Challenges in Reimbursement for Pharmacy Services, DIR Fees, and the Evolving PBM Model

Managing health care expenses can be challenging, and pharmacy services are vital in this regard. Nevertheless, the compensation complexities for pharmacy services vary considerably, impacting both patients and providers.¹

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The managed care facet of health care poses distinctive challenges for pharmacies, such as issues with direct and indirect remuneration (DIR) fees, the ever-changing pharmacy benefit manager (PBM) model, and the overall intricacy of the managed care system.^1,2 Regrettably, these difficulties may result in unpredictable expenses and losses on prescriptions for pharmacies, making it problematic to negotiate equitable reimbursement rates for their services.^1,2

Addressing these concerns and striving toward establishing an impartial system that benefits patients and providers alike is crucial.^1,2 By doing so, we can eliminate barriers impeding patient access to needed care while promoting a more balanced health care system for all parties involved. One primary hurdle pharmacy services encounter in managed care is DIR fees, which pharmacies pay to PBMs and other organizations to stabilize drug reimbursements, according to PBMs.³

Nonetheless, they tend to be unpredictable and exorbitant, resulting in financial ambiguity for pharmacists, and consequentially influencing patient care.³ According to a report released by the National Community Pharmacists Association (NCPA) in 2018, many community pharmacies are experiencing significant barriers in their operations due to DIR fees.³ This phenomenon has resulted with numerous establishments reporting total expenditures well into 6 figures on an annual basis.³

Due to the continuously evolving PBM model, pharmacy services in managed care face a challenge. It is the responsibility of PBMs to negotiate drug prices with manufacturers, determine pharmacy reimbursement rates, and set formularies.⁴

However, the PBM model has been scrutinized for its potential conflicts of interest and lack of transparency. Some PBMs stand accused of steering patients toward higher priced drugs, prioritizing profits over patient care, and enforcing restrictive contracts on pharmacies.⁴

These issues can impede pharmacists from providing quality care and maintaining financial stability. As per research published in the Journal of Managed Care & Specialty Pharmacy in 2021, "PBMs have come under criticism due to their dual role as negotiators and adjudicators of pharmacy claims that raise questions regarding their transparency and an increased potential for conflicts of interest."^3,4

Moreover, the comprehensive intricacies of the managed care system entail various obstacles to pharmacy services.⁵ Managed care organizations (MCOs) manage and synchronize patient health care services, which include pharmacy services.⁵

Nevertheless, complying with the regulations and laws governing managed care can be arduous and perplex medical personnel and patients.⁵ Furthermore, the disintegration of the health care system can pose a challenge for pharmacists to strategize coordinated care with other professionals and guarantee that patients are administered suitable treatments.⁵

As per a 2019 study conducted by the American Pharmacists Association, offering optimal care can be an intricate task for pharmacists owing to the intricacy of health care systems.⁵ This becomes magnified when caring for patients with complex medical requisites who oftentimes seek attention from multiple practitioners.

Amid various obstacles, health care providers and pharmacists can initiate measures to enhance compensation for pharmacy services in managed care.⁶ One stratagem is to advocate for policy amendments that tackle the predicaments related to DIR fees and the PBM model.⁶

The NCPA propounds that PBMs be bound by legislation requiring them to divulge all dues and rebates while prohibiting gag clauses on pharmacies, which hinder the discussion of lower cost options with patients.^4,6 Another tact involves ameliorating collaboration and communication among health care providers and pharmacists.^4,6

By uniting efforts to coordinate patient care, pharmacists have a wider scope of influence in alleviating health care costs and managing patients' health.^6,7 A study conducted by the Journal of the American Pharmacists Association in 2020 noted, "Collaborative care models involving pharmacists have proven effective in improving patient outcomes while decreasing overall healthcare expenditures."⁶

Pharmacists and other health care providers have several strategies for enhancing reimbursement of pharmacy services in managed care.⁷ Aside from the approaches above, additional measures can be employed.

One method involves fostering cordial connections with MCOs and other payers to secure favorable reimbursement rates.^5,7 Investing in effective technology and data analytics enables pharmacists to comprehensively monitor patient outcomes, demonstrating the superiority of their services. This step-by-step approach facilitates a compelling argument for equitable reimbursement rates by emphasizing the effectiveness of pharmacy services.⁷

In conclusion, the difficulties in compensating for pharmacy services in managed care are extensive and diverse, affecting patients and providers alike. Several factors, such as DIR fees, the dynamic PBM model, and the intricate nature of the managed care system, influence the issue. Despite these challenges, pharmacists are essential in enhancing patient care and trimming health care expenditures by advocating for policy reform, enhancing communication and teamwork, and investing in technology and data analytics.

References

1. ASHP statement on the pharmacist's role in Public Health. Accessed May 10, 2023. Available from: https://www.ashp.org/-/media/assets/policy-guidelines/docs/statements/role-of-health-system-pharmacists-in-public-health.pdf.

2. Durham DP, Landon BE, Casalino LP, Richman BD. Pharmacy benefit managers: Transparency, accountability, and impact on patient care. J Manag Care Spec Pharm. 2021;27(7):903-907. doi:10.18553/jmcp.2021.27.7.903.

3. Lounsbery JL, Green CG, Bennett MS. Collaborative care models involving pharmacists: An overview for policymakers. J Am Pharm Assoc (2003). 2020;60(4):e94-e101. doi:10.1016/j.japh.2020.02.018.

4. National Community Pharmacists Association. DIR fees: Impact on community pharmacies. 2018. Available from: https://www.ncpa.org/pdfs/dir-impact-on-community-pharmacies.pdf.

5. Journal of Managed Care & Specialty Pharmacy. 2021;27(7):903-907. doi:10.18553/jmcp.2021.27.7.903.

6. American Pharmacists Association. The role of the pharmacist in the healthcare system. 2019. Available from: https://www.japha.org/article/S1544-3191(19)30248-1/fulltext

7. Journal of the American Pharmacists Association. 2020;60(4):e94-e101. doi:10.1016/j.japh.2020.02.018.