Medication Management Technology & Services: How They Work, Costs & Payment Assistance

Page Reviewed / Updated - Jun. 2017

Description

Pill reminder services, or more formally Medication Management Systems or Medication Adherence Technology, encompass a range of products with the same goal; to help individuals take their medications in the correct dosages at the right times and prevent adverse drugs events (ADEs).  In their simplest form a pill reminder service can be a pillbox with the days of the week printed on individual compartments.  However, the Medication Management Systems discussed here are considerably more robust. 

Did You Know? One study found that nearly 60% of US seniors do not take their medications as prescribed. 

 

How They Work

Prior to discussing the features of these systems, the cost savings, and peace of mind they can create, it is helpful to understand the challenges of medication adherence. Adherence is affected by many factors, such as culture, personal beliefs, and medication side effects. It is further complicated by aging issues, such as mobility and memory challenges, poor eyesight, and simply an inability to understand instructions. Proper adherence further declines as the number of scripts, number of doctors, and length of prescription increase. Failure to adhere to prescription instructions accounts for 10% of hospital admissions and that rate is even higher among seniors. Given that over 40% of seniors take at least five different medications regularly, it should be no surprise that adherence challenges exist.

Medication management services perform multiple tasks to help seniors adhere to their prescription regimens. To start, persons are notified either by alarm, a call, or an alert pushed to a special watch that lets the individual know it is time to take their medicine. They press a simple button on a machine and it dispenses the appropriate combination of medicines and any special instructions, such as "take with food". If the individual fails to take their medication, some devices will lock away the medication after a set period of time to avoid the potential of double dosing. In either case, a status report is relayed to a central location over a phone line, cellular network, or wireless Internet. Caregivers and family members can be notified of the success or failure. Alerts can be provided to appropriate parties by email or text message in the event a dosage is missed. This is of particular importance for persons with life threatening conditions that are controlled with medication. These systems also produce online reports, which shows medication adherence over time for viewing by caregivers and healthcare professionals.

Dispensing devices are programmed and refilled by family members or caregivers. There are also services that perform those activities on a family's behalf. Devices store between 10 - 30 days’ worth of medicine and manage up to 10 different medications concurrently. Devices are sturdy, have battery backups for power failures, and are compact enough to move easily between locations.  Some services are integrated with personal emergency response / electronic home monitoring services

 

Pros and Cons

Pros Cons
Large cost savings over hiring home care Individuals can willfully deceive system
Caregiver / family member peace of mind  
Improved adherence to scripts  
Immediate notification of missed doses  
Forced organization helps to identify potential drug interactions  

 

Costs and Cost Savings

 Medication management services can save families $3,000 / year over using human care providers.

To establish the cost savings associated with using a medication management system, one must determine what their costs would otherwise be and deduct the cost of the device / service. One way to estimate this is to look at the fees for medication management at assisted living communities and what is charged by home care workers.

In assisted living residences with fees for service models, we find monthly medication management fees range from $300 - $500. Similarly, we've calculated home care aide costs for medication management at one hour per day / five days per week using the lowest hourly rates available in the US. The result is no less than $300 / month.

By deducting an estimated, amortized, monthly cost for the service / device at $50, we've determined the annual cost savings of using medication management technology to be between $3,000 and $5,000.

Even greater cost savings are realized if one considers the reduced hospital admission charges associated with the improved medication adherence.

 

Pricing Models and Product Costs

There are 3 types of pricing models for electronic pill reminder / medication management services. Some vendors sell their products outright, resulting in a high upfront cost, but no monthly fees. More common is a low upfront cost and monthly service fees. The third option is no upfront cost and higher monthly service fees. Vendors using this third model are essentially renting the device to their customers.

Purchasing a device outright without monthly service costs between $500 - $1,000. With a monthly service, one can expect $300 - $500 upfront and $15 - $25 / month. Vendors that charge monthly with no upfront costs have fees in the range of $50 - $100 / month.

 

Payment Options and Financial Assistance

Medicare

Unfortunately for seniors, Medicare does not pay for electronic pill reminder services by any name (medication management, automatic pill dispensers, etc.).  

 

Medicaid

Medicaid, through HCBS Waivers, covers the cost of medication management services in several states. Medicaid is very open to covering the cost of products and services that reduce the overall need for other, more expensive Medicaid funded services. Our research has only uncovered 16 states which expressly state they cover the cost of medication management services. However, in most states, a case can be made that utilizing such a service, will, in fact, save the state money and approval can likely be gained. Sometimes, medication management is covered in combination with a Personal Emergency Response Service and other times as "Miscellaneous Home Medical Equipment".

