Pharmacy Payment Challenges in 2024

Decoding the Decline in Reimbursements 

The arrival of 2024 has brought with it a complex web of challenges in the realm of reimbursement. The landscape has shifted dramatically, and the decline in reimbursements is a key concern for pharmacies nationwide. In this article, we will unravel the intricacies behind this decline, exploring the impact of recent CMS rules, the removal of the AMP rebate cap, and the evolving strategies of pharmaceutical manufacturers. We'll also discuss how pharmacies can navigate these challenges and explore potential solutions to safeguard their financial stability. 

One major factor contributing to the decline in pharmacy reimbursements is the Centers for Medicare & Medicaid Services (CMS) rule prohibiting retroactive Direct and Indirect Remuneration (DIR) fees, which became effective on January 1st. This rule disappointed many pharmacy advocates, who had initially hoped that CMS would eliminate DIR fees. Previously, pharmacies faced retroactive DIR fees, sometimes many months after submitting a claim. Often, these fees are based on “quality measures” that are unrelated to dispensing or outside the pharmacy’s control. 

The new rule aims to bring transparency and fairness to reimbursement processes as payers must now apply DIR fees at the point of sale. While this is good news for patients, who may realize lower copayments, pharmacies will receive smaller reimbursements upfront as prices decline. Pharmacies now find themselves in a challenging position, dealing with lower reimbursements at the time of claim submission, while still paying DIR fees from the previous year. Many payers are still assessing DIR fees from 2023 claims. This creates a scenario of “double-dipping” by third-party payers, straining pharmacy balance sheets. Read more >