DIR fees and how specialty pharmacies can respond
By: Ron Lanton, President, True North Political Solutions
Although direct and indirect remuneration (DIR) fees aren’t new, their application has been increasingly vague since they were introduced as a way to track the impact of rebates and price adjustments on Medicare Part D drugs. Unfortunately, the fees’ original intent has been obscured because DIR has become a catch-all for various fees charged by pharmacy benefit managers (PBM).
However, you have the ability to determine what charges can correctly be considered DIR fees. In addition, when incorrect DIR fees are levied, there are tools you can use to fight unjust charges.
Originally, DIR fees served a valid purpose—to address price concessions that ultimately impacted Medicare Part D drug costs but weren’t captured at the point of sale. Rebate savings must be passed from the PBM to the payer. Sometimes, pharmacists receive clawbacks from PBMs that masquerade as DIR fees. These fees, which are charged after the medication has already been dispensed, negatively impact pharmacies’ operating margins. You simply can’t plan for fees incurred after claim adjudication, and that raises uncertainties as you try to establish revenue projections and work within operating margins.
Counteract the unknowns with tools that help you plan for potential DIR fees prior to the point of sale. These are McKesson’s myHealthMart mobile app , which includes DIR estimator functionality, and AmeriSourceBergen’s DIR Fee Estimator tool, which is available to members of AmerisourceBergen’s pharmacy services administrative organization.
While flat dollar fees are standard in retail pharmacy, DIR fees are generally assessed as percentages in the specialty setting. Because of the high prices of specialty medications, PBMs may charge thousands of dollars for a single claim rather than the flat fee, which often ranges from $5 to $15.
Rather than accept these exorbitant fees, some pharmacies have chosen to take steps to fight back. Here are some steps I recommend:
- Review contract terms, PBM performance metrics, and medication therapy management information to determine if the fees assessed are consistent with the standard operating agreement.
- Collect and aggregate historical data to create a compelling argument for your CMS regional offices. By showing a holistic picture of your organization’s lost revenue over time, you can show the harm DIR fees have caused your business. The goal isn’t to complain about monetary loss but to advocate for regulation that allows you to accurately anticipate future fee amounts.
- Diversify your services to include more options that do not incur DIR fees, so, with fewer unknowns, you can more easily plan your business’ financial future.
The collection and maintenance of accurate data records will give you the most leverage as you push for increased transparency in revamped DIR fee criteria. Standard review and payment of DIR fees won’t change anything. Instead, with the right software system, you can automatically track and extract claims data, which will help show the severity of the financial burden DIR fees put on specialty pharmacies.