We’ve written numerous time about outcomes-based contracting. The concept has been around for well over a decade….. yet the practice has experienced slow uptake…. for one reason…. It’s complicated. (Note— manufacturers have been paying for ‘enhanced services’ for many years for their own use, especially for marketing purposes.)
An article on the topic is timely as the number of such contracts continues to see growth in the marketplace. If it has survived this many years, it has proof of concept.
The article is a good…. and quick read…. that spotlights the challenges. The biggest challenge is determining what services are included in the outcomes program…. and then separating the core (basic) services from any ‘enhanced’ services. The enhanced services are add-ons to what the SP would routinely provide and, therefore, can be deemed as compensable ($$).
But wait…. there’s more…. now comes the challenge of determining how much compensation is appropriate for each of the enhanced services.
But wait…. the amount of compensation can’t be so great that it could be construed as a kickback.
But wait, reporting is critical to document patient outcomes and the scope and frequency of outcomes reporting is also compensable and is the keystone in determining whether the target(s) specified in the contract have…. or have not…. been met. Compensation for reporting also needs to pass the ‘fair-market-value’ test.
These, and many other nuances, make outcomes-based contracts intimidating for specialty pharmacies, manufacturers…. and even payers that will get refunds if outcomes fail to meet contract thresholds. This is where the lawyers really get involved.
So, read the article below for a cogent recap of the process.
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