Midyear Pharmacy Update: Evaluating the Impact of DIR Fees

On January 1, 2024, a new provision from the Centers for Medicare & Medicaid Services took effect that requires insurance plans and pharmacy benefit managers to apply direct and indirect remuneration (DIR) fees at the point of sale. Although this rule aimed to bring more transparency to the industry, many were concerned that it would result in a cash crunch for independent pharmacies—and that’s exactly what has happened.

At the 2024 Total Pharmacy Solutions Summit Summer, held virtually on July 13, a roundtable session titled “Frontline Impacts of Point-of-Sale DIR Fees on Community Pharmacies: Mid-Year Update with AAP” discussed the real-world implications of applying DIR fees at the point of sale rather than through retroactive clawback.

The roundtable featured 4 speakers who are experts in their respective industries: Jeff Harrell, PharmD; Wayne Boese; Carter Tatum; and Jason Ausili, PharmD.

The roundtable discussion featured 4 speakers: Jeff Harrell, PharmD, an independent pharmacy owner and president-elect of the National Community Pharmacists Association’s Board of Directors; Wayne Boese, vice president of sales at American Associated Pharmacies; Carter Tatum, solution sales and strategy manager of financial solutions at EnlivenHealth; and Jason Ausili, PharmD, MSLS, head of pharmacy transformation at EnlivenHealth.

“Going into Q3 [the third quarter] and Q4 of last year, we were really concerned about the impact of the DIR fees coming at the time of the transaction and of course those quarterly clawbacks coming in Q1 and Q2 of this year,” Boese said during the session. “In the initial comments and conversations I had with pharmacy owners, there were a lot of people [who were] not really understanding the impact and I don’t think taking it seriously. But I think there was enough communication that that actually did change over the past 2 quarters of last year.”

Read on for some key takeaways from the round table discussion:

• The 2024 DIR fee hangover mostly impacted pharmacy owners who were not prepared for it and handled it as a business transaction. Those who were involved nationally and had an understanding of the change fared better.
• Pharmacy owners who take advantage of alternative revenue opportunities, such as clinical services, test and treat, and other programs, were able to withstand the negative impact on revenue.
• Technology can help optimize clinical services by streamlining workflows, which gives a pharmacist more free time to invest in expanded clinical service programs and perform them.
• There are several influences changing the independent pharmacy industry, including consumer demand for cost and convenience, public opinion on the need for expanded pharmacist roles, and policy reform on scope of practice and provider status.
• The change in DIR fees has resulted in pharmacy owners implementing strategic shifts in business, such as accessing profitability and identifying opportunities in real time, mitigating lost revenue, and creating workflow efficiencies.
• The DIR fee changes caused a cash crunch for many community pharmacy owners, forcing many to close their doors. Data have shown that there will likely be an 18% decrease in the number of pharmacies across the US.
• Using data to drive business decision-making and streamlining expenditures such as cost of goods and medication synchronization can help pharmacy owners survive the current climate.
• The panelists recommended that pharmacy owners and pharmacists get involved in state pharmacy associations or clinically integrated networks, as well as begin taking advantage of clinical revenue that is not subject to DIR fees.

Read more articles from the Total Pharmacy October 2024 issue and visit drugtopics.com/TPSSSummer2024 to watch all the Total Pharmacy Solutions Summit sessions on demand.

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