Making the Most of DIR Contracts: Where to Invest and Why

Pharmacies Thought Leadership

Direct and indirect remuneration (DIR) contracts are diverse. However, they share one common feature: the expectation from payers and PBMs that a pharmacy network will increase its performance and strive for a higher percentile rank year to year. Therefore, retail pharmacies need to push the envelope to generate the best ROI.

Prioritizing Based on Tier

Medicare Star Ratings heavily influence DIR contracts, but each contract has its own set of weights, attribution models, thresholds, and performance payments. This can make it difficult for a pharmacy to determine where to invest limited resources to maximize the value of multiple contracts.

When a pharmacy considers prioritizing a contract, it must assess how close it is to the next tier. If it’s possible to attain that level with reasonable effort, then that’s a contract to prioritize.

Learn how Walgreens was able to boost medication adherence with artificial intelligence. Download our case study now. >>

Finding Contract Opportunities

Many pharmacies look for the one or two biggest contracts that can impact their total reimbursement. But if you want to optimize, you need to look at more factors than just highest total reimbursement. You also need to consider how likely you are to reach the next tier with incremental effort.

Artificial intelligence (AI) empowers you to work on contracts at a granular level, continually answering the question, “What is the best use of my next patient outreach?” The answer to this can be dynamic, as opposed to the static response of: “I’m just focusing on the biggest contracts.” Medication adherence is critical but also complex. AllazoHealth’s AI allows the pharmacy to generate better ROI because the AI engine learns to select the most productive patient outreach.

Predicting DIR Rank as Part of Engagement

Most DIR contracts have a waiting period. Similar to Star Ratings, the performance of a pharmacy network under its DIR contract is not evaluated until the year is over.

One of the things AllazoHealth’s AI Engine can do is predict performance on an ongoing basis. By using data from the many pharmacies that we work with—in addition to payer and provider data—our engine provides a comprehensive look at performance.

Pharmacies aren’t stuck trying to understand the meaning of a single rating and data point from last year. Instead, they can see how outcomes shift over time with various interventions.

Investing and Strategizing for Adherence

In almost every DIR contract, 75-90 percent of performance is based on the three adherence measures. So when you invest in patient adherence, it will greatly impact your DIR performance and reimbursement.

Broad-based strategies to improve adherence only work to a point. However, targeted messaging that identifies and understands the barriers to adherence is highly effective. And that’s where AllazoHealth can help the most, providing intelligent data that allows you to understand your most vulnerable patients.

About AllazoHealth

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

Want to find out more about how AI benefits patient adherence? Contact us today.

Walgreens Case Study #1