The Medicare Drug Benefit: Impact on Nursing Facilities

Avalere Health

This is archived content; for historical reference only.

This 2005 issue brief examines the short- and long-term impact of the Medicare drug benefit on the 1,300 nursing facilities and their 105,000 residents in California. It also offers recommendations for managing and monitoring the transition to the new coverage plans.

The authors find that facilities will need to fundamentally and quickly change the way they operate and administer care. Among the greatest challenges will be moving from a system where Medi-Cal is the dominant payer to a more complicated system involving multiple payers for prescription drugs.

For beneficiaries, the Medicare drug benefit is both new and complex, requiring not only that they compare plan benefits, formularies, and cost-sharing responsibilities, but that they reconcile these options with spending to choose the best plan. Considering the limited access that nursing facility residents have to traditional medical resources like physicians and pharmacists, nursing facility staff will need to play a leading role in helping residents select an adequate and affordable drug plan.

In response to numerous potential challenges, the brief offers recommendations for federal and state officials and facility administrators, including the need for comprehensive training for staff and individual support for patients. Additionally, transition plans and individual monitoring by all parties will be necessary to ensure that facilities fulfill their administrative responsibilities and that patients get the decision-making assistance and medications they need.