CPESN Increased This Pharmacy’s Revenue Sevenfold

When it comes to expanding his pharmacy business, Chris Watts faces a special challenge. His store, Valley Pharmacy in Kearney, Nebraska, is only 660 square feet. That means several potential avenues of revenue aren’t available to him. Like other entrepreneurial pharmacists, he set out in search of ways to make money outside of traditional prescription sales, but he needed something that didn’t require the use of new space.

Eventually his search led him to a program called CPESN USA—a clinically integrated network of community pharmacies that provide enhanced services and engage with payers to get paid for those services. This program would enable Watt to start counting on revenue from a new type of payment model for several services he already offered in his practice.

At first, Watts didn’t see any financial gains, but after about a year and a half as a CPESN member, his group finally secured a contract with a payer. ″First it was this pipe dream of, ‘We’re going to get paid for clinical services outside of billing prescriptions,’″ he said. ″But now, we’re starting to see all that work come to fruition.″

Through both CPESN USA and regional affiliate Nebraska Enhanced Services Pharmacies (NESP), Watts is now in group contracts with three different payers. With these contracts, Watts’s revenue from services has increased sevenfold in just two years.

The first pays him to conduct medication therapy management with its patients. He meets with each patient twice per year and receives a flat rate for each meeting—at a significantly higher rate than he receives for MTM with his traditional patients.

The second payer pays a flat rate per member every month. Rather than requiring a specific service for all patients, the payer will request different tasks for different patients throughout the year. For instance, they might want a pharmacist to speak with a patient who has started a new medication to answer any questions and make sure they are aware of side effects. Or they may request an immunization screening or medication reconciliation. There isn’t a routine or recurring requirement, so the amount of work varies from month to month. The amount paid depends on how many tasks the pharmacy completes. With 65 patients, the fee-per-member model provides a steady and lucrative stream of income for the pharmacy.

The third contract is also based on fee-per-member but requires some specific services, such as medication synchronization, adherence packaging, and delivery services. This contract is relatively new, so Watts is waiting to see what is entailed and how many patients will be included. For all the contracts, the payers send their patients to the pharmacy, so Watts doesn’t have to do any legwork to recruit them.

With these contracts, Watts’s revenue from services has increased sevenfold in just two years.

Instant returns

Although Watts participated in CPESN and NESP for almost two years before seeing any money, pharmacies that join the network now may not have to endure the wait. For CPESN pharmacies in his state, contracts have already been established through NESP, and national contracts are available with Humana. ″I guarantee you it will give you a return on investment,″ he said. ″People have already spent the time, now the contracts are here. If you join now, your return on investment is almost immediate.″

And the payout comes with hardly any investment. CPESN charges a small monthly fee and requires pharmacies to provide a certain number of services, most of which pharmacies already offer. And many of the services, like medication synchronization, provide benefits to the business even if they don’t earn payment.

The pharmacy also doesn’t have to do anything to find and negotiate the contracts with payers. CPESN has dedicated ″luminaries″—pharmacist owners and leaders of the regional affiliates—who put in the work to get the contracts. ″We kind of ride on their coattails,″ he said. ″They get the contracts lined up and we just have to perform.″

For Watts, CPESN has been the perfect solution for his small pharmacy. He’s able to perform all of his tasks for payers without having to make any major additions. ″For people with limited space, this is something great they can do because you don’t have to add this product line or something else,″ he said. ″It’s just doing their job in a different way.″

Payment Models

CPESN pharmacies get paid from the medical side of healthcare, directly from the payers. Payment methods vary for each agreement and can take these different forms:

  • Fee-for-service
  • Fee-per-member
  • Tiered fee-per-member based on patient risk
  • Rebates
  • Pay-for-performance

A Member-Owned Company Serving Independent Pharmacies

PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy-side of their business. Founded and owned by pharmacists, PBA Health serves independent pharmacies with group purchasing services, wholesaler contract negotiations, proprietary purchasing tools, and more.

An HDA member, PBA Health operates its own NABP-accredited secondary wholesaler with more than 6,000 SKUs, including brands, generics, narcotics CII-CV, cold-storage products, and over-the-counter (OTC) products — offering the lowest prices in the secondary market.


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