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Lawmakers urge CMS to act on DIR fees

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ALEXANDRIA, Va. — Nearly 50 members of Congress have called on the Centers for Medicare & Medicaid Services (CMS) to finalize its proposed guidance on how Medicare Part D sponsors report pharmacy price concessions, also known as direct and indirect remuneration (DIR) fees.

The National Community Pharmacists Association said that 16 senators and 30 representatives have written to CMS urging that more accurate information on DIR fees be provided to Part D beneficiaries, pharmacies and the federal government.

CMS’ proposed guidance would standardize the reporting by Part D sponsors of price concessions received from, and incentive payments made to, participating network pharmacies. It also would require that the DIR fees be reflected or estimated at the point of sale, which would give pharmacists an accurate picture of what their reimbursement amount will be, according to NCPA.

The Senate’s letter to CMS primarily focused on the impact that DIR fees have on pharmacies, NCPA noted. “DIR fees prevent the pharmacy from knowing the true reimbursement amount of drugs being dispensed at the point of sale, and in some cases DIR fees have resulted in preferred pharmacy prices appearing lower than they actually are,” said the letter, which was led by Sens. Shelley Moore Capito (R., W.Va.), Jon Tester (D., Mont.), Charles Grassley (R., Iowa) and Sherrod Brown (D., Ohio)

Meanwhile, the House of Representatives’ letter stated, “Current variations in the treatment of costs and price concessions affect beneficiary cost sharing, CMS payment to plans, federal reinsurance and low income cost-sharing (LIS), manufacturer coverage gap discount payments, and plan bids.”

Led by Reps. Austin Scott (R., Ga.), David Loebsack (D., Iowa), Earl “Buddy” Carter (R., Ga.) and Peter Welch (D., Vt.) the House letter also highlighted CMS’ authority to act in this area, noting that “precedent does exist for the proposed guidance as CMS has previously had to take action concerning “negotiated prices.” NCPA said that in early 2009, during the final days of the Bush administration, CMS addressed discrepancies among PBMs when it came to “lock in” versus “pass through” pricing, which caused problems in program management and integrity.

“NCPA thanks all of the lawmakers who voiced support for more transparency and accuracy in Medicare Part D by joining these letters,” NCPA chief executive officer B. Douglas Hoey said in a statement. “Inconsistent reporting of DIR fees negatively affects beneficiaries who are trying to navigate and select coverage using Medicare’s plan finder to and prevents small-business independent pharmacies from knowing their true reimbursement rate at point of sale, ultimately impacting their ability make informed business decisions for the future. Reporting these fees at the point of sale would provide greater clarity to beneficiaries, pharmacies and Medicare as to the true costs of medications.”


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