“Congratulations, you made a $5 dollar profit on this prescription. Oh wait… I’m going to have to take $4 of that back for various fees. Congratulations, you made a $1 dollar profit on this prescription.”
This is an example of how DIR fees affect your reimbursements and ultimately your pharmacy’s bottom line, only on a much smaller scale.
When PBMs take these fees out, it’s often months after the initial prescription was processed and reimbursed, leaving pharmacy owners confused on how much they’re actually profiting on prescriptions.
DIR Fee Basics
DIR fees began as a way for the PBM to pass rebate savings to Medicare, which seems innocent enough. Now, it has become a swear word in the mouth of independent pharmacy owners all over the U.S. As these fees grew and began to cut into pharmacy profits, the individual components that make up a DIR fee became more important.
DIR fees, or direct and indirect remuneration fees, now encompass many other fees and costs, including:
- PBM participation fees
- MAC (maximum allowable cost) adjustments
- Reimbursement fees
It’s an umbrella phrase that allows you to be charged for many different things with little explanation. Many community pharmacists feel that these fees are a way for PBMs to chip away at their already dwindling reimbursements.
To help you make the best of the current situation and work toward a better future, we’ve come up with some ways you can fight DIR fees.
Start a Medication Synchronization Program
According to this webinar, many DIR fees are charged on a percentage basis. The higher your pharmacy’s performance rating, based on the 5-star system used to measure Medicare D plans, the smaller the percentage of your reimbursement that is taken as part of the DIR fee.
Adherence ratings in the following three areas all affect your pharmacy’s performance rating.
- Oral diabetes medications
- Cholesterol medications
- Hypertension medications
With industry adherence ratings of 50 percent on average you have to take action to improve your patients’ adherence in order to improve your performance rating.
A medication synchronization program can help you do that. Your pharmacy software should be capable of helping you get a sync program off the ground or ramp up your current program with reports that target possible sync patients. It should also supply tools to monitor improvement as well as a built-in method for working synchronized prescriptions into your workflow.
At the very least they should offer you a convenient way to integrate your patient information with third-party companies that have special sync programs, like Omnicell.
Complete CMR and MTM Cases
Two other aspects that affect a pharmacy’s performance rating are medication safety and CMRs, both of which can be accomplished through completing MTM cases.
If your patient is in need of a CMR it will show in your pharmacy software and should allow you to simply click a button to sign into Mirixa or Outcomes to complete the evaluation. You may notice some patients have MTM cases that are not full CMRs. Completing these could also boost your performance ratings, decreasing your DIR fees and making your more likely to be a part of Medicare D plan preferred networks.
There are forums and social media feeds littered with pharmacy industry professionals talking about DIR fees. Seriously, you should get on Twitter and search “#DIRfees.” There’s a lot of great information there. While venting your frustrations in this medium helps to raise awareness, it does little to really fight the problem.
Instead, you can take these frustrations to those who have the power to make a change. You can contact your local legislators to encourage to educate themselves on the problems this is causing pharmacies like yours. According to this article, DIR fees affect far more than just the pharmacy. Educate your patients and community members on the effects of DIR fees in their lives and encourage them to also contact their representatives.
Another avenue is to vent your frustrations at the source. Medicare has a convenient complaint form, allowing you to voice the injustice done to you, your business, and patients.
Most industry experts say that DIR fees are not going anywhere anytime soon. Even so, community pharmacy cannot just roll over and die. Where would your patients be if this was the approach we took?
To survive, maybe even thrive, in the current industry environment, pharmacies have to accept this performance-based model. After all, the clinical requirements of this model make community pharmacy an even more integral and indispensable element in the healthcare system.
Still, as you adapt, voice your frustrations to those who can affect change. Make every entity accountable for the actions in which your bottom line reaps the repercussions. Because without community pharmacy, the healthcare industry would be in real trouble.