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NACDS praises Congress’ call for DIR fee reform

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ARLINGTON, Va. — In the growing effort to achieve pro-patient and pro-pharmacy reforms of direct and indirect remuneration (DIR) fees in Medicare Part D, the National Association of Chain Drug Stores today hailed a letter to Health and Human Services Secretary Alex Azar signed by 50 members of the U.S. House of Representatives and led by U.S. Rep. Tom Marino (R, Pa.) and David Loebsack (D, Iowa).

The House members said DIR fee reforms could “lower out-of-pocket costs for beneficiaries” and “make medicine more accessible, leading to greater adherence and better health outcomes.”

NACDS president and chief executive officer Steven  Anderson said in a statement, “NACDS is committed to helping bring about a solution to unsustainable DIR fee practices. We appreciate the continued leadership of Congressmen Marino and Loebsack on this issue, and the strong engagement of the House members who signed this important letter. We are hopeful that the Centers for Medicare & Medicaid Services (CMS) will maintain the momentum that it has signaled to move toward a workable solution.”

DIR fees were originally intended to capture and report rebate amounts paid by manufacturers at the end of the plan year during the reconciliation process in Part D. In recent years, however, the fees have become a catch-all category used increasingly by plans to include various pharmacy price concessions, such as fees related to performance-based programs or fees for participation in a preferred network. As a result, pharmacies find themselves in the untenable position of being paid by plan sponsors for prescription services, only to find out later that some of the payment must be returned.

The Congressional letter states, “The unpredictable variability in the use of fees provides little visibility for the Medicare program, as well as for participating retail pharmacies, particularly for performance-based fees and the goals necessary to achieve specified targets to ‘earn back’ fee amounts.”

In April, CMS stated in the Final Part D Rule that it has the authority to take action to remedy this issue, and that no legislative action would be needed before it could begin a rulemaking process.

In their letter, the House members urged CMS to pursue the reforms that it has signaled, as well as to consider other policies “that promote a quality-driven healthcare system” that also have been urged by NACDS.


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