How Automating your Drug Utilization Review can Transform your Pharmacy Relationship
April 21, 2020
Managing the drugs that come in and out of your long-term care facility is no small task, and mis-managing your medication-related processes can result in overspending on the second largest cost center for operators (outside labor).
From defining a formulary, to ensuring your pharmacy partner adheres to your contract and the dispensing rules you define, optimal medication-related processes and cost management result from leveraging automation, expertise, and a clearly defined rule set.
Establishing a rule-based, technology-driven drug utilization review (DUR) is the best way to take control of your pharmacy expenditures. An effective DUR begins with a thoughtfully-designed formulary that outlines the drugs that best meet the financial and clinical needs of your facility and your patient population. Once this formulary is in place, you can integrate additional rules to help contain costs and build accountability into your relationship with your pharmacy.
The right pharmacy benefit partner should be able to guide you with some predetermined DUR rules from which to build a customized rulebook for your facility. Rules include anything from defining the max tablet quantity or dosage, to a max dollar amount for a particular drug, or simply following the established formulary. SRX, a technology solution for pharmacy benefit management, is able to automate administration of these rules. Scott Taylor, CEO, explains, “Many facilities are unaware of the importance of setting controlled boundaries with their pharmacy partner. If you can customize these rules and build them into a technology-based process, your ability to control your pharmacy spend increases significantly. Technology also allows you to hold your pharmacy partner accountable by automating rule administration which increases transparency and insight into your invoices.”
While some pharmacies are willing to electronically adjudicate facility-pay claims at the point-of-sale, creating a ‘hard stop’ that prevents rules from being broken in the first place, many large-chain pharmacies are not. SRX technology creates an electronic record on the facility end that nets out items from the pharmacy bill at the end of the month that do not adhere to the established rules. This ‘soft reject’ puts a backstop in place that facilities can use to have informed claims reconciliation conversations with their pharmacy partners to enforce compliance with defined dispensing rules. With this backstop in place, facilities are able to recoup all eligible credits stemming from pharmacy oversights.
Amy Russell is a Board-Certified Geriatric Pharmacist and founder of Prescriptive Strategies, a niche advisory practice that helps long-term care companies maximize their pharmacy-related opportunities. She works directly with facilities to put DUR rules into action and explains how this can reduce waste, particularly for facilities with a majority of short-stay patients. “Depending on the size of the the facility, and the amount of short-stay patient turnover, establishing dispensing rules will reduce waste for almost every patient. With the high number and cost of prescriptions involved in treating patients with chronic conditions such as diabetes and COPD, and with short-stay patients admitting with orders that reflect the discharging hospitals’ formulary preferences and rebate contracts rather than the most cost-effective options, facilities can expect to save an average of $100 to $150 for every patient admitted, with the right pharmacy dispense rules and patient discharge processes in place. Many facilities don’t recognize the opportunities for waste and formulary management that come from establishing these types of dispensing rules. They often don’t know what they are missing.” She also explains why technology is critical in fully understanding the pricing of claims. “Due to daily changes in average wholesale pricing (AWP) and wholesale acquisition costs (WAC), facilities do not have ready access to the information needed to reprice claims. Without the type of automation a third-party adjudicator offers, it is nearly impossible to manually identify pricing discrepancies among the hundreds of billed claims on your pharmacy statement.”
With help from an automated DUR process, and access to pharmacy claims expertise, facilities are able to maximize their savings, and better understand how to take control of their pharmacy costs. Improved insight into pharmacy spend opportunities also allows facilities to reduce waste and feel confident that they have the tools in place to effectively manage this important cost center.
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