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Latest news and updates about the Medicare and pharmacy industries.

DIR Fees: Your Win-Win Opportunity

Posted on August 26, 2021 by FDS Amplicare Team

In March 2021, the Arkansas Insurance Provider reported that “Arkansas Medicare Part D pharmacy benefits insurer Indy Health Insurance Company, Inc. (IHIC) has been placed under an order of rehabilitation by a circuit court in Pulaski County, Arkansas effective March 18.” The Medicare Part D plan, which operated in Arkansas, Pennsylvania, West Virginia, Illinois, and Georgia, was founded by a group of independent pharmacies who understood the devastating effects of DIR fees on pharmacies and how that affects overall patient care. 

The plan aimed to help pharmacies take on the rising costs of DIR fees by removing all DIR fees for independent pharmacies.

Despite these circumstances, the launch of Indy Health last year shone a light on the benefit of plans with no DIR fees for pharmacies. DIR fees have grown significantly in the past few years. In 2018, small pharmacies paid average DIR fees of $129,613 per store – an 87% increase from 2017, according to an industry survey. In 2019 DIR fees hit a record $9 billion — that’s 18% of total Medicare Part D rebates. This reality has made these plans attractive to pharmacies that are constantly looking for ways to manage these soaring costs and navigate the needs of today’s complex healthcare marketplace. 

In the U.S., there are over 170 plans that don’t have DIR fees, including Medicare Advantage and Part D plans. Many of these plans are regional, which means the number of available plans differs by state. How does this help your pharmacy? 

When comparing plans for patients, having the option of a plan that levies no DIR fees creates a win-win situation where both the patient and the pharmacy benefit from a plan change.

Finding Year-Round Opportunities

The majority of opportunities with no-DIR plans comes during the Annual Enrollment Period in the fall. However, pharmacists also have the chance to engage with patients who are able to enroll in or switch plans at other times during the year... 

That’s where Dual Eligible patients come in. 

Dual Eligible patients are those who are enrolled in both Medicare and Medicaid, or who receive Extra Help through Social Security — and receive full Medicaid benefits and/or assistance with Medicare premiums or cost sharing through a Medicare Savings Program.

These patients qualify for a Special Enrollment Period to make changes to their plans once every quarter between January and September. That adds up to three additional times per year to switch. Many of them are automatically enrolled in programs that don’t fully consider their specific health needs, which makes them a key demographic to target for year-round plan comparisons. 

Additionally, patients who are newly eligible for Medicare or those experiencing plan changes will also have opportunities to enroll in plans outside of the Annual Enrollment Period. For instance, beneficiaries enrolled in an Indy Health plan will have a special enrollment period through April 30 during which they can switch to a new plan. Beginning April 1, CMS will automatically move enrollees into a plan of its choosing. As changes happen throughout the year, it’s important that your patients review their options so they can make sure they are on the best plan for their unique situation.

As you help your patients, keep in mind that the right tools can go a long way to helping you provide high levels of care and build trust and stronger brand loyalty. FDS Amplicare’s complete platform makes it easy for your pharmacy to: 

  • Identify all your Dual Eligible patients: With our software, you can identify patients who qualify for a Special Enrollment Period that allows them to make changes to their plans outside of the AEP. 
  • Find win-win opportunities: Using the new “Recommended Plan Is…” filter, you can determine patients whose most beneficial or most cost-effective plan alternative is a no DIR fee plan in your area.
  • Target your outreach: Once you’ve found your Dual Eligible patients, easily reach out and better engage them about all their healthcare options.

If you’re ready to reach more of your Dual Eligible patients, optimize your engagement, lower your DIR fees, and find win-win opportunities, take our Medicare Dual Eligibility assessment today.

Learn More

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