DIR fees from PBMs increased by 91,500% in just 9 years [Weekly Roundup]
News and notes from around the interweb:
- New Prescription Drug and Health Care Spending Reporting Requirements from a Carrier and Plan Service Provider Perspective. Data required to be included in the reports falls into two categories: (1) information that cannot be aggregated and must be provided for each plan or insurance coverage, and (2) information that can be aggregated across plans or insurance coverage in the same state and market segment. Reports will need to list out the information falling under category (1) separately for each plan or coverage before providing the information falling under category (2).
- DIR charges from PBM increased by 91,500% in just 9 years. The probe by the Centers for Medicare and Medicaid Services (CMS) will center on huge increases in direct and indirect remuneration fees that PBMs charge pharmacies on Medicare prescriptions. These DIR fees were implemented as a way to incentivize U.S. pharmacies collecting millions of Medicare dollars to do more than simply push pills. But the assessment — charged well after a prescription drug sale is supposedly complete — evolved into a system that today offers pharmacies only penalties through higher and higher fees, even if every PBM performance standard is achieved. The fees now total $11.2 billion a year, up from $200 million in 2013.
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Documents reveal the secrecy of America’s drug pricing matrix. Several people who work in the industry, who asked not to be named due to the confidential nature of coalitions, said most employers, regardless of how big they are, have no idea what they’re giving up when they enter coalitions. Once employers are locked into the coalition, they can’t get a full second opinion on the drug prices they pay, experts said.
- The Consolidated Appropriations Act Introduces Broker Compensation Transparency. Effective December 27, 2021, brokers and consultants of ERISA covered group health plans, regardless of size, will be required to execute a written contract with a responsible plan fiduciary which includes a description of the services to be provided, a description of all direct compensation the broker expects to receive, and a description of all expected indirect compensation including vendor incentive payments.
- ERISA Preemption of State Laws Requiring Employers to Report or Disclose Benefit Plan Information to Employees. One reaction to the Rutledge decision was a sense that the scope of ERISA preemption was perhaps narrower than once thought and a state’s ability to indirectly regulate ERISA plans perhaps broader than once thought. This article will address whether that is an accurate assumption by applying the Court’s holdings in Rutledge and two if its other key ERISA preemption cases to determine whether the recently enacted Illinois Consumer Coverage Disclosure Act (Public Act 102-0630) may be preempted.