Due to a loophole in Medicare regulations, direct and indirect remuneration (DIR) fees have been affecting profitability for pharmacies since 2010. Originally, DIR fees were only applied as a penalty for underperforming payers and pharmacies on claims processed through Medicare Part D. Now, DIR fees can be assessed for any plans/payers, so pharmacies feel their impact even more. Plus, performance metrics for pharmacies are often inconsistent and outside of their control. While there may be little you can do about the fee amount itself, there are things you can do to protect your pharmacy. Here are three ways to mitigate the impact of DIR fees:
In 2008, the Center for Medicare & Medicaid Services (CMS) implemented a Five-Star Rating system to evaluate health plans for service quality, patient care, and adherence. While pharmacies aren't rated directly, their performance affects the star rating for payors they work with. This is why PBMs use the star ratings to help determine how much pharmacies should pay back, and ultimately how much they profit.
While some of the factors tied to star ratings are not within your control, there are ways you can boost your pharmacy’s performance. One of the best ways is to focus on patient adherence. Pharmacies with a high adherence rate are more likely to be added to health plan networks and earn discounted DIR fees.
Tracking and reconciling claims is an essential part of managing your DIR fees. However, if you're trying to do it manually, it can be time-consuming. Instead, you can streamline your entire claims presses using electronic remittance files that are sent directly to your pharmacy software. That way, you can easily monitor claims from submission all the way through payment reconciliation. Not only will you save time, but you can check for errors and determine the anticipated reimbursement rate before the claim is submitted. You can also run reports of your paid claims, to identify shifts in reimbursement by payer, or for a particular medication.
While prescriptions account for most of your business, DIR fees only apply to dispensing, not other services you offer. That's why offering additional services and products can help mitigate the effects of DIR fees on your pharmacy's bottom line. Plus, it helps you build stronger relationships with your customers as well.
While DIR fees have been around for years, i’s important to proactively work on ways to mitigate the impact DIR fees have to your bottom line.
To learn how BestRx can help your pharmacy navigate the legislative changes ahead, request a free demo today. Together, we can help to ensure your pharmacy is operating as efficiently and profitability as possible.