Pharmacies have a variety of expenses, including medications, utilities, and labor costs.
There is one in particular that can put pressure on costs: the DIR fee.
This article explains what DIR fees are and how to manage them through compliance packaging.
What are DIR fees?
Direct and indirect remuneration (DIR) fees refer to direct and indirect remuneration.
DIR fees may be pay back to patients six months or more after they are prescribed.
The pay back agency is the pharmacy that prescribed the drug, and the pharmacy must manage claims that are more than six months old, which can be a significant expense for some drugs.
The criteria for determining DIR are not disclosed, so it is unclear how much must be paid back for any given drug.
Therefore, the DIR fee is an unpredictable cost for pharmacies, as they cannot predict when and how much they will be billed.
The original purpose of the DIR fee is to return payments from pharmacy benefits managers (PBMs) and drug sponsors to the pharmacy, ultimately lowering the patient’s premium.
While the goal is to benefit all institutions, it is not currently a good operating system because of the burden placed on pharmacies.
Impact of DIR fees on pharmacies
DIR fees are one of the factors that put pressure on pharmacy operations.
According to a study, 2,200 drug stores were closed in the US from December 2017 to December 2020.
The high billing due to DIR fees is an unanticipated timing from the pharmacy’s point of view.
Therefore, the timing makes it difficult for them to get funding, and as a result, they close.
The following three factors contributed to the closure of pharmacies due to DIR fees:
Unclear pricing
DIR fees make it difficult to read how much to charge for which drugs and when.
Therefore, one has to predict, based on previous experience, that a charge of $〇〇 may be incurred in the next 〇 months.
We have no control over the charges.
DIR fees are not only uncertain in terms of amount, but also in terms of billing date.
In addition, the evaluation criteria to determine the amount to be billed are also unknown, making it impossible to ascertain the amount that should be left over, which is another issue for the future.
It cannot be guaranteed that the money will be returned to patients.
In some cases, patients may not be paid back for DIR fees due to ambiguity in evaluation criteria.
This may lead to complaints from patients that they got paid back in the past but not this time, which may result in lowering the reputation of the pharmacy.
Yuyama was founded in 1964 in Osaka, Japan. It is a company specializing in medical and pharmaceutical automation for over 50 years. It is the largest Pharmacy Automation Company worldwide and is the first company to introduce an automated prescription filling machine to the market. Yuyama started its USA division in 1996 and now has over 3000+ machines in the US market.
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