What is Long-Term Care (LTC) Pharmacy in 2022?

Thirty years ago, pharmacies were just realizing the opportunities available to them in the long-term care space.  At that time, long-term care pharmacy and pharmacists were servicing residents living in nursing homes (SNF) and that was the end of the story.  In 2022, the healthcare spectrum has changed.  Everyone is looking for a way to decrease healthcare costs and provide better care.  Adverse drug reactions account for many hospital admissions – according to a recent meta-analysis, one in ten hospital admissions are for elderly patients.1 This makes pharmacists—more specifically, long-term care pharmacists— part of the solution for both costs and care; especially as the definition of appropriate long-term patients and services continue to be defined. Long-term care pharmacies can be a closed-door pharmacy servicing only long-term care residents or a long-term care pharmacy can be in a “combo” pharmacy where both retail and long-term care pharmacy are being offered under a retail license.


As you know, long-term care pharmacies provide services above and beyond what is delivered at the counter of a typical retail pharmacy for a walk-in patient.  The Centers for Medicare and Medicaid Services (CMS) has specific requirements for pharmacies servicing Medicare Part D beneficiaries in long term care facilities2.  LTC pharmacies must have the capacity to provide specific drugs in units of use packaging, bingo cards, cassettes, unit dose or other special packaging commonly required by LTC facilities.  They must also have services available twenty-four hours, seven days a week for emergency calls. These are but a couple of the services needed to take care of patients in a long-term care setting. Many pharmacies have added other services such as medication reconciliation, medication management, medication regimen reviews (MRRs), etc., in addition to the ones specified by CMS.


While the requirements for Medicare Part D and long-term care facilities are specific to licensed nursing homes and Intermediate Care Facilities for Individuals with Intellectual disabilities (ICF-IID), CMS calls out that services provided by pharmacies for beneficiaries in non-LTC facilities (e.g. assisted living facilities and other forms of congregate residential settings) with the same level of care need as residents of LTC facilities should be reimbursed differently in the dispensing fee paid to them for a Medicare Part D beneficiary.3 


So, the bottom line in taking care of patients needing long-term care services is not where they reside, but what their medical needs require to have cost-effective and safe medication services provided.  Do these patients need special packaging, delivery, emergency services for medication orders, assistance with taking their medications, etc.? 


Nursing home residents/Skilled Nursing facility – Of course, nursing home residents qualify for long-term care pharmacy services.  CMS has regulations regarding pharmacy services along with pharmacy consulting.  These were recently updated when the majority of nursing home regulations were changed in 2016. Medications dispensed in these facilities must adhere to short cycle fill (must dispense in quantities of 14 days or less) for all brand oral solid medications.



Intermediate Care Facilities for individuals with intellectual disability (ICF-IID, formerly called ICF-MR) – These are federally licensed facilities taking care of patients with intellectual disabilities.  They must follow the same requirements for pharmacy and consulting services.  These facilities are exempt for the short cycle fill requirement for brand oral solids.


Assisted Living/Personal Care/Adult Care – Federal law does not regulate assisted living facilities, residential care facilities, personal care, or adult care facilities.  There are many acronyms for these types of facilities.  If you have questions about the types of facilities that are included in the assisted living definition for your state, go to www.ncal.org to review the state regulation summary and links to individual states.


Group Homes – Group homes primarily service residents with developmental disabilities.  The care in these facilities can range from foster care to full-time care based on the medical needs of the residents.  Many times, group homes are classified as assisted living by state regulations (see www.ncal.org for information on the definition of assisted living in each state).  If the resident requires assistance with medication administration, medication management, emergency services, then they qualify for long-term care pharmacy services.


Chronic Psychiatric care facilities/short-term drug or alcohol rehabilitation facilities/Others – If residents of a facility are being cared for by healthcare professionals and are receiving medication services as described above, they qualify for long-term care pharmacy services.


Correctional facilities/Jails and Prisons – The inmates in a prison facility also qualify for long-term care services.  They are unable to obtain their medications from a local retail pharmacy.  Most pharmacies servicing a correctional facility have a contract for services and the government or facility is billed directly for the medication and services.


Hospice – Patients requiring hospice services are usually in need of assistance with medication administration and other services provided by a long-term care pharmacy.  Dispensed medications related to the resident’s terminal illness (pain/anxiety/nausea/laxatives) are billed directly to the hospice provider.  The remaining medications can be billed to the resident’s primary insurance – Medicare Part D, Medicaid, commercial, etc.


Medical at Home – Over the past several years, CMS has created Medicaid waiver programs for residents at home that normally would be placed in a nursing home, and because of the waiver, are allowed to stay in their own home for care (1915c or 1115 waivers).  In addition, many Managed Medicaid programs are looking for methods to decrease healthcare costs, especially with hospitalization of chronically ill beneficiaries.  Once again, if a long-term care pharmacy can provide LTC pharmacy services (i.e., special packaging, delivery, emergency fills, medication management, etc.) for these patients, these beneficiaries qualify for long-term care services.  While this a new and growing part of the long-term care pharmacy business (the fastest-growing LTC patient segment), getting payers to recognize the services provided and paying for them appropriately takes time.  On December 15, 2021, CMS published a memo regarding paying for institutional medication services at home if they are needed.5 While this does not contractually obligate Medicare Part D payers to reimburse pharmacies for these services, it is a step in the right direction to obtain the needed payment to allow for these services to be paid commensurately.


The patients serviced by a long-term care pharmacy today are totally different than what was seen thirty years ago.  The opportunity to impact the care and cost of healthcare is here today, as is the opportunity for a pharmacy to expand its revenue streams by offering these specialized services to qualified patients within their serviced communities. Expanding or starting a long-term care pharmacy business as a closed-door or within a retail pharmacy can offer a way to be part of the continuum of care and impact patients with invaluable services independent pharmacy and pharmacists have to offer.


LEARN MORE | QUESTIONS – Should you have any questions or wish to learn more about any of the content herein as it relates to your pharmacy business and our partnership with AAP, you can contact your AAP representative, the author of this whitepaper—Susan Rhodus, R.Ph., at srhodus@gerimedgso.com | 800.456.4374, etx.4119, or our long-term care (retail ‘combo’ and closed-door) team of experts at info@gerimedgso.com | 800.456.4374.




1 Eur J Clin Pharmacol. 2017 Jun;73(6):759-770. doi: 10.1007/s00228-017-2225-3. Epub 2017 Mar 1
2 Prescription Drug Benefit Manual, Chapter 5: Benefits and Beneficiary Protections, 50.5.2, Rev 14, 9/30/11
3 Prescription Drug Benefit Manual, Chapter 5: Benefits and Beneficiary Protections, 20.7, Rev 14, 9/30/11
4 Federal Register / Vol. 81, No. 192 / Tuesday, October 4, 2016 / Rules and Regulations
5 https://www.cms.gov/httpseditcmsgovresearch-statistics-data-and-systemscomputer-data-and-systemshpmshpms-memos-archive/hpms-memos-wk-3-december-13-17 (accessed 5/11/22 – memo regarding “Part D Dispensing Fees and Enrollees with Institutionalized Level of Care Needs” published 12/15/21)