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Latest news and updates about the Medicare and pharmacy industries.

How One Pharmacy Decreased DIR Fees by Over $10,000

Posted on November 16, 2020 by FDS Amplicare Team


In 2019, Josh Rimany knew he had a problem. His pharmacy, Dilworth Drug & Wellness Center in Charlotte, NC had been hit hard by DIR fees and he needed some options to improve his bottom line. The answer came to him on a joint PDS/FDS Amplicare webinar on DIR fee mitigation.

As an FDS Amplicare customer, Rimany’s pharmacy had access to a number of tools specifically designed to help pharmacies mitigate the effect of DIR fees. Before Medicare Open Enrollment last year, Rimany and his Team Lead Robert Upchurch learned how to identify win-win opportunities that would save patients money in out-of-pocket costs and help the pharmacy’s profitability through DIR fee estimations. 

Once they had identified their high priority patients, they developed a Part D strategy with the help of PDS and FDS Amplicare. Taking into account patient adherence, they were able to identify patients on plans with high DIR fees. lThey then proactively reached out to patients to set up appointments for a free plan comparison to walk them through their options. As a result of their efforts, the pharmacy was able to help 81 patients switch to mutually beneficial plans. This activity led to a gross profit increase of $40,126 (as of October 2020) and a $10,973 decrease in DIR fees (October 2020 compared to 2019).

A Mutually Beneficial Opportunity

The win-win strategy employed by Dilworth involved targeting patients with plan options that were mutually beneficial for them and the pharmacy. The idea behind it is simple: if a patient’s cheapest plan option for the coming year will have lower DIR fees for the pharmacy, then that patient should be a priority for plan comparisons. When presented with all their options, the patient is likely to choose the plan that saves them the most money and doesn’t affect their quality of care. 

The pharmacy also considered patient adherence levels when deciding who to reach out to. Known as DIR mitigation by migration, this similar strategy takes into account the patient’s adherence and how their plan options treat non-adherence. Say, for instance, a patient is non-adherent and their cheapest plan doesn’t penalize the pharmacy for low adherence. If the patient switches to the new plan, the move benefits both the pharmacy and the patient. The same applies to adherent patients with a more cost-effective option that rewards high adherence.  

Identifying these opportunities for each Medicare-eligible patient will be challenging for any pharmacy, particularly one serving a large Medicare population. To easily find these opportunities, Rimany and Upchurch used dedicated reports in FDS Amplicare Match, which analyze patient and pharmacy data to generate patient lists. These reports make it easy to not only prioritize outreach, but also focus messaging. To achieve their results, the pharmacists at Dilworth were able to help 81 patients, but our research has shown that pharmacies can see a significant return on their investment from helping just eight or nine patients find a better plan option. 

The win-win strategy that worked for Dilworth Drug & Wellness Center can easily be applied to other pharmacies. To learn more about how FDS Amplicare can help your pharmacy mitigate DIR fees, reach out to schedule a consultation

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