Although the areas we represent are hundreds of miles apart, they share many features: sweeping mountain vistas, winding country roads, and wide stretches between healthcare facilities and providers. In both of our districts, independent community pharmacists often fill critical gaps in patient care – especially for our senior citizens.
But lately, these small business healthcare professionals are struggling to keep their doors open because of after-the-fact payment clawbacks from pharmaceutical middlemen known as pharmacy benefit managers (PBMs). PBMs are taking back a portion of the pharmacies’ already barely adequate reimbursements weeks and even months after the pharmacist has dispensed the medication and the patient has left the pharmacy. PBMs call these retroactive levies “direct and indirect remuneration,” or DIR, fees.
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 healthcare.
In addition, these retroactive pharmacy 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 percent of their prescription drug costs until they reach the catastrophic coverage phase. That is the phase where the government and taxpayers assume nearly all of the costs for drugs – and pharmacy DIR fees are driving up that share, too.
We reintroduced the Improving Transparency and Accuracy in Medicare Part D Drug Spending Act. This legislation, H.R. 1038, was previously introduced in the 114th Congress. It would prohibit Medicare Part D PBMs and plan sponsors from retroactively reducing payments on accurate reimbursement claims submitted by pharmacies. Doing so would help ensure community pharmacies are able to continue to serve Medicare beneficiaries and combat the growing financial uncertainties these small businesses are facing.
Community pharmacies are important to our small cities and towns in southwest Virginia, Vermont, and elsewhere, and must remain open and accessible to Medicare patients. The uncertainty in Medicare Part D drug pricing has posed many challenges for these small operations, but our bill will help stabilize the prices community pharmacies pay for prescriptions and allow more patients to access the medications they need.
Seniors are being forced to pay more for prescription drugs than ever before. This is a major problem, and we must hold everyone accountable. No one should raise prices and grow profits at the expense of seniors and the medical providers and pharmacies that serve rural families.
In 2008, Congress required that pharmacies be paid promptly, within 14 days, for accurate Medicare Part D reimbursement claims. They did so to ensure pharmacies could meet their financial obligations and continue to serve Medicare beneficiaries. Our bill would prohibit the retroactive imposition of DIRs and other such fees for those claims, which are accurate. This would allow pharmacists to continue to serve Medicare beneficiaries and others in their communities who rely on them and provide needed financial certainty for these vital small businesses.
In addition to understanding what this bipartisan legislation does, it’s also important to recognize what it will not do. First, it will not increase Medicare Part D costs. The bill simply prompts plans to account for pharmacies’ effective reimbursement rates, including any DIR fees, up front.
Second, the bill will not hamper PBMs’ ability to implement “pay-for-performance” programs for pharmacies. PBMs will be pushed to implement programs that are better aligned with Medicare’s value-based programs, instead of the “penalty-for-performance” dynamic that currently exists.
Our bill (H.R. 1038) has attracted more than two dozen cosponsors. Identical legislation (S. 413) was introduced in the Senate by Sens. Shelley Moore CapitoShelley Wellons Moore CapitoBiden's soft touch with Manchin, Sinema frustrates Democrats The Hill's Morning Report - Presented by Facebook - After high drama, Senate lifts debt limit Here are the 11 GOP senators who helped advance the debt extension MORE (D-W.Va.) and Jon TesterJonathan (Jon) TesterProgressives see budget deal getting close after Biden meeting On The Money — It all comes down to Bernie and Joe Overnight Energy & Environment — Presented by the American Petroleum Institute — Manchin, Tester voice opposition to carbon tax MORE (D-Mont.).
This is common sense, pro-small business and pro-Medicare legislation. We urge our colleagues to act on it promptly.
Griffith represents Virginia’s 9th District and Welch represents Vermont at large. Both are members of the Energy and Commerce Committee.
The views expressed by this author are their own and are not the views of The Hill.