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What are DIR fees and how to Reduce it

Direct and indirect remuneration (DIR) fees are payments that pharmacies receive from insurance companies, pharmacy benefit managers (PBMs), and other third-party entities. These fees are intended to compensate pharmacies for various factors, such as performance, quality, and patient outcomes.

Direct remuneration fees are payments that pharmacies receive directly for the prescription drugs and services they provide to patients. These fees are typically negotiated between the pharmacy and the insurance company or PBM and are based on factors such as the cost of the medication, dispensing fees, and other factors.

Indirect remuneration fees, on the other hand, are fees that are paid to pharmacies after the fact, based on various factors such as the pharmacy's performance, the quality of care provided to patients, and other factors. These fees are often not transparent or easily understood, and can vary significantly between different insurance companies and PBMs.

The impact of DIR fees on pharmacies can be significant, as they can impact the profitability and financial stability of the pharmacy. Additionally, the lack of transparency and consistency in the way that these fees are calculated can make it difficult for pharmacies to effectively manage their operations and plan for the future.

In summary, Direct and Indirect Remuneration (DIR) fees are fees charged by Pharmacy Benefit Managers (PBMs) to pharmacies that fill Medicare Part D prescriptions. These fees can add up quickly and become a significant cost for pharmacies. Here are a few ways to reduce DIR fees:

  1. Optimize drug formularies: Work with PBMs to optimize drug formularies to promote the use of lower-cost, clinically appropriate drugs. By selecting formulary drugs that are both effective and affordable, pharmacies can help reduce overall drug costs and associated DIR fees.

  2. Improve medication adherence: Improving patient medication adherence can help reduce overall healthcare costs and decrease the frequency of prescription drug fills, which can result in lower DIR fees. Typical pharmacy can reduce DIE fees by 2 percentage points by improving adherence.

  3. Negotiate PBM contracts: Negotiating PBM contracts can help pharmacies reduce DIR fees. Consider working with a PBM consultant to review contracts and identify opportunities to reduce fees.

  4. Implement medication synchronization programs: Implementing medication synchronization programs can help reduce the number of prescriptions fills and associated DIR fees. This involves coordinating medication refills so that they all occur on the same day each month.

  5. Implementation of point-of-sale rebates: Implementing point-of-sale rebates can help reduce DIR fees by reducing the amount of retroactive fees charged to pharmacies.

  6. Improve patient outcomes: Improving patient outcomes can help reduce healthcare costs and the frequency of prescription fills, which can result in lower DIR fees. Consider implementing programs to help patients manage chronic conditions and improve overall health.

  7. Review performance metrics: Reviewing performance metrics can help pharmacies identify areas where they can improve and reduce DIR fees. This may involve reviewing metrics such as medication adherence rates, patient satisfaction scores, and prescription fill rates.

Overall, DIR fees are a complex and controversial aspect of the pharmacy industry, and their impact on pharmacies and patients is an ongoing subject of debate and discussion. RxReach custom communication program can make a big difference in adherence and refill rate to help reduce DIR fees. Speak to one of our experts.

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1 Comment

Unknown member
May 19, 2023

The PBM’S are nothing but a Huge USA Cartel * when you lose approx $1,000 each & every day before the door open you are screwed * no transparency just PAY THE MAN ! The death in indy Rx

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