Study finds Medicare 'DIR fee' legislation would save government billions

The results of a new study indicate that ending retroactive pharmacy payment reductions, or post point-of-sale pharmacy DIR fees, in Medicare Part D could save the government more than $3 billion over a decade.

The results of a new study indicate that ending retroactive pharmacy payment reductions, or post point-of-sale pharmacy DIR fees, in Medicare Part D could save the government more than $3 billion over a decade. The Wakely Consulting Group report, commissioned by the National Community Pharmacists Association (NCPA), examined the effects of the Improving Transparency and Accuracy in Medicare Part D Drug Spending Act (H.R. 1038/S. 413), which prohibits pharmacy payment reductions on "clean claims" in Medicare Part D. According to the report, eliminating retroactive pharmacy payment reductions and shifting them to equivalent point-of-sale price concessions instead would save the U.S. government $3.4 billion in Part D payments made to plan sponsors between 2018 and 2027. In addition, the report 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 also reduce the amount of claim dollars in the catastrophic phase of the Part D benefit, the report says. "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," said NCPA CEO B. Douglas Hoey. "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."