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Cotton, Boozman Support Ending Medicare Part D Retroactive Fees

September 16, 2016

Contact: Caroline Rabbitt (202)224-2353

Washington, D.C.-- U.S. Senators John Boozman (R-AR) and Tom Cotton (R-AR) helped introduce the Improving Transparency and Accuracy in Medicare Part D Spending Act, legislation that ends direct and indirect remuneration fees, or DIR fees, for Medicare Part D that are harming community pharmacists.

"Arkansans can benefit from lower prescription costs when community pharmacists have greater certainty of their costs. I'm proud to sponsor this legislation that addresses a gap in Medicare reimbursements and provides greater transparency for both community pharmacists and Arkansas seniors," Cotton said.

"Community pharmacists are right to be concerned about the inefficient and unpredictable DIR fees that affect their ability to provide Medicare Part D beneficiaries with the affordable, reliable services they need," Boozman said. "As a member of the medical community, I know firsthand that providers and pharmacists share the goal of delivering the best quality care and treatment to patients. Eliminating onerous DIR fees associated with Part D will help pharmacists achieve this outcome and provide them with greater stability."

The Improving Transparency and Accuracy in Medicare Part D Spending Act would end clawbacks, or DIR fees, which are fees that are assessed by Medicare drug plans or their intermediaries. These fees are especially problematic because they are often assessed long after prescriptions are filled instead of being taken out of each individual claim, which results in periodic "reconciliation notices" from Part D Plan Sponsors or Pharmacy Benefit Managers. This ensuing lag time makes it more difficult for pharmacies to determine what their actual reimbursement rate is for Part D prescriptions.

This bill would improve transparency in Medicare Part D, as both the Centers for Medicare & Medicaid Services (CMS) and the National Community Pharmacists Association (NCPA) have urged, while resulting in lower beneficiary cost-sharing for Part D enrollees. Both CMS and NCPA officials agree that most price concessions can be determined at the point of sale, so ending costly and burdensome DIR fees is a natural step toward helping community pharmacists serve Medicare Part D customers in obtaining prescription medication that is often vital to maintain their health and well-being.

The Senate legislation was introduced by U.S. Senators Shelley Moore Capito (R-WV) and Jon Tester (D-MT). The senate bill is similar to H.R. 5951, which was introduced by Rep. Morgan Griffith (R-VA) and Rep. Peter Welch (D-VT), along with Rep. Rick Crawford (R-AR) and four other members. Both bills have bipartisan support and are backed by NCPA.