A core economic business principle is to maximize revenue while minimizing costs. In the pharmacy industry, direct and indirect remuneration (DIR) fees regularly challenge this fundamental concept, as they require business owners to write checks to Pharmacy Benefit Managers (PBM), which negatively impact the bottom line. Moreover, DIR fee payments often leave pharmacy owners feeling exploited, confused, and understandably frustrated.
It doesn’t have to be this way.
Through PrescribeWellness, a Tabula Rasa HealthCare solution, pharmacies can leverage patient relationship management tools for a proactive approach toward DIR fee mitigation. Empowered by the PrescribeWellness software, pharmacies can plan ahead and prepare for the next collection period, which is key to minimizing – and even beating – DIR fee impact.
In addition to leveraging the power of the PrescribeWellness software solution, here are three steps pharmacies can take now to take control of DIR fee impact.
- Understand your gross and net profit
Just like taxes, the more you know about DIR fees coming down the pipeline, the better you can manage your cash flow. And rest assured, DIR fees are always coming. Assuming your practice operates on a 20% profit margin, DIR fees typically account for 1% of sales, which is equivalent to 5% of your pharmacy’s gross profit. Knowing and understanding this information can help ensure that your pharmacy accrues the appropriate funds so you’re not blindsided or left unprepared at the end of the term!
- Know the plans that have the highest DIR fees and keep track
Despite open enrollment being over – until next year – it doesn’t change the fact that Medicare plans are one of the biggest contributors to DIR fees. Therefore, it is imperative that pharmacies understand which plans are impacting your business the most by talking to your PSAO about contracted PBM rates.
Hint: The PrescribeWellness solution lets you identify how many Medicare patients belong to each plan. Pay attention to which plans cover the most patients, and then determine the DIR criteria for that plan. Focus on the plans that cost your pharmacy the most, so that the next time open enrollment comes around, you can help these patients find the right Medicare plan.
- Accurately calculate your performance payment
We would like to emphasize a simple concept: focus on the plans that you can change. Don’t waste time on plans that have DIR fees associated with a generic dispensing rate. Instead, focus on DIR fees associated with Star Ratings – this is something you can impact! Engage in pharma and plan-funded programs designed to improve performance and provide additional revenue. Make sure you know how to anticipate your fees, and don’t get surprised by the next take-back surge!
The PrescribeWellness software
The best way to get proactive about DIR fees is to focus on profit and performance, which comes down to the revenue you are bringing in. And there is no better way to increase pharmacy profits and performance than by expanding your arsenal of clinical service offerings. The PrescribeWellness software makes it easier than ever to do the following:
- Identify and recruit patients for vaccinations and Medicare plan reviews
- Document, share, and bill for encounters with eCare plans
- Improve patient adherence by growing and sustaining patients in a Med Sync program
- Attract new customers by building your online presence and digital strategy
The PrescribeWellness solution expands patient care, streamlines workflow, and improves customer loyalty, leading to an increase in patient outcomes and pharmacy performance.
Contact us today to learn more about how PrescribeWellness can help you take control of your business through actionable solutions.