The Conflict that Jeopardizes our Seniors when the Nursing Home and Pharmacy are owned by the same Owners…….

• Not all nursing home operators are bad, but one bad operator is one too many!

Pharmacy in 1950

Conflict of Interest? We have already witnessed when checks and balances are not in place, especially when all entities are controlled by the same management, money and profits can override good and ethical practice, placing patients at risk.

If Clinical prescribing decisions are based on money instead of clinical therapeutics and the same bucket of money is coming from the same source, how can you be sure the patient’s health is the main concern?

Where does the employee report when there is a patient care issue, or any issue? Is anybody going to listen if they are governing themselves?

Same owners of the Pharmacy and Nursing Home is NOT new in this industry

In 1975 as well as today many nursing home owners were also the owners of the pharmacy, or had a partial ownership in the pharmacy.First note to self: was this fact explained to you when your family member was admitted to the nursing home?I will venture to say NO. There was probably no conversation about the pharmacy at all. As a consumer, there is always a concern, especially when MONEY, and the majority of money received by the nursing home is subsidized by the federal government, your tax dollars.

Kick-Backs past and present jeopardize the care delivered-

In a survey of California pharmacists in 1974, the pharmacists admitted to giving back up to 30% of what was billed to the owners of the nursing homes for medications supplied to the patients in the nursing homes.It was a known fact that if you did not agree to this “give back”, or“discounted” invoice, you would not get the business. Another common practice was nursing home owners who owned their own pharmacy would offer shares in the corporation to other nursing home owners if they would contract with their pharmacy for services.There is still no accountability or agency that can successfully police this practice, yesterday or today.

In a news article dated March 2022, “Omnicare agrees to $124M deal for alleged kickback”. Brought by two whistleblowers, a settlement agreement said Omnicare paid skilled-nursing facilities with discounted drug prices and “prompt pay discounts,” a violation of the federal anti-kickback statute.

Direct Care and Services to our residents is reduced while Owners bank accounts increase

Unfortunately, since the 94th Congress senate hearings of 1975 which published,“Nursing Home Care in the United States:Failure in Public Policy”a supporting paper №2 titled:Drugs in Nursing homes: Misuse, High Costs, and Kick-backs very few things have changed. Even then, the nursing home was acting as a middle man by first receiving payment from the federal government and diverting the money away from patient care.

Drug Misuse in Nursing Homes

Dispensing methods and processes of medications differs dramatically when it is from a LTC closed shop pharmacy versus from a retail pharmacy.

A pharmacy servicing a nursing home is not usually open to the general retail traffic.It is called a “closed shop” and is usually in a business complex. The “closed shop” nursing home pharmacy has additional state and federal regulatory agency requirements and processes to follow that are not required of the local retail pharmacy. The “closed shop” pharmacy does not bill at POS (point of sale) nor does the patient have the ability to go to another pharmacy to get their medications if the pharmacy cannot fullfill the doctor’s orders.( The patient does have a choice but the logistics and physical requirements make it difficult and impractical.)

Every industry has bad actors, and the LTC industry is no exception.It is so hard for me to believe, knowing every transaction in the operations of a pharmacy and of a nursing home ends with the patient, that some operators, owners, DO NOT CARE how their actions affect the patients.

Not every operator’s primary focus is how much money can be obtained regardless of how it impacts the patient. Not every nursing home owner and their pharmacy evades the rules and ignores their responsibility to the patients, but COVID has shown the light on the multiple players with their creative schemes to generate additional revenue at the detriment to the patient. Greed and desperation is always the driving force of this behavior.

COST VS BEST PRACTICE regarding prescription drugs can be deadly

Changing Patient’s Drug Therapy to Optimize Owner’s Revenue

Medicare A patients can have 100 days of medicare coverage for rehab services in the Rehab- Nursing home. (Have you noticed that there are facilities that are 100% sub-acute?) The facility will be paid based on services provided as an umbrella payment. This includes everything, rehab services,dietary needs,equipment, nursing time,and including all the medications prescribed. The daily cost paid by CMS (medicare) could vary from $450.00–$900.00 and higher a day.

Prescription medications are a huge expense to the facility especially when a patient admitted to the nursing home has up to twenty-six medications. Medication costs are rising and an example of a patient who has breathing issues, such as COPD, or Asthma, can have as many as three inhalers. One inhaler alone can COST the pharmacy between $200.00 to over $400.00.

The interest of some nursing home operators has been to establish a DRUG FORMULARY for Medicare A patients in order to reduce the total drug spend.Best practice for establishing a Drug Formulary must be based on Therapeutics, not on the COST as the primary criteria.In New Jersey a Formulary may be implemented only after all physicians that see patients at the facility review and sign off of the formulary interchanges. The pharmacy is then responsible for documenting that each doctor has reviewed and agreed to the formulary in order for an AUTOMATIC SUBSTITUTION to be implemented. The physician always has the ability to override the formulary but there has to be a mechanism in place at the pharmacy level for that override.The pharmacy is usually connected to the facility’s electronic health record and this substitution will automatically happen when the order is transmitted to the pharmacy.Who is monitoring this procedure?(The pharmacy could be processing prescriptions without legal prescriptions if the pharmacy does not have the documentation to support that the physician approved the AUTOMATIC SUBSTITUTION for the formulary.)

If your family member was prescribed a specific medication and you found out that the doctor changed the drug based on cost, you would be outraged, and rightly so. Another way owners reduce pharmacy costs, has been to hire a company that are “cost monitors” for the nursing homes( usually a related owned entity).Often these companies hide behind a pretense that they are “managing the formulary”.When a prescription is written that is over a certain price (established by the owners of the nursing homes), they will block it from being processed and make the facility contact the doctor to change the order to a less expensive drug. The individuals that are given the authority to block the prescription being prescribed and offering an alternative drug are not pharmacists, and are not doctors and have no medical or clinical training.

Another way nursing home owners capitalize on these relationships is to not pay the pharmacy that they own for the invoices for medications for their homes, using the pharmacy as a bank. The reliance from the other non-owned facilities being serviced by the pharmacy are then footing the bill that supports the operations. Reducing staff in nursing homes and pharmacy, regardless of how it affects operations increases profit for the owners.If the pharmacy has contracts with other nursing homes not owned by the owner of the nursing home and pharmacy it puts those facilities at risk of poor service when the pharmacy operations are forced to reduce staff and services. Maybe the end game is to bankrupt the entity, then sell to a related party and start the cycle all over again?

I have personally witnessed incompetent practices such as trying to institute bad formularies.I have had arguments with owners when I refused to implement their drug formulary that was not clinically sound.I have had to fight, hire a lawyer and produce the regulations to show that the process they were proposing was non-compliant and harmful to the patients. I refused to implement these practices. We all need to refuse to implement these practices.

Healthcare provided in nursing homes to our seniors and veterans must be a priority to all of us. A total overhaul of how we pay, who we pay for services, who is qualified to provide services, what services should be provided, and severe penalties when services are not provided. Transparency of ownership and oversight and the resources to hold the owners accountable and remove those who defraud and abuse our patients is needed ASAP (AS SOON AS POSSIBLE).We must remove the loop holes and remove the bad operators.“We the People for the People” must lead this charge.