Medicare Bill Mandates $30 Fee Per Prescription for Long-Term Care Pharmacies, Fully Subsidized by Taxpayers

If you or a family member rely on a long-term care facility, you know how crucial the pharmacy services are. This new legislation, the Preserving Patient Access to Long-Term Care Pharmacies Act, aims to shore up the finances of these specialized pharmacies by mandating a new payment structure starting in 2026.

The $30 Supply Fee: A Direct Infusion

Here’s the deal: The bill establishes a mandatory $30.00 supply fee that Medicare Part D plan sponsors (the companies running your prescription drug plan, or PDPs and MA organizations) must pay directly to long-term care pharmacies for every “specified prescription” dispensed. This fee is set for 2026 and will increase slightly in 2027 based on inflation. Crucially, the bill specifies that this new supply fee must be paid in addition to existing reimbursements—it can’t be used to reduce the dispensing fees or ingredient costs the pharmacy already negotiates. This provision is designed to ensure the $30 is a net gain for the pharmacy, intended to cover the higher administrative and service costs associated with long-term care.

The Subsidy Catch: Who Actually Pays?

This is where the policy gets interesting, and where the taxpayer steps in. While the Medicare plan sponsors (like your insurance company) have to pay the $30 fee up front, the bill requires the Secretary of Health and Human Services to fully reimburse them. That’s right: the government will subsidize 100% of the supply fees paid out by the sponsors. The catch? The sponsors won’t see that money back until up to 18 months after the end of the plan year. So, the long-term care pharmacy gets the cash immediately, the plan sponsor shoulders the cash flow burden for over a year, and the taxpayer ultimately funds the entire operation. It’s a mechanism designed to get money to a specific sector quickly, backed by federal funds, but it creates a significant administrative loop.

Enforcement and Administrative Headaches

To make sure plan sponsors don't drag their feet, the bill includes a serious enforcement mechanism. If a PDP sponsor or MA organization fails to pay the required supply fee for a qualifying prescription, the Secretary must impose a civil money penalty of no less than $10,000 for each failure. This high penalty indicates how serious Congress is about ensuring these payments are made, placing a heavy compliance burden on the large insurance organizations.

For the average person, this means two things: First, long-term care pharmacies—which often operate on thin margins, especially in rural areas—get a much-needed financial boost, potentially securing access to necessary medications. Second, the cost of this financial support is shifted directly to the federal budget, meaning taxpayers are footing the bill through the subsidy mechanism.

Analyzing the Sustainability Question

Beyond the immediate cash transfer, the legislation mandates a comprehensive study by the Comptroller General (GAO) within 12 months of enactment. This study will dive deep into the economic sustainability of long-term care pharmacies under the Medicare program. The GAO is tasked with analyzing everything from ingredient cost payments and dispensing fees to the actual costs these pharmacies incur to meet service criteria. The goal is to provide Congress with recommendations on creating a truly sustainable payment system, especially for Medicare beneficiaries in rural markets. This study suggests that while the $30 fee is a temporary fix for 2026 and 2027, policymakers recognize the need for a long-term solution to keep these specialized pharmacies in business.