NCPA Executive Update

NCPA Executive Update delivers insights on legislative, regulatory, policy, and industry developments from NCPA CEO B. Douglas Hoey, Pharmacist, MBA, to NCPA members and pharmacy leaders every other Friday.

A Future Without DIRs and MACs | NCPA Executive Update | February 12, 2016

by NCPA | Feb 12, 2016

February 12, 2016

A Future Without DIRs and MACs

Dear Colleague,

Doug Hoey

I am at the NCPA Multiple Locations Conference today with over 200 pharmacy owners and participants. There's lots of buzz on two topics—positioning their pharmacy so it is part of health care networks being paid for producing patient value and what to do about some of the problems of today. Not surprisingly, DIR clawback fees and slow and low MACs head the problems list.

Since Jan. 1, Medicare Part D plans and/or their PBMs have been required to:

  • Provide network pharmacies access to MAC prices in advance.

  • Update MAC prices at least every seven days and include the source being used to provide updates.

  • Ensure MAC prices reflect "market price."

How's that working so far?

Not so well according to the NCPA members who heeded our call and have been sending numerous examples of the underwater MAC reimbursements they are seeing every day. Our respondents also report no consistency among plans and PBMs on how and where to access price updates, making it difficult to judge their accuracy.

Earlier this week, NCPA staff met at our request with officials of the Centers for Medicare & Medicaid Services to discuss how the new mandates are—or are not—being followed. We raised a number of concerns, especially about MACs not reflecting market prices and the problems pharmacies and PSAOs are having with the updates. Examples of underwater MACs should still be entered into the template form NCPA created and sent to Michael Rule at

We also reiterated our request for CMS to issue a final guidance on direct and indirect remuneration (DIR) fees that are making it virtually impossible for pharmacists and patients to know the true cost of a drug at dispensing. NCPA's campaign asking the Centers for Medicare & Medicaid Services to take action on DIR fees has gained additional momentum thanks to Rep. David Young (R-Iowa). The freshman lawmaker recently urged CMS to "promptly implement" its proposed guidance to increase transparency into DIRs. We will continue to press for relief on the DIR issue.

Back to the Multiple Locations Conference, today's presentation is focused on value. Every provider is being scrutinized for what value they produce for the health care system. PBMs are middlemen that add costs. Their business model doesn't work in a value based health care system. Conversely, pharmacies have to adjust their business models to take advantage of the value they provide to their communities.

David Pope from Creative Pharmacist gave this example:

Hospitals are at risk for being penalized when patients with certain conditions like CHF and COPD are readmitted to the hospital. A key point that you may not have known is that the financial penalty to the hospital is not just on the patient that was readmitted. The penalty is not just on all the patients with the same diagnosis. The penalty is on ALL Medicare payments to that hospital. CMS expects those penalties to equal $420 million this year. That's real money hospitals don't want to lose!

About 20 percent of the pharmacists at the meeting have talked with their local hospital about their pharmacy offering transitions of care services to their local hospital and many more are planning to talk with their hospitals this year.

Community pharmacies and hospitals working together is one glimpse of the future. No PBMs need apply. In the meantime while that future is developing, work on the problems of the present continues full steam ahead.


Doug Hoey