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Setting up Physician Dispensing: 5 Critical Things to Know

March 8, 2018

In-house PharmacyMore and more practices, especially group practices specializing in oncology, surgery, orthopedics or multi-specialties, are opting to offer physician dispensing or in-house pharmaceutical services to their patients as an add-on to the growing “one-stop shop” trend. Even smaller practices are taking notice and considering offering ancillary service to increase revenues while improving the whole patient experience. Before you begin, there are some things you need to know that can make or break your chances of offering a successful in-house pharmacy program:

Why Offer In-House Pharmacy Services?

  • Providing in-house pharmaceutical services can remove the worry over transportation issues for elderly and disabled patients, who may have to arrange for rides to appointments and elsewhere.
  • The “one-stop shop” experience can ensure that patients have complete access to medications and other necessary supplies, which in turn supports the uninterrupted plan of treatment, as was the experience of the California-based Sierra Pacific Orthopedic & Spine Medical Group.
  • Practice revenues reportedly increased from 10-15 percent  for well-run in-house pharmacies thanks to repeat business as well as savvy marketing and pharmacy management.

Drawbacks and Precautions

Before opening an in-house pharmacy, consider the following points:

  • Some payers may have restrictions on where prescriptions may be filled.
  • Payers may require dispensing physicians to carry extra liability insurance.
  • Some brand-name drugs may be too expensive to offer at a reasonable cost, depending on your specialty, such as oncology.
  • The consent of all physicians in the practice is needed to get on board with an in-house pharmacy – often easier said than done.
  • Don’t undertake an in-house pharmacy without first consulting with an attorney who can draw up the correct paperwork and advise the practice on compliance and other rules. Laws governing pharmacies vary from state to state – be sure to understand your state’s laws and licensing requirements.

Getting Started

  • Decide if your practice can benefit from an in-house pharmacy: to succeed you need a sufficient number of repeat patient-customers as well as involving your staff to encourage patients to utilize the service.
  • Are the necessary financial and staffing resources available to set up a pharmacy and hire a pharmacist or technician to staff it?
  • If the above answers are “yes”, the next step is to consult with an attorney experienced in medical and pharmaceutical management laws and regulations.
  • Determine which medications you need or wish to carry, based on which are most frequently dispensed as well as which payers will reimburse (i.e. commercial insurance or Medicare.)
  • Work out contractual agreements with payers to ensure that your practice meets their requirements for reimbursement, such as additional liability coverage and so on.
  • Hire an experienced retail pharmacist or licensed pharmacy technician to fill prescriptions.

Negotiating Drug Pricing with Payers

Diane Gerards-Benage of the Quincy (Illinois) Medical Group recommends that providers contact payers and negotiate drug pricing on the same price levels as their mail-order pharmacies by selling convenience to patients as well as improved adherence to protocols.

Related Article: How Does an In-House Pharmacy Help to Increase Revenue?

Cost-effective alternatives for smaller practices include in-office dispensing not requiring a licensed pharmacist or technician. Teaming with third-party vendors such as PrimaryRX, or Physician Partner help you handle paperwork and insurance contracts, while supplying prepackaged quantities of frequently-prescribed drugs. Physicians Pharmaceutical Corp. (PPC) allows doctors to fill prescriptions from bulk inventories rather than restrict dispensing to prepackaged medications.

Benefits of Partnering with a Full-Service Medical Practice Management Company

M-Scribe’s experienced team has worked with practices of all sizes and specialties to boost cash flow through better claims management and regulatory compliance. If you’re thinking of setting up physician dispensing or in-house pharmacy, be sure to consult with one of our experienced pharmacists to develop a comprehensive plan, including sourcing the best pharmaceutical prices as well as training and compliance. Call M-Scribe at 770-666-0470 or email me at h.gibson@m-scribe.coml for your complementary consultation.


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