Empowering Your Pharmacy: Contract Assistance
Choosing a Pharmacy Service Administration Organization (PSAO) can be a stressful decision for pharmacies uncertain of what to expect. There are many things to consider, but one of the primary concerns most transitioning pharmacies have is what will their contracts look like? Contract assistance is one of the most invaluable services a PSAO can provide, and it should not stop once you finish the enrollment process and have joined your new network. A PSAO that is a valuable partner will continue to work with your pharmacy and strive to ensure your success. We recently asked pharmacists and pharmacy owners what assistance they see as most crucial for their PSAO to provide them when it comes to the world of contracts.
One of the primary concerns an independent pharmacy may have when switching PSAOs is “how will this affect my contracts” and “what will my new reimbursement rates be”? With the inherent lack of transparency built into these agreements, it is difficult to assess what this variance will be. There can even be significant differences between payer contracts within your PSAO since all PBMs handle their reimbursements and remuneration fees inconsistently. It is important to find a PSAO that has your pharmacy’s interest in mind by being as transparent as possible and working to figure out if their contracts will be the best fit for your pharmacy.
Even with transparency, it can still be difficult to discern all the nuances between the available contracts. A valuable PSAO should provide your pharmacy with an adept resource that can communicate key terms in contracts and determine where you can see the most financial benefit. A specialized contracting team that is available to provide transparent information in a concise format to their audience is an invaluable service that your PSAO should offer.
All payer agreements come with their nuances, but they will all have the same key elements your PSAO should focus on – especially for your Medicare Part D patient population, as they are tied to Star Ratings. The major components of Part D agreements that impact pharmacies most are the reimbursement models and direct remuneration (DIR) fee structures. These tend to be the primary focus for pharmacies. However, it is still important to incorporate the payer’s DIR fee into all reimbursement models.
Some contracts are often misleading, providing attractive reimbursement rates but at the cost of a significantly higher DIR fee to be assessed in a separate manner or timeframe. Understanding the timeframe for reimbursements and DIR fee structure can be essential to a successful pharmacy. It is vital to know what your pharmacy will earn at the point of sale, while proactively assessing what DIR fees could be accruing in the background if not taken at the point of sale. A PSAO that can provide you with an escrow process for your business can significantly help offset the variance and uncertainty these fees bring to your business.
Managing payer agreements while juggling the myriad of tasks required to keep your pharmacy running can feel daunting. The purpose of a PSAO is to provide administrative support to a pharmacy, allowing them to focus on their intended purpose – to effectively serve and treat their patient community. When selecting a PSAO, make sure you choose a partner that helps you navigate these agreements and can also empower you with the knowledge and tools you need to best serve your community.
Pharmacy First strives to be your partner in excellence by supporting your success in every way possible. Our in-house contracting team and on-staff pharmacist are available to answer your questions with transparency and clarity. In addition, we provide in-house escrow services to protect your pharmacy from the burden of additional DIR fees. Contact us today at firstname.lastname@example.org to learn more about our PSAO.