceeded the number predict-
ed in 2005. It was originally predicted
that IowaCare would cover 14,000
individuals; to date, over 72,600 indi-
viduals have been covered. A number
of factors have contributed to this
increase, including the economic
recession and the historic Iowa City
ooding that resulted in job losses in
2008. Moreover, during the depths of
the recession in 2008, UIHC experi-
enced a budget crisis. Already strug-
gling with increases in the number of
IowaCare patients and the prescrip-
tion volume, the pharmacy was
forced to deal with a reduced person-
nel budget and resulting decreases
in staff. Those pressures forced a
review of the pharmacys workload,
and it was decided that medications
for chronic illnesses would be pro-
vided in 60-day rather than 30-day
supplies; the increased supply quan-
tity decreased the total number of
prescriptions (temporarily) and the
number of mail-outs.
Even with the increase in patient
numbers, the management of the
UIHC prescription benet has en-
sured the continued provision of
care. Based on the original projec-
tions (a program cost of $5.18 mil-
lion per year initially, with a conser-
vative estimate of 7% annual growth
in prescription volume), current pro-
gram costs were expected to be about
$6.8 million annually; instead, more
patients are being served at a cost of
$3.4 million per year. As the result of
vigilance in formulary and contract
management, program medication
costs have decreased by nearly 50%
(from $2.6 million in fiscal year
2009 to $1.3 million in scal year
2011; Figure 2). Active medication
management by clinical pharmacists
at the patient level, collaboration
among care providers (physicians,
pharmacists, and social workers),
and prudent business practices have
all contributed to the continued suc-
cess of the program.
The impact of the prescription
benet program in terms of patient
outcomes and cost avoidance is
more difcult to quantify. Relative
to a hypothetical scenario in which
IowaCare (or other uninsured)
patients had continued to access
UIHC emergency room and other
hospital care at the rate seen in 2006
(66% utilization), it could be reason-
ably inferred that many millions of
dollars in cost savings have resulted
from implementation of the pro-
gram. More important, patients with
chronic medical conditions such as
diabetes and hypertension are receiv-
ing more consistent treatment, which
should ultimately help reduce associ-
ated morbidity and mortality.
Current and future challenges
The IowaCare Medicaid dem-
onstration waiver was renewed for
the period October 2010December
2013 and updated to include chang-
es designed to facilitate compli-
ance with new federal health re-
Figure 2. IowaCare Prescription Program costs and revenues in scal years 200711
(the scal period is July 1June 30 for all years except 2006; that year, the program
reporting period began on August 14). UIHC = University of Iowa Hospitals and Clinics.
Fiscal Year


2007 2008 2009 2010 2011
Drug cost
Shipping cost
Personnel cost
Total cost to UIHC
Copayment and
mailing fee revenues
PRACTICE REPORTS Pharmaceutical care program
1230 Am J Health-Syst PharmVol 69 Jul 15, 2012
form requirements. Implemented or
planned changes include expanding
the program to medical homes
based at 8 of the states 13 Federally
Qualied Health Centers, including
UIHC and Broadlawns Medical Cen-
ter. Two new medical homes were
created in 2010. While many patients
reassigned to the new medical homes
have beneted from reduced travel
times to IowaCare facilities, some
have experienced difculties secur-
ing appointments, while changes in
medication formularies and program
guidelines have posed challenges for
other patients. To ease the transi-
tion, it was decided that the program
would honor all valid medication
rells until transferred patients es-
tablish relationships with their new
care providers.
UIHC is officially designated
to serve as a medical home for the
county in which it resides, as well
as the nine surrounding counties.
However, until the Iowa Medicaid
program opens the additional medi-
cal homes that are planned, UIHC
continues to provide coverage to
all IowaCare patients in the state
not otherwise assigned to a medical
More than six years after imple-
mentation of the prescription pro-
gram, a number of challenges and
opportunities are evident. The billing
of assigned copayments and mailing
charges has been a manual process;
as this program is unique to UIHC
and not funded from outside sources,
available solutions have so far been
limited. We believe that the provision
of pharmaceutical care to this patient
population has improved outcomes
in a number of ways, but mecha-
nisms for tracking and measuring
outcomes are needed. Continuity of
care continues to be an issue, as some
patients continue to seek a portion
of their care from outside providers
and others are being sent to medi-
cal homes other than the one on the
UIHC campus. However, we see all
of these challenges as opportunities
for improvement. With time and ef-
fort, billing can be streamlined, out-
comes can be measured, and better
continuity of carean elusive goal
at all points across the health care
continuumcan be achieved.
The UIHC ambul atory care
pharmacy implemented a prescrip-
tion program in collaboration with
social service workers to address
the medication needs of the states
low-income and uninsured patients
in a fiscally responsible manner by
managing purchasing contracts,
revising a generic formulary, imple-
menting copayments and mailing
fees, and reviewing medication
1. Dubay L, Cook A. How will the uninsured
be affected by health reform? Non-elderly
uninsured. Timely Analysis of Immediate
Health Policy Issues. 2009; Aug:1-8.
2. Felland L, Reschovsky JD. More non-
elderly Americans face problems affording
prescription drugs. Center for Studying
Health System Change Tracking Report.
2009; Jan(no. 22).
3. University of Iowa Hospitals and Clin-
ics. Overview of the Indigent Patient
Care Program: presented to the Board
of Regents, State of Iowa (December 16,
2004). www.regents.iowa.gov/Meetings/
PatientCare.pdf (accessed 2012 Apr 4).
4. IowaCareIowas 1115 demonstration
waiver: presentation to Health and Human
Services Appropriations Subcommittee
(February 10, 2011). www.legis.iowa.gov/
DOCS/LSA/SC_Material sDist/2011/
SDJRB027.pdf (accessed 2012 Apr 4).
5. Lundy J. Prescription drug trends. Kaiser
Family Foundation. 2010; May:1-10.
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