SURVEY FINDS PBM MIDDLEMEN CHARGED INDEPENDENT PHARMACIES MORE THAN $2 BILLION IN MEDICARE PRESCRIPTION FEES
“DIR” Fees Meant to Lower the Cost of Prescription Drug Coverage for Seniors May Be Going to Pharmacy Benefit Managers Instead
WINSTON-SALEM, NC (February 14, 2018) -- On the day traditionally reserved for honoring matters of the heart, Pharmacists United for Truth and Transparency (PUTT) released the heartbreaking results of a survey measuring fees PBM middlemen charged independent and community pharmacies for filling prescriptions under Medicare Part D in 2017 and 2018. The fees, called direct and indirect remuneration, or DIR, are supposed to reward patients and pharmacies for achieving certain therapeutic and health-related outcomes by reducing plan plan premiums and out of pocket expenses but appear to instead have become a secondary revenue generation stream for pharmacy benefit managers (PBMs).
In a survey of nearly 600 independent pharmacies, PUTT found PBMs had charged average per-store DIR fees of $74,711 in 2017 and average per-store DIR fees of $129,614. The $54,903 difference represents a 74 percent increase in a single year. If all of the approximately 22,000 community pharmacies paid the 2018 average, PUTT estimates PBMs would have returned some $2.85 billion back to CMS and Medicare patients.
“At a time when the Health and Human Services Department is reporting a decline in Medicare Part D for 2018 and a projected decline in Part D premiums for 2019 (1) , we are deeply concerned to see the burden of DIR fees have not only NOT decreased, they have increased nearly 50 percent in one year,” said PUTT president and independent pharmacy owner Scott Newman. “The purpose and intention of claiming these fees at the pharmacy level was to encourage adherence and foster an environment in which patients and providers could partner to achieve the patient’s healthcare goals. Instead, pharmacies are
carrying the financial burden of the DIR fees, patients are being cut off from their pharmacies and PBMs are raking in billions in profit they may or may not be sharing with CMS.”
PUTT conducted the survey in response to the Centers for Medicaid and Medicare (CMS) proposed rule “Modernizing Part D and Medicare Advantage to Lower Drug Prices and Out of Pocket Expenses”. The new rule provides patients and their providers with greater transparency of information related to expense and availability of prescription medication options. Such transparency will also allow pharmacies to know upfront the amount in DIR fees they will pay per Medicare-covered prescription. However, for most independent pharmacies, DIR fees have become a costly and unsustainable expense they must shoulder if they want to help patients with Medicare fill their prescriptions. Under the DIR program, pharmacies are supposed to be able to recoup fees if their patients meet certain preset healthcare outcomes. Additionally, pharmacies are rated under the Electronic Quality Improvement Platform for Plans and Pharmacies (EQuiPP), a standardized quality measure that provides unbiased benchmarked performance data to health plans and community pharmacy organizations. The average
EQuiPP rating among pharmacies participating in PUTT’s survey was 4.6.
Pharmacists United for Truth and Transparency (PUTT) monitors PBM and other industry practices in the interest of improving the quality, safety and cost of patient care. To learn more about PUTT, visit TruthRx.org.
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The offer the chance to get the money back if you meet certain goals. You could have 100% compliance with therapeutic goals and outcomes and still not get that money back.