NCPA-commissioned study: DIR fees could cost CMS $3.4B in next 10 years

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NCPA-commissioned study: DIR fees could cost CMS $3.4B in next 10 years

By David Salazar - 09/28/2017

ALEXANDRIA, Va. — Retroactive pharmacy payment reductions, a portion of direct and indirect remuneration fees, could cost the federal government $3.4 billion between 2018 and 2027. That’s according to a new study from Wakely Consulting Firm that the National Community Pharmacists Association commissioned and whose results it shared Thursday.


“This new Wakely study is vitally important in showing that DIR legislation will actually save taxpayers $3.4 billion over 10 years without subtracting any benefits seniors currently receive,” NCPA CEO Doug Hoey said. “For pharmacies, banning these after-the-fact fees is the fair way to achieve predictability in the reimbursement for the medications they buy and dispense.”


The report evaluates the impact of the Improving Improving Transparency and Accuracy in Medicare Part D Drug Spending Act, which has been introduced in both the Senate and House of Representatives and prohibits retroactive pharmacy payment reductions as claims without any defect, impropriety or fraud in Medicare Part D.


If the legislation were enacted, it would save the Centers for Medicare and Medicaid service from spending that $3.4 billion over the coming 10 years. The report also notes that CMS would spend less on federal reinsurance and low-income cost-sharing subsidies. Under the legislation, the decrease in total drug cost at point of sale would lower the number of claim dollars in the catastrophic phase of the Part D benefit, the report said. The legislation is part of NCPA’s efforts to end DIR Fees, which make up a small amount of overall DIR within Medicare Part D, the majority of which is made up of manufacturer rebates, and Hoey said the results underscore the need for a legislative answer to the issue.


“This new Wakely study is robust in its scope and thoroughness and points clearly to significant cost savings to the federal government if H.R. 1038/S.413 were passed into law,” said Hoey.  “We urge Congress to move quickly to schedule hearings and advance this important legislation.”