PHARMACY ALERT: Pharmacies Have Less Than 60 days for Disputes Over DIR Fee Reports

Frier Levitt previously reported that certain Direct and Indirect Remuneration (“DIR”) fee reports would be available soon from Pharmacy Benefit Managers (“PBMs”) and last week, a major PBM distributed its report to providers. Often, PBMs will allow pharmacies a brief period—as little as 60 days—to dispute those performance reports used to justify DIR fees, pharmacy price concessions, or other post point of sale fees.

PBMs implement DIR fee programs that do not follow clear federal statutes, regulations and guidance. PBMs are bound by law to meet the “reasonable” or “relevant” terms and conditions standard. Many DIR fee programs may violate the federal Any Willing Provider Law, including regulations codified at 42 C.F.R. §423.505(b)(18). In certain circumstances, PBMs utilize inapplicable metrics, such as “Net Promoter Score” (“NPS”), to determine a provider’s DIR fee performance. In other circumstances, some PBMs measure the pharmacy’s “Generic Dispense Rate” (“GDR”). GDR is the measure of the percent of generic drugs dispensed by a pharmacy, and the pharmacy is penalized if it does not meet that rate, which can be as high as 95%. Specialty pharmacies often dispense primarily “brand” drugs for which no generic or bioequivalent is produced, and so have no ability to meet such GDRs. The GDR metric is another example of a terms and conditions” that are clearly not “reasonable” or “relevant” to a specialty pharmacy business model, and pharmacies can successfully challenge DIR fees by way of arbitration.

Some PBMs require any dispute of DIR fees to be filed in an abbreviated time—as little as 60 days—from the time the PBM issues its report to the pharmacy. Your pharmacy must act immediately to preserve your right to dispute DIR fees.

How Frier Levitt Can Help

If your pharmacy’s DIR fees are subject to an NPS, GDR, or other performance metric that may not apply to your pharmacy, you may have only a short time to file a dispute. If you would like to file a dispute, or simply learn more about how PBMs calculate DIR fees and total reimbursement, contact Frier Levitt to speak with an attorney.

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