There are lots of hidden costs in the pharmacy industry, and if you’ve ever worked at a pharmacy, you’re probably familiar with the term Direct and Indirect Remuneration or “DIR Fees,” and how there is no way to avoid these growing fees from pharmacy benefit managers.
But what are these fees anyway? The idea of having to pay fees of any kind is unnerving, so we’ve set out to give you a better understanding of what they are and the reason for their existence, because no one likes to pay fees, especially if they don’t fully understand them.
So, What are They and Why do They Exist?
To begin with, calling a spade a spade, they are simply another bogus way for PBM’s to screw over independent pharmacies.
Technically, Direct and Indirect Remuneration or “DIR” fees are the fees that pharmacies are paying back to Medicare Part D plans/PBMs (Pharmacy Benefit Managers), originally as a way to offset member costs.
According to NCPA, plans/PBMs have used the term “DIR Fee” to describe a “true-up” between a target reimbursement rate in a participating pharmacy agreement and the aggregated effective rate actually realized by a pharmacy. It comes as no surprise that many pharmacy owners are confused by this, seeing as there is a total lack of transparency among the PBMs collecting these astronomical fees.
DIR Fees are assessed by a myriad of performance-based metrics that make little to no sense to pharmacy owners, making it difficult to predict your bottom-line claw-back amount.
A Software Solution for Independent Pharmacies
Datascan Pharmacy Software recognizes the struggles you’re facing as an independent pharmacy and has built in many features that help clients manage, assess, and fight back against these fees and avoid problems with pharmacy benefit managers.
Our DIR pharmacy estimator tool allows you to configure each plan in your system with specific low and high end percentage fees for brands and generics across 30 and 90 day supply, and even lets you enter specific fee amounts.
The estimated DIR fees appear on the claim at adjudication to better analyze each prescription and determine if you will expect a net loss on the prescription. In fact, we have a post-edit hard stop you can turn on for any RX that expects a loss after the DIR.
It color codes the script and stops the label from automatically printing, giving you the opportunity to assess the situation and make decisions.
There are also reports that pharmacies can run to collect DIR fee data and better plan for the clawbacks from the PBMs.
To help combat the star ratings metric, which supposedly causes harm to your reimbursement rates and affects DIR fees, building medication adherence is a must. We have multiple automated functions, utilities, warnings on maintenance medications with no refills, and an adherence dashboard.
All of this, coupled with multiple automatic ways to communicate with your patients and Datascan Pharmacy Software’s mobile application, greatly simplifies getting your patients their medications on time. To avoid problems with pharmacy benefit managers, all you need to do is harness and implement the technology already within the Datascan Pharmacy Software platform—and you’re already paying for it!
This, together with fighting PBMs through tough legislation and rallying together with your fellow independent pharmacies, will help guarantee the future of our industry.
Why Datascan Pharmacy Software?
Although single-handedly, no independent pharmacy can do anything to stop or reduce DIR Fees, we can prepare for them, measure them, report on them, and avoid losing money on them, thanks to Datascan Pharmacy Software’s intelligent technology designed specifically to mitigate the risk of these fees.
If you’re considering a new pharmacy software for your independent pharmacy, demand that managing, predicting, and accounting for these fees is a part of the program and comes at no additional cost to you. Thankfully, Datascan Pharmacy Software has you covered. Call us now to schedule a consultation.
Kevin Minassian is the President of Datascan Software. Under his leadership, the company rapidly expanded to provide pharmacy management software on a national level. Over the last 15+ years, he has ensured that Datascan has continuously evolved to offer innovative solutions for independent pharmacies while still offering world-class customer support. He is passionate about helping independent pharmacies to remain competitive, achieve success, and offer the very best service to their communities.
