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In the Lead: MHA’s Role in Supporting Long-Term Care Pharmacies under the IRA

May 17, 2024

The Inflation Reduction Act (IRA) has caused significant shifts in the healthcare and pharmaceutical industries, with various implications for long-term care (LTC) pharmacies. As the act aims to address inflation and make healthcare more affordable, the ripple effects on pharmacies include changes in reimbursement, drug pricing, and payment models. In this landscape, Managed Health Care Associates, Inc. (MHA) is taking proactive measures to mitigate potential negative impacts on its LTC members and position them for success.

The Impact of the IRA on Long-Term Care Pharmacies
LTC pharmacies provide specialized services to nursing homes, assisted living facilities, and other long-term care settings. The IRA’s changes in Medicare reimbursement, along with new regulations regarding drug pricing and transparency, can lead to financial pressures for these pharmacies. The risk of reduced profit margins, increased compliance costs, and shifts in prescription volume are among top concerns.

MHA, recognizing  these challenges, has taken a leadership role in addressing these impacts, focusing on a comprehensive approach to safeguard its LTC members. Below are the four key initiatives that illustrate how MHA is leading the way in supporting LTC pharmacies through these changes.

  1. Engaging Consultants for Policy, Data, and Legal Expertise
    Understanding the complex details of the IRA and how it affects LTC pharmacies requires extensive policy, data analysis, and legal frameworks. MHA has engaged leading consultancy firms to dissect the act’s provisions, providing clear guidance on compliance and identifying areas for strategic adaptation. This partnership allows MHA to offer its members support to help them navigate new regulations and leverage emerging opportunities.

  2. Creating a Subcommittee to Propose Alternative Payment Models (APMs)
    As the IRA prompts changes in reimbursement structures, exploring new payment models becomes crucial for LTC pharmacies’ sustainability. MHA has established a subcommittee comprising LTC members and MHA leadership to develop alternative payment models (APMs). This collaborative effort aims to find innovative ways to generate incremental reimbursement opportunities, ensuring LTC pharmacies remain viable and competitive. The subcommittee’s work is expected to lead to flexible models that adapt to the evolving healthcare trends.

  3. Negotiating PBM Contracts with IRA and Market Reforms in Mind
    Pharmacy Benefit Managers (PBMs) play a central role in determining reimbursement rates and drug pricing. To ensure that LTC pharmacies are not adversely affected by the IRA’s changes, MHA  has taken a proactive approach to negotiate upcoming PBM contracts with the IRA and market reforms in mind. By anticipating potential shifts in PBM practices, MHA, backed by demonstrated value of MHA’s LTC pharmacies that represent over 50 percent1 of LTC Part D claims, aims to secure favorable terms for its members, safeguarding their best interests in an evolving policy landscape.

  4. Collaborating with Industry Associations for Strategic Advocacy
    The impact of the IRA on LTC pharmacies extends beyond individual businesses; it affects the entire industry. MHA recognizes the importance of collective advocacy and is meeting with industry associations SCPC and ASCP to develop a strategic advocacy plan. This plan is designed to offer unique policy initiatives and perspectives and create a supportive environment for LTC pharmacies. By collaborating with associations, MHA seeks to ensure that LTC pharmacies have a voice in shaping the future of healthcare policy and regulations.

Building a Resilient Future for LTC Pharmacies
Emerging regulations address some of the new framework, but much is still unknown. MHA is taking a sharp focus on the facts and engaging all stakeholders to pave a successful path forward. By proactively addressing the challenges posed by the IRA, MHA is not only safeguarding its members’ interests but also paving the way for sustainable growth and innovation, helping build a resilient future for LTC pharmacies.

For more information, MHA MEMBERS can contact their Account Executive.

If you’re not yet a member, contact MHA to

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1Based on a 2023 independent third-party analysis of Medicare Part D claims
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