Long-Term Care Pharmacy Supply Fee

Summary#

This bill would require Medicare Part D plans and Medicare Advantage drug plans to pay a temporary per-prescription “long-term care pharmacy supply fee” when certain drugs are dispensed by long-term care (LTC) pharmacies to certain beneficiaries. The fee is $30 per qualifying prescription in 2026 and rises in 2027 by an annual percentage increase referenced in existing law. The federal government (the HHS Secretary) would then repay plan sponsors the aggregate amount of those fees after the plan year. The bill also orders a government study on the financial sustainability of LTC pharmacies.

• Main change: Plans and MA-PD organizations must pay LTC pharmacies a supply fee for qualifying Part D prescriptions in plan years 2026 and 2027; the federal government will provide a subsidy to reimburse plans for the fees they paid.
• Who is covered: The rule applies only when prescriptions are dispensed by a long-term care pharmacy and when the prescription meets the bill’s definition of a “specified prescription” (tied to a “maximum fair price” situation).
• Enforcement: Plans that fail to pay the fee face civil money penalties of at least $10,000 per failure.
• Study: The Comptroller General (GAO) must report within 12 months on payments to LTC pharmacies, pharmacy costs, recent payment changes, and recommend steps to create a sustainable payment system and protect beneficiary access, especially in rural areas.

What it means for you#

• Long-term care pharmacies

  • Will receive an extra supply fee for each qualifying prescription: $30 in 2026 and a higher amount in 2027 based on a referenced annual increase.
  • The fee must be paid in addition to any other negotiated payments and cannot be used to reduce other reimbursements.

• Medicare Part D plan sponsors and MA-PD organizations

  • Must pay the supply fee to LTC pharmacies when the bill’s conditions are met.
  • Will be reimbursed by the federal government for the total fees they paid for a plan year, but reimbursement may arrive up to 18 months after the plan year ends (so plans must front the fees initially).
  • Face a civil money penalty of at least $10,000 for each failure to pay the required fee.

• Medicare beneficiaries in long-term care

  • May benefit indirectly if the fee helps keep LTC pharmacies operating and available where they live.
  • The bill applies only to prescriptions dispensed at the “maximum fair price” to certain eligible individuals; it does not change beneficiary cost-sharing in the text provided.

• Taxpayers / Medicare program

  • The federal government will pay subsidies to plans to cover the supply fees. The bill does not include a public cost estimate in the text provided.

Expenses#

No publicly available information on a fiscal estimate or total cost is included in the bill text or the materials provided.

• The Secretary must reimburse plans and MA organizations for the total supply fees those entities paid during each plan year (2026 and 2027).
• Reimbursements must be made not later than 18 months after the end of the plan year, which may create a timing gap between when plans pay fees and when they receive federal repayment.
• Civil money penalties (at least $10,000 per failure) could raise enforcement-related costs for plans and the agency administering penalties.
• No dollar estimate of total program cost, savings, or impact on the Medicare trust funds is provided in the bill text.

Proponents' View#

The bill appears intended to address access problems for beneficiaries who rely on long-term care pharmacies. Possible arguments in favor, based on the bill text:

• It could help keep LTC pharmacies financially viable when they must fill prescriptions at a “maximum fair price,” by providing an additional per-prescription payment.
• Requiring payment “in addition to” other reimbursements may protect existing negotiated payments to LTC pharmacies.
• By directing the GAO to study long-term care pharmacy economics and recommend a sustainable payment system, the bill aims to produce evidence-based longer-term solutions.
• The bill targets continuity of access, especially in markets such as rural areas where pharmacy options can be limited.

Opponents' View#

The bill’s design raises several possible concerns based on its text and mechanics:

• The federal government reimburses plans for these fees, but repayment can arrive up to 18 months later. This timing may create cash-flow or administrative burdens for plan sponsors who must front the payments.
• The bill applies only to prescriptions dispensed at a “maximum fair price” to certain eligible individuals. The exact scope and number of qualifying prescriptions is not defined in the bill itself but is tied to other statutory sections, which makes the practical reach unclear.
• No fiscal estimate or budgetary detail is included in the bill text provided, so the total cost to Medicare or federal spending is unknown.
• Enforcement is a civil penalty of at least $10,000 per failure; the text ties enforcement procedures to existing law but does not detail how disputes or compliance reviews would be handled in practice.
• Because the change is temporary (two plan years), it may offer only short-term relief without guaranteeing a long-term solution unless the GAO study leads to further action.