The Impact of Medicare Part D on Nursing Homes

By Richard Shank Medicare Part D

Researchers at the Harvard Medical School recently published an extensive evaluation of how Medicare Part D has impacted the operations of long-term care pharmacies (LTCPs) and nursing homes. The research involved ananalysis of existing data, as well as stakeholder interviews with 31 nursing home and LTCP operators.

The Medicare Modernization Improvement and Prescription Drug Act of 2003 (MMA) extended voluntary prescription drug coverage to all Medicare beneficiaries, including nursing home residents. At its core, MMA relied upon private insurance plans to deliver prescriptions to beneficiaries. Part D, the specific section of the Medicare program created by MMA, is a substantial departure from previous prescription drug financing programs within the nursing home setting. The researchers of this study were interested in whether the changes imposed by Part D have been beneficial to nursing home operators and their residents, and whether MMA will have a long-term impact on the nursing home environment.

There are special provisions for nursing home residents in the Medicare Part D program because they differ from their community-dwelling peers in important ways. They are more likely to suffer from multiple chronic conditions, are predominately lower in income, have higher rates of dementia, and take nearly three times more medications. In addition, the regulatory framework that governs the pharmacy market within the nursing home setting differs from community-based pharmacy operations.

Nursing homes and LTCPs have struggled to adapt to the new program since Part D has increased the complexity of the drug management process even at the level of residential care. The inefficiencies created by the program have proven to be disruptive to clinical and pharmacy staff because the program has constructed a conflict between the need for the residence care operator to distribute medicines in a timely manner and the assurance that the drugs being prescribed will be reimbursed. Furthermore, the stakeholders interviewed in this study indicate that wide variation between the types of drugs covered under different Part D prescription drug plans have negatively impacted their ability to meet the needs of their clients.

At this point, there are many uncertainties about the long-term impact of Part D in the nursing home setting. It is clear that the program is forcing providers to change the way they deliver care and administer prescription drugs. However, whether these changes will have a positive or negative long-term impact is unclear. Care providers might, in the future, figure out ways to deal with this new complexity. What is known is that they have increased the administrative work required to deliver medications to residents, a factor that ultimately takes time and resources away from resident care.

Source: Stevenson D.G. Huskamp, H.A., and Newhouse. J.P. 2008. Medicare Part D and the Nursing Home Setting. The Gerontologist 48(4): 432-441.

Like the new format? Tell us what you think: askaia@matherlifeways.com