Final answer:
The legislation allows nursing homes to have their medicine formularies and to practice therapeutic substitution for similar pharmacological efficacy, which is overseen by a committee of healthcare providers.
Step-by-step explanation:
The Institutional Formularies and Therapeutic Substitution in Nursing Homes legislation permits nursing homes to have institution-specific formularies. These formularies are essentially lists of approved medications that can be used within the institution. The legislation also allows for therapeutic substitution, which is the practice of replacing a patient's prescription with an alternative medication that has a similar pharmacological effect. This substitution is generally done for reasons such as cost savings, increased efficacy, or improved patient compliance. In nursing homes, a committee typically comprising physicians, pharmacists, and other healthcare providers oversees the creation and management of these formularies and approves any therapeutic substitutions.