Letter blocks spelling out the word "FEES"

Wooden Blocks with the text: Fees

Drug Pricing Rule: Why is the Industry Upset?

On May 16, 2019, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that addressed the Medicare Advantage and Part D programs. In a fact sheet by CMS, it states “These changes will ensure that patients have greater transparency into the cost of prescription drugs in Part D and  will also enable Medicare Advantage plans to negotiate better prices for physician-administered medicines in Part C.” However, the ruling failed to reform pharmacy direct and indirect renumeration (DIR) fees.

Why is most of the industry upset with the final ruling?

While the ruling kept the patients in mind, it failed to reform the DIR fees pharmacies incur. The National Community Pharmacists Association (NCPA) and the National Association of Chain Drug Stores (NACDS) issued a joint statement sharing their frustration.

“We are disappointed and frustrated that this final rule fails to finalize pharmacy DIR reform as proposed, to the detriment of seniors and community pharmacies. Our organizations have been joined by many pharmacists, pharmacy stakeholder groups, patient advocacy organizations, patients, and members of Congress in advocating that all pharmacy price concessions be included at the point of sale – or eliminated altogether – to provide senior patients with lower costs and pharmacies with more certainty.

In its proposed rule the administration cited the recent 45,000 percent increase in pharmacy price concessions, an increase that is unsustainable. Pharmacies are in a tenuous situation, and our organizations are exploring all options to accomplish desperately needed reforms to pharmacy DIR. It is necessary for community pharmacies and for the benefit of seniors that this reform take effect as soon as possible.” – NCPA and NACDS

The press release continues, “Pharmacy DIR fees are based on a regulatory loophole that plans have exploited to increase beneficiary drug costs. These fees are being misused by payers to claw back reimbursement to pharmacies for the prescription drugs that they provide to Medicare beneficiaries. For example, payers impose penalties for pharmacies’ alleged failure to achieve certain benchmarks – many of which are vague, undefined, inconsistent, unachievable or outside of the control of pharmacies.”

What can pharmacies do now?

When you think about all the duties that must be done for the pharmacy to run on a day to day basis, tracking DIR fees may be the most important and difficult task. So, what can you do?

Finding a revenue cycle management service and chasing claims tool may be your answer. Not only can these services and tools track DIR fees, but they can help with reporting, reconciliation and payment, and research and collection.

Learn more about our third party reconciliation service, AbsoluteAR, here.

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