New DIR Proposal Supported by Chains, Pharmacy Organizations

Medicare Part D direct and indirect (DIR) fee reform is gaining momentum in Congress this year, as more than 115 organizations and a bipartisan group of 80 U.S. Representatives endorsed a proposal changing how the fees are charged.

The new provision, part of the Centers for Medicare and Medicaid Services’ 2019 proposed Medicare Part D rule, would apply pharmacy DIR fees at the point-of-sale rather than after the fact.

“The Center for Medicare and Medicaid Services would provide these pharmacies with fairness and transparency by effectively ending retroactive Direct and Indirect Remuneration (DIR) fees,” said Rep. Morgan Griffith (R-VA). “This reform will help community pharmacists continue their important work serving patients.”

Related article: Pharmacists Pushing for DIR Relief

In addition, more than 115 pharmacy retailers, health care organizations, and others signed a letter to CMS supporting the point-of-sale change. Albertsons, Price Chopper, Sav-Mor Drugs, and Bartell Drugs, along with other drug stores, numerous state pharmacy associations, drug distrubutors like McKesson, several major hospitals, and national associations such as NCPA and ASHP, signed 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. 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,” said NCPA CEO B. Douglas Hoey, RPh, MBA, in a statement.

While NACDS agrees with requiring the inclusion of all potential pharmacy price concessions in the point-of-sale negotiated price, the organization is asking CMS to clarify “whether it would expect the negotiated price, including all pharmacy price concessions, to be used for determining pharmacy reimbursement for prescription drugs at point of sale, or if CMS would expect such a negotiated price to be used solely for determining beneficiary payment at the point-of-sale,” NACDS wrote in comments submitted to Health and Human Services.

Related article: The Drug Topics 2017 Pharmacist Salary Survey

“While we support the inclusion of all potential pharmacy price concessions in the negotiated price, under this scenario we would urge CMS to consider that the negotiated price be used solely for determining beneficiary payment at the point of sale and not for determining pharmacy reimbursement at point-of-sale. We also believe performance-based payments should not be incorporated into the negotiated price,” NACDS wrote.

"In addition, we ask CMS to clarify that the negotiated price would still be determined on a contractual basis and not be the same negotiated price among all pharmacies within a network,” the organization added.

The National Association of Specialty Pharmacy also urged CMS to “consider pharmacy reimbursement in totality when moving pharmacy price concessions to the calculation of negotiated price,” the organization said in comments to HHS.

The agency should also tweak the definitions of mail order and retail pharmacies, NASP said, as well as “codify and enforce that unreasonably low reimbursement rates, when offered in an initial network contract, occurring as a result of mid-year rate changes and/or after rebates/concessions are factored in to the final reimbursement rate subverts the convenient access standards.”