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Five Things Providers Must Know About Express Scripts’ Newly Implemented DIR Program

Specialty pharmacies and physician dispensers will experience a drastic reduction in Medicare net reimbursement rates from Express Scripts, Inc. (ESI) beginning in the plan year 2020. ESI has implemented a DIR Fee program in certain Medicare Part D networks, likely including Cigna following its purchase of ESI. ESI has followed the lead of other major PBMs. Declining net reimbursement rates are the number one Provider concern nationally.

Here are the top five developments that every Provider can expect beginning with the plan year 2020: 

  1. 99% of pharmacies and physician dispensers in applicable Medicare Part D networks will have to pay ESI for DIR fees
  2. ESI will recoup DIR fees on all Medicare Part D claims in ESI’s Performance Networks
  3. Pharmacies will be assessed DIR fees of “up to 6%” of AWP
  4. ESI’s contract terms are indefinite, ambiguous and generally provide no guidance on how to minimize these DIR fees or when ESI will collect DIR fees
  5. Providers have rights under contract and law to challenge DIR fees and unreasonably low reimbursement rates

Frier Levitt has been at the forefront of challenging DIR fees unreasonably assessed against Providers. After accounting for DIR fees many pharmacies are reimbursed less than acquisition cost with respect to Medicare claims. Contact Frier Levitt today to speak with Jonathan E. Levitt, Esq. or Steven L. Bennet, Esq. for help with ESI’s new DIR program.