Advocacy Groups Join Together Against DIR Fees


Health care organizations show support for proposed Medicare Part D rules that require direct and indirect remuneration fees to be included at the point-of-sale.

More than 115 health care organizations and advocacy groups recently signed a letter in support of pharmacy regulations that address direct and indirect remuneration (DIR) fees in a proposed Medicare Part D rule by the Centers for Medicare and Medicaid Services (CMS), according to a press release from the National Community Pharmacists Association (NCPA).

The organizations wrote the letter to specifically support the requirement that DIR fees be included in the negotiated price that is available during the point-of-sale, according to the letter.

"NCPA has been relentless in urging CMS to take this action on retroactive DIR fees, and this proposed rule reflects our input. Charged retroactively, DIR fees unnecessarily add costs for patients while creating financial uncertainty for pharmacies,” said NCPA CEO Douglas Hoey, RPh, MBA. “We were pleased the agency announced it is considering a requirement for those price concessions to occur at the point of sale for Medicare beneficiaries. We urge CMS to move forward toward that goal.”

Check out our past coverage of DIR Fees.

Many pharmacists and pharmacy associations have spoken out against DIR fees, saying that the price concessions lack transparency and have caused many pharmacies to shut their doors, in addition to harming patients.

“When it’s not done in real time, we often don’t know for months or almost a year that we are unprofitable on a particular transaction,” Steve Giroux, former NCPA president and independent pharmacist previously told Specialty Pharmacy Times in an interview. “The unfairness of that mechanism has gotten the attention of CMS, and I think we are on the verge of eliminating them entirely. Certainty, gaining a lot more transparency.”

In the proposed rule, CMS said that plan sponsors and pharmacy benefit managers (PBMs) have been retroactively recouping money from pharmacies. Factoring in these fees during the pharmacy transaction would improve transparency, increase predictability for pharmacies, and lead to patient savings, according to CMS.

DIR fees are often charged weeks to months after a transaction and are typically costly, which can mislead pharmacies about their reimbursement.

“Furthermore, the sheer magnitude of these fees, which can often amount in the tens of thousands of dollars annually, often forces pharmacies to make tough decisions to reduce employee hours, or in some cases, lay off employees,” the letter stated. “Such actions have a negative, ripple effect on beneficiary access and care.”

The groups also said that if price concessions are accounted for at the point-of-sale, PBMs and payers would still be able to use quality-based metrics to reward pharmacies. These payments would be reported as negative DIR, according to the letter.

CMS previously indicated that Medicare beneficiaries would save $10.4 billion and slow progression to the coverage gap. The agency also cited several studies that found DIR fees can increase cost-sharing and block access to prescription drugs, which, in turn, diminishes adherence and worsens outcomes.

Due to cost savings and increased transparency from these provisions, the 115 organizations—including the National Association of Specialty Pharmacy—supports the proposed rule and encourages CMS to implement point-of-sale DIR fee requirements, according to the letter.

"Via this letter, more than 115 health care stakeholders make a case for why the proposed rule is good policy and urge CMS not to waver on it,” Hoey said. “The current system, which allows pharmacy benefit managers to claw back an undetermined amount of money from pharmacies weeks or months after the transaction, is unfair to patients and unsustainable for small-business pharmacy owners."

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