Long-term Care Facilities: Distribution and Reimbursement Systems

Abstract

There are several types of drug distribution systems available for use in long-term care facilities. They include floor stock, traditional, unit-dose, and modified unit-dose systems. There are advantages and disadvantages to each system, all of which can have an impact on pharmacy, nursing, and long-term care facility residents. Other services that can be provided by pharmacies include emergency services and drug supplies; controlled drug handling, accounting and disposition procedures; automatic stop order policies; and computer and formulary services. In order to continue providing services to a long-term care facility, a pharmacy must be adequately reimbursed. The most important part of a reimbursement system is developing a pricing method. The amount that a pharmacy is reimbursed should include the drug acquisition cost, cost of dispensing, and a net profit. Drug acquisition cost can include average wholesale price, actual acquisition cost, or a hybrid of these amounts, an estimated acquisition cost. The total costs involved in operating the prescription department should be computed in order to arrive at a cost of dispensing. Net profit should be an equitable amount that will allow the pharmacy to remain financially solvent. Types of reimbursement systems include private payment, where the individual resident reimburses the pharmacy, and third party payment, where agencies such as Medicaid, private insurance companies, and, in the near future, Medicare, reimburse the pharmacy.

A major component of nursing home pharmacy services is the drug distribution system. There are various types of distribution systems, which differ in many ways. A key factor in the provision of pharmacy services to nursing homes is reimbursement. This article will discuss the different types of drug distribution systems available, as well as the various methods of reimbursement for pharmaceutical products and services.