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Making the most of DIR contracts: Where to invest and why

Making The Most Of DIR Contracts: Where To Invest And Why

Highlights from a conversation with William Grambley, Chief Operating Officer at AllazoHealth. Got questions? William can be reached at

DIR (Direct and Indirect Remuneration) contracts are very diverse. However, there is one common element: the expectation from payers/PBMs that a pharmacy network will increase its performance and strive for a higher percentile rank year to year. So retail pharmacies need to push the envelope to generate the best ROI.

The power of quality ratings in DIR

While the quality ratings used in DIR contracts are generally based on the star ratings, they may have different weights, different attribution models, different levels of performance payment, and different thresholds. So where should a pharmacy invest to maximize each contract?

When a pharmacy wants to prioritize which contract they’re working on, the key method is to look at how close they are to the next highest tier. If that tier can be reached with a reasonable amount of effort, then that’s probably worth doing, because of the impact on revenue.

Finding contract opportunities

Many pharmacies look for the one or two biggest contracts that can have an impact on their total reimbursement. But if you really want to optimize your total reimbursement, you need to look at more factors than highest total reimbursement. You also need to consider if you are likely to reach the next tier in that contract.

With artificial intelligence, you can choose to work on contracts on a much more granular level, and answer the question, “What is the best use of my next patient outreach?” And that could be a very dynamic answer, as opposed to a static, “I’m just focusing on the biggest contracts.” AllazoHealth’s AI allows the pharmacy to generate better ROI because the AI engine learns to always select the most productive patient outreach.

AllazoHealth can predict DIR rank as part of engagement

Most of DIR contracts have a waiting period. Like the star ratings, the performance of a pharmacy network under its DIR contract is not evaluated until after the year is over.

One of the things AllazoHealth’s AI engine can do for pharmacies is help predict performance on an ongoing basis, because it can access data from across the many pharmacies that we work with, in addition to payer and provider data.

Investing and strategizing for adherence

In almost every DIR contract, 75% to 90% of performance is based on the three adherence measures. So when you invest to improve patient adherence, you’ll have a major impact on your DIR performance and reimbursement.

About AllazoHealth

AllazoHealth uses artificial intelligence to make a positive impact on individual patient adherence. We work with pharmacies to optimize your adherence programs and intervention workflows, increasing reimbursement from pay-for-performance contracts such as DIR.

Find out more about how AI benefits patient adherence. 

Contact us today.