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How Therapeutic Interchange Is Helping SNFs Save on High Drug Costs

Swap Costly Medications for Safe Alternatives With a Simple Letter

Therapeutic interchange is the practice of replacing one or several medications with a therapeutically equivalent alternative. Medications included in a therapeutic interchange program must be reviewed and approved by an appropriate clinical team. The prescribing practitioner involved in the care continuum must have also signed and agreed to the interchange in order for the change to be made. 

As the healthcare system works within strict reimbursement parameters, global therapeutic interchange (TI) offers providers—especially those in skilled nursing and long-term care (LTC)—a way to increase compliance with an established formulary and draw down on costly medications prescribed on a per-patient basis without impacting the quality of care. Since these providers have a large resident population receiving a wide variety of treatments, the cost of medications quickly becomes one of the largest operating expenses for long-term care operators. 

By seeking out more cost-effective alternatives, savings in the order of tens of thousands of dollars can be achieved each month on pharmacy bills.

How Are Therapeutic Interchanges Done?

Pharmacy specialists first work with clinical staff at LTC facilities to develop a formulary (a list of approved medications that the facility’s prescribers should consider when choosing medications for their residents’ therapy). Medications that are non-preferred are those prescribed that have an approved, preferred alternative and, as such, may represent opportunities for global therapeutic interchange. 

The TI letter is a statement to parties involved that the prescriber would like to change a given medication to an alternative that has the same clinical efficacy. Once a TI letter is signed by a prescriber, this interchange results in the pharmacy dispensing that alternative whenever the other specified medication is prescribed.

Since LTC pharmacies handle a large volume of medications, using TI letters to manage your medication formulary can lower dispensing and labor costs.

NOTE: Global therapeutic interchanges can only be performed in some states. To find out if your facilities can take advantage of the benefits of TI, contact an expert at SRX.

Why Are Therapeutic Interchanges Done?

As similar medications can be manufactured by several different companies, certain savings can be achieved by selecting a medication produced by a given company that offers the lowest net cost. At SRX, we work to lower the net cost of medications by working with pharmaceutical manufacturers to capture extra discounts in the form of rebates for certain medications. This information is fed into our proprietary database which then analyzes our customers’ facility drug utilization and calculates the lowest net cost medications in a specific therapeutic class of drugs. 

As drug costs continue to rise across the board, unlocking these savings has become a welcome lifeline for many LTC operators.

Beyond achieving savings through rebates, some medications may be covered by insurance plans while others may not. In order to stay within reimbursement frameworks established by payers, including Medicare and Medicaid, therapeutic interchanges may be administered so facilities can be appropriately reimbursed for providing safe, effective care.

An additional benefit to implementing TI is the efficiency it bakes into dispensing. By automating the interchange of medications, the time it traditionally takes to contact a prescriber and have an interchange approved—which can delay timely administering of medications—is eliminated.

Learn More About Drug Rebates

How Do I Know an Alternative Medication Is Safe?

Thanks to the diligence of experts in pharmacy operations, facility administrators know that interchanged medications are clinically effective and therapeutically equivalent. This means treatment for the patient is efficacious and safe, even when the manufacturer of their medication may not be the same.

In addition to understanding the chemical makeup of medications, these specialists can build effective formularies that take into consideration the latest clinical research and help build prescribing guidelines for clinical staff in your facility that ensure safe treatment while drawing down on costs and reducing waste or returns.

Where to Get Started Making Changes at Your Skilled Nursing Facility

The best place to get started at your own LTC facility is to find proven pharmacy operations experts who know and understand the needs of skilled nursing facilities and their pharmacy partners. With their knowledge, you can establish a strong working relationship between facility and pharmacy, opening the door to cooperative efforts, like making therapeutic interchanges that draw down on costs for everyone involved. 

Such experts are intimately familiar with the pharmaceutical industry and know exactly which medications are safe alternatives that also adhere to the reimbursement guidelines of payers and/or are eligible for manufacturer rebates. 

To learn more about the kinds of results you can expect working with experts in pharmacy cost management at LTC and skilled nursing facilities, explore SRX’s suite of Pharmacy Management services. We deliver our clients unparalleled savings that help them achieve their lowest drug cost, including automating drug rebates, identifying pricing discrepancies, and helping with complex pharmacy contracts. For many operators who work with SRX, the relief we deliver is priceless and the savings are significant.

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Related Articles:

Why You Need To Be Thinking About OTC Management at Your LTC Facilities

5 Ways to Take Control of LTC Facility Drug Costs

How to Simplify LTC Prescription Drug Spend with Adjudication


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SRX is a unified drug cost management solution for long-term care operators. We achieve unrivaled drug cost savings by combining our proprietary technology with expert advisors. SRX’s solutions automate drug rebates, optimize pharmacy management practices, increase managed care exclusion reimbursements, and provide cost-effective employee prescription benefits. SRX guarantees quarterly rebates are paid on time, every time, with no out-of-pocket cost.


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