New Medicare prescription drug plan poses challenges for nursing homes

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The new Medicare prescription drug benefit will require nursing homes to fundamentally, and quickly, change they way they operate and administer care to their residents, according to a new study.

The report by Avalere Health suggests that nursing home residents who are Medicare-eligible rely heavily on their nursing homes to manage their access to drugs and coordinate healthcare. They are so reliant because they tend to suffer disproportionately from physical and cognitive impairment and require multiple medication, according to Avalere, a consulting and business strategy organization.

The Medicare prescription drug plan means that the days of one payer and one pharmacy may be over in many facilities. As of Jan. 1, nursing home residents will receive their drugs from private plans, forcing providers to deal with multiple formularies with different tier designs, cost-sharing levels, prior authorization requirements and different appeals processes. Plus, nursing homes will have to make sure all of their residents can get drugs on an in-network basis from their pharmacy; if not, they may have to work with multiple pharmacies, a major departure from the current business model, the report states.

The new Medicare drug plan will require nursing homes to make profound shifts in their administrative and operational protocols, the report emphasizes. Providers must develop systems to quickly assess residents' drug coverage needs, identify which residents require drugs that are not on their formulary and develop individualized transition plans for each resident, say study authors. 

The study's report, "The Medicare Drug Benefit's Impact on Drug Delivery in Nursing Facilities," was released Friday by the California HealthCare Foundation and can be accessed at or