Prescription drug costs account for a significant portion of long-term care (LTC) and skilled nursing facilities’ expenses.
Consequently, facility operators seeking to improve their bottom line should understand how their LTC pharmacy relationship impacts their net costs.
While most facility administrators recognize the importance of budgeting efficiently, many don’t know where to begin. However, most can start by clearly understanding what a long-term care pharmacy relationship entails and its importance.
Build a Strong, Transparent LTC Pharmacy Relationship
Simply put, the long-term care pharmacy relationship is the partnership between a skilled nursing or LTC facility and its provider of medication for its residents.
Establishing a good, transparent relationship plays a significant role in minimizing a facility operator’s drug spending. Below are a few reasons why it’s important.
Develop a Better Understanding of Pharmacy Contracts
One of the most common mistakes made by LTC operators is not knowing what their pharmacy contracts include. However, not being aware of the terms and conditions could cost you money.
To help you understand what you’ve agreed to, you need a partner like SRX, whose experts can help get you to get better terms.
A good LTC pharmacy will adjudicate (or prevent) unapproved prescriptions from being included in the pharmacy bill, even though they are not required to do so. However, not all pharmacy partners are willing to adjudicate, leaving operators to handle credits and returns on their end.
Finding a good pharmacy partner and negotiating a fair contract with favorable pricing terms, particularly with clear provisions on provided services, allow your facility to have an efficient adjudication process that reduces overall costs.
Many LTC and skilled nursing facility operators don’t know they’re entitled to drug manufacturer rebates. This means they’re missing out on substantial dollars they could have invested back into their operations.
With the right LTC pharmacy relationship, pharmacy partners are upfront about the rebate process, allowing you to claim what is really yours.
Now that you know the advantages of building a transparent LTC pharmacy relationship, here are three key areas that operators should look at when evaluating a contract:
- Pricing: A good pharmacy partner is transparent about their pricing structure, basing it on published drug pricing sources plus dispensing fees instead of billing operators at “pharmacy cost” or a flat fee.
- Rebates: Transparent pharmacies do not submit claims on behalf of operatorst.
- Processes: The right pharmacy partner should automate its processes to streamline invoicing, prevent errors, and expedite returns and credits rather than rely on outdated technology and systems that often result in errors and delays.
What Happens When You Have the Wrong Pharmacy Partner
As a facility operator, working with the wrong pharmacy can have negative consequences on your operations, such as the following:
- Higher Costs: Discrepancies may arise if your pharmacy partner is not transparent with their pricing and rebate procedures. For example, non-disclosure of third-party vendor fees might result in paying higher prescription costs.
- Wasted Time: Facility operators who choose the wrong pharmacy partner often have to identify and fix numerous transaction errors. This results in an increase in your workload and wasted time. Plus, the longer you wait to seek credit for the errors, the less likely you are to recoup them.
- Non-Compliance: Some pharmacies may not be too keen on protecting operators against non-compliance regarding rebates. They are more focused on claiming rebates and keeping their partner operators in the dark about contract and rebate regulations.
How SRX Can Help
To be effective in your role as a facility operator, you’ll need first to address the question, “what does a good long-term care pharmacy relationship look like?” Afterward, look for technological tools to support your management duties.
SRX automates drug spend invoice auditing to optimize manufacturer drug rebates and reduce net drug costs. Our comprehensive data-driven drug cost management system has various solutions for your operators. SRX helps skilled care facilities minimize their net costs without having to reduce their number of employees. Our technology also enhances your current operations, boosts efficiency, and saves money.With our proprietary technology for drug cost management, we integrate formulary parameters to minimize waste and recommend cost-effective options. As a result, we have helped operators maximize their drug spending and achieve cost savings of approximately 11 percent. Our results from working with other LTC operators speak for themselves.
See What We Can Do
Drug cost management is an area that SRX specializes in, which is why we’ve built a solution to address related issues that constantly plague long-term care facilities. Besides finding a good pharmacy partner, working with us results in significant cost savings and unparalleled efficiency in controlling drug costs.Contact us today to find out how SRX can help you optimize operations when you schedule a free demo.