Battling DIR Fees
One way to fight back: “Contact your representative and your two senators and make sure that they can spell DIR fees backwards and forwards – in other words, get RID of DIRs.”
Retail pharmacies’ margins are dwindling. Many independent pharmacies have gone out of business in recent years and chains have formed new partnerships to survive. Now, the profitability of both chain and independent pharmacies is being affected by direct and indirect remuneration (DIR) fees that insurers are retroactively charging pharmacies after filling Medicare Part D prescriptions.
This year, some major pharmacy benefit managers (PBMs), including Aetna and CVS Caremark, are inappropriately collecting DIR fees from pharmacies, according to pharmacists and the National Community Pharmacists Association (NCPA).
“When the pharmacy processes a script, the PBM says how much they are going to pay for it,” said B. Douglas Hoey, RPh, NCPA CEO. “However, the DIR fees are breaking the PBM’s word. Let’s say the PBM says they are going to pay $25 per script. The DIR fee may come three months later, so they may only pay $18. It is a retroactive payment clawback.”
While PBMs claim that DIR fees are a form of pay-for-performance--rewarding top-performing pharmacies in Medicare Part D’s star ratings, the reality is that even top-performing pharmacies receive “very little, if anything, back in incentives compared to the fees collected,” according to Hoey.
Some pharmacies are also concerned about Humana’s Quality Network program for 2017, which will levy pharmacies $5 per Medicare Part D script filled when the script is run through Humana insurance.
An owner of several independent pharmacies told Drug Topics that his pharmacies will opt not to fill Medicare Part D scripts through Humana because of the fee. “The $5 in some cases is half of our profits and in some cases it is all of our profits. Plus, there are no savings to the patients,” the owner said.
However, Humana established the program so that pharmacies would not just be participating in a preferred network. Instead, the insurer aims to provide a “true value-based preferred network opportunity that is based solely on widely-accepted standards of quality performance,” said William Fleming, President of Humana Pharmacy Solutions. The program will use common pharmacy quality measures, including the rate of medication adherence for members taking diabetes, blood pressure, and cholesterol medications.
“We believe that inclusion in our preferred networks will allow community pharmacies to better compete for Humana members, potentially increasing patient volume, while pushing forward a movement in community pharmacy in improving quality of care,” Fleming said.