Another form of coverage is through consumer direction in states' Medicaid waivers. Consumer direction, in the broadest sense, means that program participants are provided with funding for care and related services and given the flexibility to spend that budget as they best see fit to meet their needs. Nearly all states offer some degree of consumer direction in their Medicaid waivers, and therefore, most Medicaid waiver program participants should receive some financial assistance for medication management services. More on consumer directed Medicaid waivers is available here.

Money Follows the Person is another Medicaid option. This program pays for a variety of services that help current Medicaid-funded nursing home residents to move back into their homes. As such, medication management services would likely be an acceptable expense to enable such a move.

The states that expressly discuss coverage of medication management are listed below. Links are provided to their Medicaid waiver pages. Typically, these waivers provide between $30 - $60 / month in assistance. If one's state is not listed below, a complete list of Medicaid Waivers relevant to the elderly is available here. It is possible these Waivers will pay for coverage.

  1. Colorado
  2. Connecticut
  3. Iowa
  4. Kansas
  5. Minnesota
  6. Montana
  7. New Hampshire
  8. New Jersey
  9. Ohio 
  10. Pennsylvania
  11. South Carolina
  12. South Dakota
  13. Utah
  14. Vermont
  15. Virginia
  16. Washington
  17. West Virginia

 

Non-Medicaid State Assistance for Durable Medical Equipment (and Med. Management)

Another possible source of assistance are state non-Medicaid programs that offer support for durable medical equipment or assistive technology.  While many of these programs do not specifically declare financial support for medication management, a case can be made for coverage, especially when a program allows for consumer direction of care services.  Our analysis of these programs rules, leads us to believe the following 11 programs will offer coverage. 

  1. Arizona Non-Medical HCBS
  2. Florida Community Care for the Elderly
  3. Illinois Community Care
  4. Kentucky Hart Supported Living
  5. Massachusetts HCP and ECOP
  6. Minnesota Alternative Care Program
  7. Nebraska DPFS
  8. New Jersey JACC Program
  9. New York EISEP
  10. Rhode Island Home Care Co-Pay
  11. Texas SAIL
  12. Wisconsin COP
  13. Wisconsin Family Care and Partnership

A complete list of non-Medicaid state assistance programs the cover durable medical equipment is available here.  However, these programs' published rules and regulations were inadequate to allow for a definitive determination of their support for medication management systems.

 

Veteran's Options

For veterans, there are two programs that will cover the cost of medication management technology. 

1) Under Veterans Directed Home and Community Based Services (VD-HCBS), beneficiaries are allowed to allocate the financial assistance they receive for care services as they best see fit.  Therefore, if the veteran or their caregivers decided such a system is the best use of their funds, then they are permitted to purchase such a service.  Read more.

2) Veterans Pensions, such as the Aid & Attendance and Housebound benefits, allow beneficiaries to deduct any unreimbursed medical expenses from their incomes.  The cost of a medication management device or services is considered a medical expense and therefore can be deducted.  The veteran will then receive an increase in their pension benefit equal to the amount of the cost of the device or service.  Read more.

 

Tax Deductibility

Should a tax filer wish to deduct the cost of their medication management device or service, they would do so using the Medical Expense Credit. To be clear the regulations for this credit make no mention specifically including or excluding medication management services. However, one is permitted to deduct the cost of “Diagnostic Devices”. Diagnostic Devices are defined as including any “device used for treating an illness”. Given, medication management devices are used for medicine to treat illness, it is our interpretation that the tax code would permit the cost of medication management devices to be deducted.

 

Other Options

There are many assistance programs that provide help for the purchase of durable medical equipment and assistive technology.  Depending on a program's definitions of these categories, medication management services and systems may be covered.  It is worth noting that the ability to properly adhere to prescription instructions is considered an "instrumental activity of daily living".  Many assistance programs base their eligibility on the candidate's inability to manage these activities.   Therefore, seniors who cannot manage their medications (and have other challenges) may qualify for assistance.   Learn more about paying for durable medical equipment and assistive technology here.

 

Vendors

Interested parties may wish to research further some of the product and service vendors in medication management technology and services.  A few of the more established vendors are listed below.

  • Philips Medication Dispensing Service
  • HealthOneMed Dispense A-Pill
  • MedMinder
  • TabSafe
  • MedSignals
  • MedFolio
  • SimpleMed