New Legislation Aims to Prohibit DIR Fees

February 22, 2017

Bills have been introduced in both the Senate and House that are aimed at stopping direct and indirect remuneration fees, assuming they are passed.

Retail pharmacists are optimistic that Medicare direct and indirect remuneration (DIR) fees could end, if new bills proposed in the U.S. Senate and House are passed.

In mid-February, Senators Shelley Moore Capito (R-WV) and Jon Tester (D-MT) introduced legislation, Senate Bill 413, which would prohibit pharmacy DIR fees from being applied after the point-of-sale for prescription drugs dispensed to Medicare beneficiaries.

“This legislation would address a top concern for independent community pharmacy owners: huge monetary clawbacks assessed by Medicare drug plans, or their intermediaries-pharmacy benefit manager (PBM) corporations-long after prescriptions are filled and the pharmacy paid,” said B. Douglas Hoey, RPh, MBA, CEO of NCPA.

In the House, Representatives Morgan Griffith (R-VA) and Peter Welch (D-VA) introduced a companion bill: H.R. 1038, the “Improving Transparency and Accuracy in Medicare Part D Drug Spending Act.”

Both bills would prohibit the imposition of such fees after pharmacies fill prescriptions and are reimbursed in Medicare Part D. Hoey said that NCPA would “work aggressively” to pass both bills.

Not only are the retroactive pharmacy DIR fees burdensome to pharmacies, they are unfair for Medicare patients, according to Hoey. “These fees distort the accuracy of drug cost information on Medicare Plan Finder-the only publicly available resource accessible to Part D beneficiaries who rely on this information to make critical decisions about their health care.”

“In addition, these DIR fees increase beneficiary out-of-pocket costs for needed medications and in doing so push them more quickly into the ‘donut hole’-the point at which they are responsible for 100% of prescription drug costs until they reach catastrophic coverage,” Hoey said. “In other words, Part D beneficiaries who need and use their drug plan are punished the most by the fees.”

However, the Pharmaceutical Care Management Association (PCMA) opposes the legislation. While the "House bill might increase drug store profits, it would raise premiums for beneficiaries and increase costs for taxpayers," the organization said in a statement. "Medicare Part D is overwhelmingly popular, with a 90% satisfaction rate among enrollees. A recent report by the Centers for Medicare and Medicaid Services highlights how DIR reduces premiums for beneficiaries, which also leads to lower costs for the federal government.”