Page 17 - 2017 V1 InsideOut

CMS, Congress Throw Spotlight on DIR Fees
by Jason Money
In January, the Centers for Medicare & Medicaid Services (CMS) issued a report examining the application and impact of Medicare Part D’s Direct and Indirect Remuneration (DIR), or the post point-of- sale compensation that, in part, factors into CMS’s calculation of nal Medicare pay- ments to Part D prescription drug plans.
The report, Medicare Part D – Direct and Indirect Remuneration, indicates a sharp increase in DIR fees since the program’s inception. The trend has signi cant impli- cations for Medicare Part D enrollees:
1. DIR may hold down bene ciary premiums, but does not reduce the cost of drugs at the point-of-sale;
2. Medicare liabilities are growing, while Part D plan liabilities are shrinking;
3. Due to shrinking plan liabilities, Part D premiums have increased modestly for enrollees in comparison to gross drug costs.
In more direct terms, the CMS report found DIR fees cost Medicare, bene - ciaries and ultimately taxpayers more by obfuscating the true net cost of drugs. DIR fees lead to in ated drug costs, increase patients’ cost sharing
at time of purchase, push patients into and through the Medicare Part D “donut hole” coverage gap faster and increase Medicare spending.
In addition to increasing Medicare bene - ciary and taxpayer costs, DIR is causing adverse impacts on pharmacy providers.
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