Report cites abuse of Medicare Part D loophole, driving up untenable costs for patients and pharmacies

XIL Consulting, one of the leading pharmacy analysts in the nation and a key advisor to the top players in the industry, has issued findings that opportunistic payers and Pharmacy Benefit Managers are piling on "obscure" pharmacy fees totaling $8.5 billion since 2013.

From the perspective of XIL Consulting, seniors do not benefit from these fees and continue to struggle to pay out-of-pocket prescription costs as evidenced by frequently buying drugs from foreign countries such as Canada. Consequently, 53% of seriously ill Medicare beneficiaries are experiencing financial hardships in paying for their healthcare needs.

Direct & Indirect Remuneration pharmacy (DIR) fees are applied after the point-of-sale by health plans and PBMs for participation in Medicare Part D pharmacy networks, but analysis shows those fees have "skyrocketed by 1,600% in the last five years." A loophole in the Medicare anti-kickback law allows health plans and PBMs to charge pharmacies fees to fill Medicare prescriptions.

"That's an unsustainable level by any measure," said Susan Lang, CEO of XIL Consulting. "Oversight and change is necessary to ensure that savings written into the law are passed on to seniors instead of shuffled over to PBMs that drive small critically needed pharmacies out of business. Yet, the larger problem is that an increasing portion of these fees are being retained by health plans and PBMs. In turn, that's putting additional pressure on the household budgets of seniors, while pushing many independent pharmacies right out of business."

According to the report, from June of 2018 to July of 2019, more than 2,200 pharmacies shuttered their doors; many of which point the finger directly at DIR fees as the main reason.

Lang suggested the current situation has been particularly damaging to providers in rural communities throughout the country where just over half are now considered "pharmacy deserts."

"In 2017 alone, PBMs drained approximately $4 billion out of the system—a fact that should give lawmakers strong reason to redirect their attention to curbing these exorbitant abuses," Lang suggested. "If not, the situation looks pretty dire—a recent National Community Pharmacists Association (NCPA) survey found 58% of local pharmacists are uncertain about their chances of making it the next two years."

"Change is possible—as long we hold all parties accountable."

To learn more about XIL Consulting, visit http://www.xilconsulting.com.



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