Understanding DIR Fees and the Current Landscape
The pharmacy industry has seen its fair share of challenges over the years, but perhaps none as significant as the rapid rise in Direct and Indirect Remuneration (DIR) fees. These fees, which are essentially reimbursement “clawbacks” imposed by Pharmacy Benefit Managers (PBMs), have increased by a staggering 107,400% from 2010 to 2020, causing great concern. Thankfully, significant changes enacted in January 2024 have impacted how PBMs can implement DIR fees. However, it is still crucial for community independent pharmacists to understand and prepare for these changes.
January 2024 DIR Fee Changes: A Move Towards Payment Transparency
In response to growing concerns surrounding DIR fees, the Centers for Medicare & Medicaid Services (CMS) implemented significant changes in 2024. These changes served two primary purposes: to increase transparency in payments to pharmacies and to improve payment predictability. Both changes were a welcome move for community pharmacy owners, who have seen their revenues and profit margins shrink over the years due to DIR fees and have long struggled to understand how those fees were calculated.
January 2024 DIR Fee Changes: Short-Term Benefits for Community Pharmacies
One of the immediate benefits of the changes to DIR Fees is that community pharmacies now have better insight into the status of their finances. Pharmacists no longer have to deal with uncertain reimbursements or annoying and unpredictable DIR fee structures. With improved transparency, pharmacies can make more informed financial decisions, allowing for better business development, planning, and resource allocation.
Increased PBM Transparency May Lead to Fairer Reimbursements
Another positive aspect that came from the changes to DIR Fees in 2024 is that PBMs are now required to provide more information about pharmacy repayments. This increased transparency and accountability continues to be a big proponent in the fight for fairer reimbursements and a more aligned working relationship between PBMs and pharmacy owners. This shift towards transparency/fairness in reimbursement may be promising for the industry.
January 2024 DIR Fee Challenges: Short-Term Challenges for Pharmacies
Though the restructuring of DIR fees in 2024 has resulted in more transparent and equitable reimbursements, these changes have continued to pose significant challenges for some community pharmacies. One of the biggest concerns, especially for smaller community pharmacies, is the potential for cash flow shortages. Cash flow concerns are top of mind for many community pharmacy owners. These shortages, which began in 2024, can by be largely attributed to the retroactive DIR fees from the previous year being collected in addition to new fees being assessed at the point of sale, as required by the changes implemented in January 2024.
Multiple Priorities: Maintaining Controlled Substance Compliance While Navigating Cashflow Challenges
Pharmacy owners dealing with cashflow shortages pharmacy owners will most likely impact staffing hours in the pharmacy. With staffing hours cut, workers will experience an increased workload. In such scenarios, they risk losing sight of other crucial aspects of running a pharmacy – for example, maintaining controlled substance compliance. The risk of neglecting controlled substance compliance as a result of financial concerns is a real one, and pharmacists must find ways to mitigate this challenge.
Implementing Technology to Maintaining Controlled Substances Oversight
One effective way to maintain controlled substance compliance amidst a potential staffing hours reduction is to leverage technology. One such solution is C2 Keep, a fully integrated Controlled Substances Act (CSA) compliance and inventory management tool for pharmacies. By embracing technology, pharmacies can improve efficiency, minimize administrative burdens, and free up time to provide better patient care.
Preventing Diversion and Enhancing Compliance: Additional Technology Benefits
The primary goal of a community pharmacy is to provide easy access and quality care to patients in the community. This includes ensuring that controlled substances are dispensed safely and securely. Neglecting controlled substance compliance can have serious consequences, including the potential for diversion, regulatory penalties, and even pharmacy closure.
C2 Keep, as a cloud-based application, offers pharmacies the tools they need to prevent diversion and enhance controlled substance compliance. The solution allows for real-time monitoring of transactions, helping pharmacies identify and address potential issues before they escalate. In addition, the application helps community pharmacy owners feel most ready for a DEA inspection.
Maintaining CSA Oversight While Managing DIR Fees
To successfully navigate the challenges posed by DIR fees while maintaining strong controlled substance compliance, pharmacies should leverage technology. Gone are the days of relying on manual processes like using a logbooks and Excel documents. These options don’t allow for truly auditable records and increase wait times when filling controlled substance prescriptions. These concerns are further compounded if staffing hours are cut.
By leveraging technology, pharmacists will feel more confident about maintaining controlled substance compliance. Because filling prescriptions is more efficient with integrated technology like C2 Keep, pharmacies will cut patient wait times and reclaim more time to do other things like finding solutions to keep their pharmacies operating when DIR fees are impacting cash flow.
Looking Forward to the Future
As future changes to DIR fees are implemented, it’s essential for pharmacies to remain vigilant and proactive. While the promise of increased transparency and fairer reimbursements is on the horizon, there may be significant financial challenges to navigate in the short term.
At the same time, pharmacists must not lose sight of their responsibility to oversee controlled substances effectively. By embracing technology solutions like C2 Keep, pharmacies can find a great balance between navigating the DIR fees and challenges while maintaining controlled substance compliance. This approach will not only help them weather the storm but also ensure the safety and well-being of their patients and protect their pharmacy’s DEA license.
