Contributed by Miriam Cho, PharmD, President/CPO, MAC Rx/MedScript
January 1, 2026, marked one of the most significant regulatory and operational shifts the long-term care (LTC) pharmacy industry has experienced in decades. While the Inflation Reduction Act (IRA) was designed to reduce
prescription drug costs for Medicare beneficiaries through provisions such as Medicare drug price negotiations and Maximum Fair Price (MFP) implementation, the practical execution of those changes created substantial uncertainty for pharmacies responsible for caring for some of the nation’s most vulnerable patients.
For long-term care pharmacies, the challenge was never about supporting affordability for
patients. We share that goal. The challenge was understanding how the regulations would be operationalized, how reimbursement would be calculated, how manufacturers would administer refunds, and how pharmacies could continue providing uninterrupted care while navigating an entirely new financial and administrative framework.
At MAC Rx and throughout the LTC pharmacy community, January 2026 became a real-time exercise in adapting to evolving guidance, building new operational processes, and maintaining financial stability while continuing to deliver medications to thousands of nursing home residents every day.
The Reimbursement Challenge
Historically, long-term care pharmacies have operated on thin margins, fronting the acquisition cost of medications while receiving reimbursement weeks or months later. The IRA introduced an additional layer of complexity through Medicare drug price negotiations and MFP-related reimbursement processes. As negotiated prices became effective for select medications beginning in 2026, pharmacies suddenly found themselves balancing drug acquisition costs, evolving reimbursement methodologies, and manufacturer refund processes that were still being refined.
Unlike retail pharmacies, LTC providers operate in a highly specialized environment. Medications are dispensed through cycle fills, emergency medication supplies, short-cycle dispensing programs, and facility-specific workflows. Any disruption in reimbursement timing can have a significant impact on cash flow, inventory management, and service delivery.
Internal leadership discussions throughout 2025 highlighted concerns around reimbursement predictability, cash-flow pressure, and execution risk as the industry prepared for implementation. Many organizations advocated that the IRA altered pricing, reimbursement timing, and operational risk across purchasing, finance, compliance, and pharmacy operations and had great success spreading awareness.
As a result, long-term care pharmacies were forced to reconsider purchasing strategies, contract structures, and inventory management processes months before the law’s effective date. One of the greatest operational challenges created by the IRA was the need for unprecedented levels of revenue and reimbursement tracking.
Prior to 2026, most pharmacies could reasonably predict reimbursement based on plan contracts and historical payment patterns. The introduction of negotiated drug pricing created unclear and new reconciliation requirements that demanded detailed tracking of claims, refunds, reimbursements, and manufacturer payments.
Finance teams, purchasing departments, compliance leaders, and pharmacy operators suddenly needed visibility into:
- Claims affected by MFP pricing
- Manufacturer refund eligibility
- Reimbursement timing differences
- Outstanding refund balances
- Revenue recognition and reconciliation timing
- Cash-flow impact across facilities and health plans.
The industry’s focus shifted from simply processing claims to actively monitoring and reconciling every stage of the reimbursement lifecycle in conjunction with extended pay terms.
Organizations that invested early in analytics, reporting infrastructure, and operational coordination were better positioned to manage the uncertainty. At MAC Rx, leaders worked across purchasing, finance, compliance, and operations to establish processes designed to track IRA-related exposure, optimize refill timing, and maximize available manufacturer rebates while maintaining compliance with evolving guidance. Proactive planning, including coordinated purchasing and refill strategies prior to January 1, helped mitigate early reimbursement delays and cash-flow disruptions.
These efforts reflected a broader industry realization: success under the IRA would require not only clinical excellence but also sophisticated financial management and data visibility.
Good-Faith Inquiries and Regulatory Interpretation
Perhaps the most challenging aspect of the IRA rollout was that many operational questions did not have immediate answers.
Pharmacies, manufacturers, software vendors, managed care organizations, and regulators were simultaneously working to interpret requirements and develop practical workflows. Inevitably, discrepancies occurred between expected reimbursement outcomes and actual payment results.
To address this, the law and associated implementation processes provided mechanisms for pharmacies to submit Good-Faith Inquiries when reimbursement discrepancies or MFP-related questions arose. These inquiries became an essential component of the industry’s adaptation strategy. Rather than assuming payment errors or unresolved claims were permanent, pharmacies were encouraged to engage manufacturers and technology partners through structured review processes designed to investigate and resolve issues fairly and transparently. This, however, continued to pose challenges due to inadequate guidance, delayed responses from government bodies and lack of communication.
The process required collaboration, patience, and ongoing efforts to enhance communication
among all stakeholders. It also reinforced an important principle: regulatory compliance is not a one-time event but an ongoing partnership between providers, payers, manufacturers, and government agencies.
The Critical Role of SoftWriters, MHA, and National Advocacy Partners
Technology played a central role in helping LTC pharmacies successfully navigate the implementation of the IRA.
SoftWriters, a long-standing technology leader within the long-term care pharmacy industry, and Managed Health Care worked closely with pharmacies to address system enhancements, workflow changes, reporting needs, and operational challenges associated with the new regulations. Through continuous communication and collaboration, pharmacies were able to modify processes, improve claim visibility, and develop practical solutions to emerging reimbursement challenges. Softwriters’ dedication to rapid changes to support pharmacy needs was integral in the planning, execution, and success of our pharmacies.
Senior Care Pharmacy Coalition (SCPC) and ASCP, the largest consulting pharmacy group in the country, were vital in advocating for awareness and action related to this regulation, specifically, the impact on LTC pharmacies in the regulatory space to ensure that we had support and understanding around changes that needed to be made while emphasizing the long-term impact.
The implementation effort required significant coordination among software providers, third-party administrators, pharmacy operators, and reimbursement specialists. New reporting tools, enhanced reconciliation capabilities, and workflow modifications became necessary to ensure pharmacies could effectively identify affected claims and monitor financial performance.
The success of these efforts demonstrated the value of having technology and industry partners who understand the unique dynamics of long-term care pharmacy operations and can rapidly respond to regulatory change. Without that partnership, LTCs would not have been able to be as successful as we were and recognize that effort.
Looking Forward
The implementation of the Inflation Reduction Act in January 2026 represented far more than a regulatory change — it marked a transformation in how long-term care pharmacies monitor revenue, manage reimbursement risk, and engage with manufacturers and health plans.
While challenges remain, the industry demonstrated remarkable resilience. Through proactive planning, detailed revenue tracking, Good-Faith Inquiry processes, collaboration with national LTC organizations such as SCPC and ASCP, and strong support from technology partners such as SoftWriters, long-term care pharmacies successfully adapted to one of the most complex reimbursement changes in recent history.
Most importantly, throughout the uncertainty, LTC pharmacies continued to fulfill their core mission: ensuring that nursing home residents and medically fragile patients received the medications they needed without interruption.
The lessons learned during 2026 will continue to shape the future of our industry. As reimbursement models evolve and additional IRA provisions take effect, long-term care pharmacies will remain focused on balancing compliance, financial sustainability, and exceptional patient care. That commitment — more than any regulation — will continue to define our success.
