Group Claims Seniors in Long-Term Care Could Lose Access to Essential Pharmacy Services Without Congressional Action
Millions of seniors in long-term care facilities rely on specialized pharmacy services to maintain their health and quality of life. However, a new study from the Senior Care Pharmacy Coalition (SCPC) reveals that the current Medicare reimbursement model threatens the sustainability of these essential services. Without urgent reform, seniors could face reduced access to vital medications and support.
The report, conducted by CLA (CliftonLarsonAllen LLP) with input from ATI Advisory, highlights the dire financial strain Medicare drug price negotiations are placing on long-term care (LTC) pharmacies. The findings are being used to suggest the need for Congress to address systemic flaws in the LTC pharmacy payment model and protect the services relied upon by over two million seniors across the United States.
Essential Services at Risk
Unlike retail pharmacies, LTC pharmacies provide specialized care geared to the needs of seniors in nursing homes, assisted living facilities, and other long-term care settings. These services include:
- Enhanced medication management
- Patient-specific packaging
- Consultant pharmacist oversight
- Rigorous quality controls
- Around-the-clock delivery
These additional requirements come at a cost. According to the report, LTC pharmacies face an average dispensing cost of $14.98 per prescription—more than double the average cost for retail pharmacies.
Despite these higher costs, current Medicare reimbursement rates often fall significantly short, forcing LTC pharmacies to dispense medications at a loss.
Alan Rosenbloom, President and CEO of the SCPC, warned of the consequences.
Roughly two million seniors in long-term care depend on the essential and unique services provided by LTC pharmacies—services that are simply not otherwise available. If Congress fails to act, we risk losing these critical services.
The Impact of Medicare Drug Price Negotiations
The financial pressure on LTC pharmacies is set to intensify with the implementation of Medicare's drug price negotiations under the Inflation Reduction Act (IRA). Starting in January 2026, negotiated prices for select medications, including insulin and inhalers, will take effect. These medications are among the most commonly prescribed for LTC residents.
A study by ATI Advisory estimates that applying negotiated prices to LTC pharmacy prescriptions dispensed in Q4 2023 would result in an average 27.5% loss to pharmacy operating margins. Such losses could force smaller LTC pharmacies—many of which already operate on thin margins—to close, leaving seniors without access to essential care.
Chad Kunze, Principal at CLA, emphasized the need for alignment between reimbursement rates and regulatory requirements.
As reimbursement and regulations evolve, there's a need to mitigate unintended impacts. Without adjustments, the financial strain on LTC pharmacies will jeopardize their ability to serve vulnerable populations.
Advocating for Reform
In response to these challenges, SCPC has launched the Save Senior Rx Care campaign, urging Congress to:
- Pass meaningful PBM (Pharmacy Benefit Manager) reform.
- Adopt a special LTC pharmacy service fee for medications subject to Medicare price negotiations.
The campaign emphasizes that savings from negotiated drug prices should benefit patients—not health plans or PBMs. Current practices allow PBMs and Medicare Part D plans to reap significant profits at the expense of pharmacies and patients. They claim that reforming these practices is essential to preserving access to high-quality care for long-term care residents.
Broader Implications for Long-Term Care
The challenges facing LTC pharmacies are part of a larger crisis in long-term care funding and access. While Medicare and Medicaid provide essential support, these programs are limited in scope:
- Medicare covers short-term skilled care but does not pay for custodial care, which includes assistance with activities of daily living such as bathing, dressing, and eating.
- Medicaid serves as a safety net for those with limited financial resources but often requires individuals to spend down their savings to qualify.
Private Long-Term Care Insurance is one of the few solutions that can provide comprehensive coverage for in-home care, assisted living, and nursing home services. However, many Americans remain unprepared for the financial and emotional costs of aging either because they assume their health insurance or Medicare will pay for it or because they think their family can become caregivers.
SCPC claims the findings should serve as a wake-up call for lawmakers. Without action, the viability of LTC pharmacies—and the care they provide—will remain under threat. Congress has several avenues to address this issue, including:
- PBM Reform: Establishing guardrails to prevent PBMs from exploiting reimbursement models and ensure savings benefit patients.
- LTC Pharmacy-Specific Fees: Implementing service fees to offset the additional costs of dispensing medications in long-term care settings.
- Regulatory Adjustments: Aligning Medicare reimbursement rates with the actual costs incurred by LTC pharmacies.
Alan Rosenbloom stressed the urgency of these reforms.
The first round of Medicare negotiated drug prices will have an existential impact on many LTC pharmacies. Congress must act swiftly to protect these critical services and the seniors who depend on them.
The Human Cost of Inaction
The stakes extend beyond the financial health of LTC pharmacies. Understaffed or underfunded facilities could result in medication errors, delayed treatments, and reduced oversight for residents—issues that can have life-threatening consequences.
Sherry Culp, long-term care ombudsman for Kentucky's Cabinet for Health and Family Services, shared a harrowing example of the impact of understaffing.
I recently received a report of a nursing home resident found in a state of rapid decline, surrounded by untouched food trays and soiled clothing. This kind of neglect underscores the critical importance of adequate staffing and resources.
Proactive Planning for Long-Term Care
Most observers say there is little chance of a federal long-term care plan to pay for care services, either at home or in a long-term care facility outside the 100 days of Medicare and Medicaid for those with limited financial resources.
Most states participate in the Long-Term Care Insurance Partnership Program, which provides additional dollar-for-dollar asset protection if someone has a qualified LTC Insurance policy in place.
There are also federal and state tax incentives available. LTC Insurance has become a big part of retirement planning as it is usually purchased between the ages of 47-67.
There are many online resources for long-term care to help someone plan for future long-term care needs. While LTC Insurance will not pay for medications, it will pay for the rising cost of extended care. An LTC Insurance specialist will provide accurate quotes from all the top-rated insurance companies that offer long-term care solutions.