With Rural Pharmacies Anticipating Strains from New Regulation, Finance Committee Adopts Key Grassley Provision to Strengthen Oversight of CMS and Hold PBMs Accountable
Today’s amendment follows a CMS memo acknowledging pharmacies’ concerns about looming cash flow challenges and endorsing solutions Grassley has been pushing for months.
The Senate Finance Committee today adopted Sen. Chuck Grassley’s (R-Iowa) amendment requiring the Department of Health and Human Services (HHS) to report to Congress on the impacts of a rule pertaining to Part D reimbursements and direct and indirect remuneration (DIR) clawbacks, slated to take effect January 1, 2024. Grassley’s amendment aims to hold the Centers for Medicare and Medicaid Services (CMS) accountable for overseeing the regulation’s implementation, which includes ensuring there are actionable plans in place to preserve patients’ access to local pharmacies – particularly those in rural areas.
Grassley has long advocated for ending DIR clawbacks – fees derived from prescription drug prices that pharmacy benefit managers (PBMs) retroactively recoup from pharmacies. The practice poses significant uncertainty for pharmacies, which are forced to pay these fees to PBMs well after medication transactions are completed. It also forces seniors to pay more than they need to for their prescriptions. CMS’ new rule will eliminate some DIR clawback fees and improve the accuracy of post point-of-sale reimbursements under Part D. However, because the reimbursement changes are scheduled to hit at the same time as calendar year 2023 DIR clawbacks, rural pharmacies are bracing for steep financial strains.
For months, Grassley has urged CMS to address these cash flow challenges by encouraging interim payment plans between PBMs and pharmacies, among other actions. The agency on Monday issued a public memo to Part D sponsors and their PBMs, acknowledging pharmacies’ concerns and backing the adoption of some solutions Grassley has proposed.
Grassley’s amendment to the Better Mental Health Care, Lower-Cost Drug and Extenders Act is the latest notch in his efforts to keep rural pharmacies open moving into next year. An overview of the senator’s previous pushes follows.
- October 26, 2023: Grassley and Iowa pharmacists call on CMS to uphold its commitments to rural pharmacies amid upcoming regulatory changes.
- October 12, 2023: At Grassley’s request, CMS meets with the Iowa Pharmacy Association.
- September 28, 2023: Following a September 22, 2023 phone conversation with CMS Administrator Brooks-LaSure, Grassley urges the agency to coordinate with PBMs on payment plans for rural pharmacies that are facing financial burdens connected to upcoming regulatory changes.
- July 26, 2023: At a Senate Finance Committee hearing, Grassley amplifies concerns about the challenges the regulatory changes will pose for rural pharmacies.
- July 25, 2023: In a letter to CMS, Grassley seeks information on the agency’s oversight strategy ahead of its rulemaking going into effect.
Today’s Finance Committee markup additionally included a Grassley priority to extend Medicare’s Geographic Practice Cost Index floor, which supports physicians in rural states like Iowa. The senator renewed his calls for CMS to use the latest data for the index, ensuring the agency closely accounts for the ever-shifting costs of physician labor in rural areas. Watch his full remarks HERE.
