Patients, Government Face Increasing Healthcare Costs With DIR Fees, Rep. Collins Said

Direct and indirect remuneration (DIR) fees have been a growing concern for community pharmacists, and pharmacists who haven’t had an issue with them yet will run into them soon, said Representative Doug Collins, R-Georgia, who was the keynote speaker at the National Community Oncology Dispensing Association Spring Forum 2018, held March 1-3 in Dallas, Texas.

Collins focused his discussion on DIR fees and how they are increasing costs for the patient—by pushing them into the donut hole and catastrophic coverage in Medicare—and for the healthcare system. In addition, since Medicare patients are being pushed into catastrophic coverage, CMS has to pick up the extra costs, which means the taxpayer is spending more.

In general, DIR fees to pharmacy benefit managers (PBMs) are driving up costs, and Collins said research has found that the average community pharmacist loses $83,000 a year on DIR fees alone. The problem is that the industry is on track for a situation where PBMs begin to either kill off community pharmacies or they buy other PBMs and consolidate even further.

That said, Collins thinks PBMs can be used for good.

“I don’t hate PBMs; I hate the way they do business now,” he explained. “When they started, they actually were a good idea. They actually were designed to lower costs, to provide better interactions to get drugs.”

The problem is the use of strategies like DIR fees. The Office of the Inspector General has documented significant spending increases in Medicare Part D for catastrophic coverage and an increased number of people getting pushed into the catastrophic range.

“The increase actually coincides with—guess what?—DIR fees,” he said. “It’s almost identical. When DIR fees started going up, we started seeing the catastrophic coverage of CMS go up.”

The report found that from 2010 to 2015, the costs paid by Medicare increased from $10 billion to $33 billion in 5 years. And since 2015, those costs have gone up even more, Collins added.

Collins also touched upon the ongoing healthcare debate in Washington, DC, discussing the Affordable Care Act (ACA) and said that Congress “failed America last year” when it was unable to pass legislation repealing and replacing the ACA. Parts of the health law are things he agrees with—provisions like coverage for preexisting conditions and the ban on lifetime limits—but he believes those changes could have been made without overhauling the whole healthcare system. Unfortunately, he doesn’t see a way to move forward at this point to try to make any further changes to the ACA.

“As we move forward in this, this year, frankly, I wouldn’t expect to see a great deal,” Collins admitted. “It happens to be one of those election years.”