Pharmacy costs have always been a major expense for long term care facilities, even before recent changes to Medicare Part D drug reimbursements. Is it time for your nursing home to change its pharmacy provider? The experts weigh in.
Which is more overwhelming right now: the rising cost of prescriptions at your long-term care facility, or the thought of changing pharmacy providers?
The recent changes creating your headache started in a good place - reducing prescription drug costs for seniors. However, in reality, it shifted more of the burden to the pharmacies at the long-term care facilities where many live. But there may be a solution for nursing home administrators and directors of nursing at LTC facilities - the experts at LTCRFP explain.
Pharmacy expenditures represent one of the highest costs outside of labor for long-term care operators. In past years, prescription drug costs accounted for roughly 20 percent of all healthcare costs, according to Grane Rx. And spending for prescription drugs historically rises faster than any other healthcare expense, largely driven by purchases of specialized medications.
Many prescription costs jumped significantly as the Inflation Reduction Act took effect beginning in January 2026. This legislation cut reimbursement rates for Medicare Part D for many brand-name drugs, with losses topping 27 percent on many claims. As a result, it's more important than ever to make strategic pharmacy partnerships.
Changing pharmacy providers isn't exactly scandalous. Facilities typically negotiate new pharmacy contracts every one to three years. However, the reductions in Medicare Part D reimbursements are forcing many to reconsider sooner than normal. Making a change allows your long term care facility to gain more control over its drug costs, as well as adapt to changing levels of patient acuity and other trends in your area.
But this isn't a decision where you simply flip a switch. Changing pharmacy providers is a lengthy process that requires analysis, assessment, and formal Requests For Proposals. It can be overwhelming, and has to be worth the resource expenditure.
If you're not sure where to begin, LTCRFP, which provides specialized services guiding LTC facility leaders through the Request-For-Proposal process, recommends the following:
Assess your current pharmacy arrangements and identify areas you'd like to see improvement.
Review your existing contracts, pricing structures, and services to reveal potential hidden fees.
Put your compliance concerns down on paper to uncover gaps you've failed to capture previously.
Develop an RFP that clearly defines your facility requirements, and publish it on a procurement platform, or send it to a curated list of pharmacy benefit managers.
Changing pharmacy providers isn't easy, but neither is hemorrhaging money. Dispensing costs have topped $15 per prescription, creating dangerous gaps in nursing home budgets. If you think you can't afford the time, just wait until you see the bills. It's past time to get your RFP together. Click on the link in the description for more information. LTCRFP City: Vestal Address: 117 Rano Blvd Website: https://ltcrfp.com Email: assist@ltcrfp.com