DIR Fees are Killing You... How Can Your Pharmacy Software Help?

Independent pharmacies across the U.S. continue to struggle with PBM claw backs, DIR fees, and disappearing profits. How can local pharmacies survive these tumultuous times all while fighting nationwide to reel in PBM’s through legislation? It seems almost weekly we’re hearing stories of independent pharmacies closing after decades of servicing their community due to nonstop losses and negative profits at the hands of the Pharmacy Benefit Managers. As a matter of fact, according to a report by XIL consulting “during the 12 months between June and July 2018/19, over 2,200 pharmacies went out of business,” claiming that excessive fees drove them to close.

DIR fees, or direct and Indirect Remuneration fees, are post-Point of Sale fees paid by the pharmacies for participation in a Part D PBM network. According to reports by XIL Consulting, “DIR pharmacy fees overall have skyrocketed by 1,600% in the last five years, totaling $8.5B since 2013.” While DIR fees were originally intended to help offset drug costs for seniors, through loopholes, PBM’s have been able to profit off these fees to the tune of billions of dollars, leaving many critical patients unable to afford their medications. PBM fees are single-handedly putting independent pharmacies out of business by making it next to impossible to keep their businesses running profitably.

Without careful analysis of Part D claims, independent pharmacists run the risk of taking a major hit once their claims are assessed by the PBM's and they receive the explanation of benefits. While transparency is not required at the point of sale and time of claims adjudication, that doesn’t mean the pharmacies have to be kept completely in the dark. By utilizing many of the tools Datascan builds into its pharmacy management software, pharmacists are able to become better aware of DIR fees at the time of adjudication, better assess each claim, and hopefully avoid or reduce many of the losses.  

We constantly hear of claims being reimbursed at a loss or pushing patients to call mail order or even transfer their prescriptions to a CVS. Many of these losses aren’t even being displayed to the pharmacy while they’re transmitting claims, leaving the outcome of the prescription’s net reimbursement questionable at best. The sad and horrific truth is that many pharmacists are dispensing medications to patients with no idea that in the future, they are going to be charged an enormous fee for that prescription. Pharmacy DIR fees are being assessed on arbitrary and obscure ratings/rankings that the pharmacies have truly no way to accurately track. Datascan Pharmacy Software has built a one-of-a-kind DIR Fee estimator directly into our Pharmacy Software that helps pharmacies not only track DIR fees, but displays the fee at the time of adjudication. This is a game changer.

In Datascan's Winpharm Pharmacy System, you can even set a hard stop reimbursement warning with regards to expected reimbursement after the estimated DIR fee has been applied on the adjudication screen. Of course, Datascan's Pharmacy Software also allows for reporting so you can get a sense of where you stand financially by estimating what will be clawed back by the PBM in the future. There is no level playing field, and most independent pharmacies are not charged the same fees; Datascan understands this and has created a truly custom utility that allows each pharmacy to configure their contracted Part D plans with their specific fees. If we can equip pharmacists with more information and tools to better analyze DIR fees we can hopefully outsmart the PBM's and see better sustainability among community pharmacies across the U.S. If your pharmacy software is not giving you the tools necessary for you to succeed, it may be time to consider finding a new pharmacy software vendor like Datascan.

While there is seemingly no way around DIR fees and PBM unfairness, Datascan continues to improve their technology to better serve pharmacies and arm them with the tools to fight back against the corruption. According to PBM’s, DIR fee percentages are raised due to low adherence to maintenance medications by patients. If you can keep these percentages down, it will keep your DIR fees down and increase profits for your pharmacy.

Take advantage of the innovative and helpful features packed into your pharmacy software! Datascan's automated tools for helping patients refill their medications, mobile refills application, and Winpharm’s patient adherence tools and maintenance medication utilities, can help achieve just that – lower DIR fees. Utilizing the technology in your pharmacy software to free up time also allows pharmacists to spend more time analyzing their claims and reimbursements to come up with savvy ways to work around the PBM's.

We know many independent pharmacy owners are fearful for the future but Datascan Pharmacy Software remains steadfast in its commitment to the industry and is hopeful that many pharmacies around the country will do the same. Understanding the way PBM's and DIR fees work is a must for independent pharmacy survival!

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Contact us today to schedule a live, one on one, free pharmacy software demo with a member of our sales team. Just like our software, the Datascan demo is unique. While many of our competitors herd you into a virtual conference call with others looking at their software, our one on one demonstration gives you the time to ask questions, explain your needs, and be treated like a person, not a number!

Give us a call 877-222-RXRX or email and experience the difference.