The proliferation of managed care is introducing a host of new challenges for long-term care providers. Pressures have never been greater to increase quality and lower costs. Successful strategies entail excellent drug utilization and avoiding undue waste. Experts advise here how to do it best.

1. Managed care plans are sticklers about drug utilization, so providers need to be on their toes.

“Obviously, the least costly medication therapy is the one you don’t pay for at all,” says Robert Warnock, senior vice president of pharmacy services for Golden Living. “A lot of managed care plans are asking us to show data on medication reconciliations or therapy management because it lowers our costs on the back end.”

Under a managed care medication program, the emphasis is on diagnosis and the ability of the prescribing physician to best fit the patient to the appropriate drug and dosage, adds Michael DeFrancesco, president, First Wave Technologies. 

2. Pressures have never been greater to reduce or eliminate medication waste. Short-cycle dispensing rules, for example, can add cost and complexities, says Rich McKeon, vice president, Alternate Site Pharmacy Solutions of McKesson. 

LTC pharmacies that prosper will be the ones that implement “aggressive” business practices, invest in technology, workflow efficiencies and automation and closely integrate with suppliers to decrease costs, he adds. One such technology is automated machines that dispense oral solids. 

Adds Golden Living’s Warnock: “This allows us to go to a payer and say, ‘We can provide drugs to your patients at a lower cost because we don’t have waste.’”

3. Have thick skin when it comes to drug reimbursement rules.

 “Long-term care pharmacies must navigate managed care reimbursement policies on several levels: Medicaid reimbursement that varies by state and drug formularies, prior authorization requirements, quality limits and step therapy requirements,” says Robert Ketchum, consultant pharmacist and regional manager at Comprehensive Pharmacy Services. “These introduce such challenges as effective formulary management, purchasing and inventory control, and efficient dispensing systems to support managed care reimbursement requirements.”

4. Managed care payers understand the power of data in controlling costs, and so should you. “Facilities that understand and control their costs while maintaining quality and delivering desired outcomes will succeed,” says Robert Davis, CEO of Optimus EMR. 

Providers need to document costs and have a clear understanding of what distinguishes new business as profitable or unprofitable before taking the leap into new markets, advises McKesson’s McKeon.

5. Keep close tabs on residents undergoing multiple drug therapies, and stop any that are unnecessary, redundant or even dangerous. 

“This can reduce the risk and achieve a comparable outcome while reducing costs,” notes Warnock. “Facilities and payers have to understand that this can lower their costs and improve their quality.” 

Have a clinical pharmacist review orders and charts before meds are ordered, cautions Kevin Kirkpatrick, regional vice president, Rx RemoteSolutions. “A successful transition of care program from the hospital to a skilled nursing facility must include medication management review,” he says.

6. One of the greatest managed care pressures on providers is avoiding re-hospitalizations. Adverse drug events are a big culprit.

“Have a clinical pharmacist review meds before your resident is admitted,” says Kirkpatrick, adding that a poor transition to a skilled nursing facility that leads to a preventable hospital readmission could hurt your facility and reduce referrals from other healthcare providers.

“Any time there’s a transition, there’s a potential for drug information to be misinterpreted,” Warnock points out. 

Mistakes to Avoid


Mismanaging residents undergoing multiple drug therapies. Adverse drug events are costly, with often dire consequences.


— Following policies that could lead to expensive hospital readmissions. 

Correction: In our May edition, we incorrectly identified the affiliation of Jason Dopoulos, Steve Kennedy and Matt Lindsay. They are with Lancaster Pollard.