The folks in Washington cook up all sorts of regulations for Medicare Part D prescriptions. These put new financial burdens on those responsible for dispensing these prescriptions, namely pharmacies.
DIR Fee Carve Outs
Let’s start with direct and indirect remuneration (DIR). This regulation makes it difficult for pharmacies to know what their reimbursement will be until well after the fact. This is about to change with providing this in real time at the point of dispensing when real-time reporting kicks in in 2025. I am intrigued by the DIR label.
What does indirect remuneration mean? And what’s the difference between this and direct remuneration? Who is doing the remuneration? I know the answer to that question. Pharmacies, of course, are the ones doing the remunerating, with the carve-out on their reimbursement. Pharmacy associations have been doing battle with CMS (Centers for Medicare & Medicaid Services) over this regulation since its introduction. But DIR still exists and it’s causing pharmacies to close.
Part D Maximum Fair Prices
Now we have Part D maximum fair prices and price smoothing that pharmacies will have to deal with. These may be beneficial to Part D beneficiaries, but the same cannot be said for pharmacies. Maximum fair prices will have another impact on reimbursement. This was covered in the last issue of ComputerTalk.
Price smoothing will have an impact on cash flow. You can read more about this in the Viewpoints column in this issue. If CMS isn’t careful, a lot of Part D beneficiaries will be left out in the cold as their pharmacies shut their doors, particularly in rural areas where pharmacy locations are sparse to begin with.
Pharmacy Revenue: What Are The New Sources
All that said, pharmacies need to find other revenue sources to be less dependent on prescriptions for survival. This is one of the reasons there has been so much emphasis of late on promoting pharmacies as providers of clinical services that can be reimbursed. Our cover story in this issue touches on what pharmacies are doing to improve medication outcomes. This is where a pharmacy’s vaccine program can be beneficial. It has an outcomes metric as well.
My position is that CMS must cease coming up with requirements that penalize pharmacies. I am not sure how much discretion CMS has, but if a legislative change is necessary, then CMS should push for this. It’s that simple. CT