Crystal Lennartz, VP, GM, Health Mart Atlas & Atlas Specialty, discussed the upcoming changes to Medicare Part D with direct and indirect remuneration (DIR) during a Pharmacy Times interview at McKesson ideaShare 2023. The changes, effective in 2024, will impact all pharmacies. The Centers for Medicare and Medicaid Services (CMS) updated the definition of negotiated price, which means that all pharmacy price concessions will be included in the point-of-sale, resulting in lower co-pays for patients and increased transparency for pharmacies. However, there will be a period in early 2024 when pharmacies will still experience the effects of direct and indirect remuneration (DIR) fees from 2023 while receiving lower point-of-sale reimbursement. Lennartz emphasizes the importance of understanding this dynamic and preparing for it.
To assist pharmacies during these DIR changes, Health Mart Atlas has developed the DIR Assist program. This voluntary program helps pharmacies navigate financial challenges by providing insights into the amount they may need to set aside and reserving funds via central pay.
The changes to DIR have been on the radar for approximately a year, but they will officially take effect on January 1, 2024. This provides pharmacies with some time in the latter half of the year to prepare for the changes.
Pharmacies can prepare for the cash flow challenges by setting money aside and evaluating their pharmacy operations. They can explore opportunities to generate additional revenue or optimize cash flow through various means.
The DIR changes primarily impact Medicare patients, particularly seniors. Pharmacies play a crucial role in educating seniors about plan choices during open enrollment and explaining the potential impact on out-of-pocket costs. As seniors frequently visit pharmacies more than other healthcare providers, they serve as a valuable resource for plan change education.
Pharmacies should also consider other preparation strategies. Some considerations include reviewing revenue and cash flows, patient and payer mix, and Rx ownership. Programs like Provider Pay can help with accounts receivable, ensuring claims are matched and maximizing revenue. Additionally, inventory management solutions like Pinpoint Community Solutions can free up excess inventory and cash in preparation for 2024.
While retroactive DIR fees will no longer exist, performance remains crucial for pharmacies. In 2024, performance programs will likely undergo a reset, but opportunities for earning upside incentives will still exist. Focusing on adherence to medications and delivering high-quality care aligns with patient needs and presents revenue opportunities.
Looking ahead, Lennartz highlights the momentum gained from the impact of pharmacies during the COVID-19 pandemic. Health Mart and Health Mart Atlas will continue to advocate for fair payment for the services provided by pharmacies and strive for their advancement.
Full video interview on Pharmacy Times here.