Pharmacists Target Hidden "DIR" Fees Impacting Medicare Beneficiaries, Pharmacies

The National Community Pharmacists Association has offered the Centers for Medicare & Medicaid Services a new proposal to increase disclosure of secretive fees levied within the Part D prescription drug program and also reiterated bipartisan calls for CMS to finalize proposed guidance to standardize the transparency into and reporting of such fees.

Press Release

ALEXANDRIA, Va. (Jan. 6, 2016) — The National Community Pharmacists Association (NCPA) has offered the Centers for Medicare & Medicaid Services (CMS) a new proposal to increase disclosure of secretive fees levied within the Part D prescription drug program and also reiterated bipartisan calls for CMS to finalize proposed guidance to standardize the transparency into and reporting of such fees.

At issue are hidden “direct and indirect remuneration” (or DIR fees) on pharmacies. They are imposed by prescription drug plan sponsors or their intermediaries, pharmacy benefit managers (PBMs).

NCPA wrote in a recent letter to CMS, “So-called ‘DIR Fees’ have become increasingly more prevalent and are confusing and misleading to NCPA member pharmacies and beneficiaries alike. The reporting structure outlined in the Proposed Guidance would ensure uniform reporting, a level playing field by and among Medicare Part D plan sponsors and transparency as to the true cost of a drug dispensed at a given network pharmacy to plan enrollees and the Medicare Part D program as a whole.”

In addition, to boost transparency, NCPA encouraged CMS to require drug plan sponsors to note on the Plan Finder website those instances in which the price of a drug is subject to change due to DIR fees reconciled after medication is dispensed. “By mandating that such a disclaimer be included on the Medicare plan finder look-up tool CMS will ensure that a Medicare Part D plan’s enrollees and potential enrollees understand the true cost of a drug to the Medicare Part D program as a whole, which is a valid consideration given that it is the total cost of a dispensing event not merely the beneficiary cost-sharing that impacts monthly premiums,” NCPA wrote.

The CMS disclosure proposal on DIR fees is an extension of steps taken the Bush Administration to enhance oversight of taxpayer funds in Medicare. It has received widespread support from NCPA and consumer advocacy organizations including Medicare Rights Center, Center for Medicare Advocacy, Justice in Aging, National Committee to Preserve Social Security and Medicare, National Council on Aging, and others.

In October 2015, 11 U.S. lawmakers sent CMS a bipartisan letter encouraging the agency to finalize the guidance. The letter, signed by U.S. Reps. Austin Scott (R-Ga.), Dave Loebsack (D-Iowa) and others, urged CMS to implement its proposed guidance on consistent reporting of pharmacy price concessions in order to give CMS better oversight of the Part D program to protect taxpayers.

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The National Community Pharmacists Association (NCPA®) represents the interests of America's community pharmacists, including the owners of more than 22,000 independent community pharmacies. Together they represent an $81.4 billion health care marketplace and employ more than 314,000 individuals on a full or part-time basis. To learn more, go www.ncpanet.org, visit facebook.com/commpharmacy, or follow NCPA on Twitter @Commpharmacy.