Pharmacies in Iowa, and across the U.S., are being forced out of business essentially because of a technicality, an unfair loophole in Medicare regulations, by which health insurers and middle-men are taking back a portion of payments to pharmacies well after Medicare Part D prescriptions are filled. This loophole is called direct and indirect remuneration, or DIR. In other words, they are hidden fees, which is what makes them so damaging to businesses and, ultimately, patients.
Imagine trying to run a business with the unpredictability of having the money you have already been paid snatched back from you all because of an unclear detail in regulations you can’t control. Government policies and regulations are often confusing because they are complicated, but when they affect your everyday livelihood they become, unfortunately, a lot easier to understand. One-in-five pharmacies have already closed in Iowa over the past eight years. That is alarming. Added to that staggering statistic, the Centers for Medicare and Medicaid Services says that the use of DIR fees has increased 45,000% between 2010 and 2017. This is what pharmacies are facing every day. DIR fees have tripled just since last year. These hidden fees hurt businesses, but they are not the only ones affected. It is also damaging to seniors enrolled in Medicare who now don’t have access to pharmacies because they are closing. The last thing senior citizens need is an obstacle to accessing their medications, especially seniors who live in rural areas where pharmacies are closing at an even higher rate. These hidden DIR fees also increase senior citizens’ prescription drug costs. When senior citizens can’t afford to pay for their prescription medications, that reduces their adherence to the drugs, which leads to poorer health outcomes.
Many pharmacists work in the communities where they were raised, and they know that these hidden DIR fees are fraying the fabric of their communities’ healthcare infrastructure. The compassion and care of local pharmacists can truly help patients live longer and happier lives. Most pharmacists enter the profession because of a genuine desire to be involved in their communities and help people. When pharmacies close, access to these trusted professionals is diminished or, worse, blocked altogether.
This is more than frustrating — it is wrong, and it needs to be fixed. Senators Chuck Grassley and Joni Ernst understand the impact this loophole is creating and have been at the forefront of this issue. Recently, Senator Grassley and 23 bi-partisan members of the Senate Finance committee sent a letter to the Department of Health and Human Services (HHS) Secretary Alex Azar and Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma requesting they use regulatory authority to reform. However, if the administration will not act then action is needed through federal legislation to ensure more pharmacies aren’t forced to stop providing essential care to Iowa’s seniors.