Point-of-Sale DIR Fees Addressed in New Medicare Part D Rule

The final rules clarifies several issues important to pharmacists and hints at further rule-making to address direct and indirect remuneration fees.

The Centers for Medicare and Medicaid Services (CMS) issued a final 2019 Medicare Part D rule on Monday addressing direct and indirect remuneration (DIR) fees.

In the rule, CMS asserted its statutory authority to require that some portion of rebates and pharmacy DIR fees be applied at point of sale, according to a National Community Pharmacy Association (NCPA) press release. However, the rule does not actually require such a change, but states that “any new requirements regarding the application of rebates at the point of sale would be proposed through notice and comment rule-making in the future.”

Many pharmacists and pharmacy associations, including NCPA, have spoken out against DIR fees. In January 2018, more than 115 health care organizations and advocacy groups signed a letter in support of pharmacy regulations that address the issue. The letter encouraged CMS to implement point-of-sale DIR fee requirements.

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According to the press release, the final rule clarifies several issues important to pharmacists.

  • Part D plan sponsors may continue to tailor their standard terms and conditions for various types of pharmacies, but may not exclude pharmacies with unique or innovative business or care delivery models from participating in their contracted pharmacy network on the basis of not fitting in a Part D plan sponsor’s pharmacy type classification.

  • Part D plan sponsors cannot limit dispensing of certain drugs (such as specialty drugs) or drugs for certain disease states to a subset of network pharmacies if a pharmacy is capable of and appropriately licensed under applicable laws and agrees to meet the sponsor’s standard terms and conditions.

  • Part D plan sponsors are required to develop standard terms and conditions and make them ready for distribution by September 15, 2018. Part D plans must provide the applicable standard terms and conditions to a requesting pharmacy within 7 business days of receipt of request.

In a recent survey conducted by the NCPA, nearly all independent pharmacy owners said DIR fees put patients in jeopardy and hindered their ability to manage the business. According to the survey, pharmacist respondents ranked DIR fees as the top concern of 2018. The NCPA said it sent the survey results as a response to the CMS’ proposed rule during the comment period.

“In this rule, CMS hints strongly that it is concerned about retroactive pharmacy DIR, that it has statutory authority to address the issue and that there may be further rule-making to deal with it in the months ahead,” B. Douglas Hoey, MBA, chief executive officer of NCPA, said in the press release. “That’s very promising. This rule simply telegraphs the next steps in the process.”

The Pharmaceutical Care Management Association (PCMA) released a statement that cautioned against mandating point of sale rebates, which it believes would ultimately increase costs.

“Two years ago, drugmakers launched a campaign to deflect blame for their high prices onto health plans and pharmacy benefit managers (PBMs) that negotiate discounts and rebates to reduce the cost of benefits,” said PCMA president and CEO Mark Merritt. “Senior administration officials did not adopt their proposal which would have raised, not lowered costs for both seniors and taxpayers by up to $82 billion. It would also have handed drugmakers a $29 billion windfall. PBMs will continue offering the option of point-of-sale rebates in the commercial market, but mandating it across the board in Medicare Part D would have been costly and unworkable.”

Meanwhile, the National Association of Specialty Pharmacy (NASP) called the rule a first step in expanding access to high-cost specialty drugs, applauding the efforts to lower co-pays for seniors and moving forward with nationally-recognized third-party accreditation standards.

However, the organization added that there is still significant work left to address the needs of stakeholders across the health care landscape.

“The administration should respond to bipartisan requests made by members of Congress to address DIR fees, which ultimately increase seniors' out-of-pocket costs on the front-end and result in significant fees on the back-end that severely limit a specialty pharmacy's ability to provide critical patient care support services—services that save Medicare expenditures by ensuring medication compliance and reducing avoidable emergency room visits and hospitalizations,” said Sheila Arquette, RPh, NASP executive director. “This issue is bigger than Medicare drug costs. It's about health system costs and reigning in costs to Medicare and taxpayers.”

Reference

NCPA: In New Part D Rule, CMS Asserts Authority to Apply DIR at Point Of Sale [news release]. NCPA’s website. http://www.ncpanet.org/newsroom/news-releases/2018/04/03/in-new-part-d-rule-cms-asserts-authority-to-apply-dir-at-point-of-sale. Accessed April 4, 2018.