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"DIR" Fees De-Mystified - Sponsored by Live Oak Bank Pharmacy Podcast Episode 279

Pharmacy Podcast Health Policy Check-up segment Government Affairs Strategist – Ron Lanton III, Esq. interviews Susan Pilch Vice President, Policy and Regulatory Affairs of the NCPA about Direct and Indirect Remuneration Fees. 


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Frequently Asked Questions (FAQs) About Pharmacy “DIR” Fees

Q. What does “DIR” stand for?

A. “DIR” stands for “direct and indirect remuneration” and was initially a term coined by the Centers for Medicare and Medicaid Services (CMS) related to the Medicare Part D benefit to address price concessions (e.g. drug manufacturer rebates) that would ultimately impact the gross prescription drug costs of Medicare Part D plans that were not captured at the point of sale. Plans/PBMs are required to submit an annual “DIR” report to CMS, which is used by CMS in tandem with Prescription Drug Event (PDE) data to “true up” what is paid to a Medicare Part D plan by CMS for a given plan year.

Q. Exactly what are pharmacy “DIR Fees”?

A. The use of the term “DIR Fee” to describe arrangements between Plans/PBMs and pharmacies is somewhat of a misnomer--it is really a “catch-all” term designed to encompass a number of different types of “fees” including “pay to play” fees for network participation as well as periodic reimbursement reconciliations. For example, Plans/PBMs have used the term “DIR Fee” to describe a “true-up” between a target reimbursement rate in a participating pharmacy agreement and the aggregated effective rate actually realized by a pharmacy as well as a “true up” between the aggregate MAC/adjudicated rate and the aggregate contracted rate. In addition, the term “DIR fee” is also used to refer to a payment mechanism to pharmacies for the fulfillment of various quality measures or alternately a fee assessed to pharmacies for non-compliance with quality measures. One reason why the term “DIR fee” may be used by a Plan/PBM is to bolster their assertion that these fees cannot be determined at the point of sale—which would explain why these fees are collected from pharmacies after claim adjudication.

Q. Are DIR fees assessed to pharmacies legal?

A. As mentioned above, “DIR fee” is simply the terminology that Plans/PBMs are currently using to categorize certain pharmacy network participation fees and the reconciliation of certain contractual terms with actual reimbursement. When CMS defined DIR and mandated the annual reporting of DIR, the intent was mainly to capture rebates from pharmaceutical manufacturers to Plans/PBMs related to formulary positioning and other similar remuneration which impacts a Medicare Part D plan’s gross prescription drug cost that is not passed through at the point of sale. CMS certainly did not foresee that “DIR fees” would be used to describe the types of fees charged by Plans/PBMs to pharmacies under this moniker. The fees themselves are legitimate; however, it could be argued that there does not seem to be adequate disclosure to the pharmacies or the contracting entities by the Plan/PBM as to exactly how these fees are calculated either at contract initiation or at the time these fees are actually assessed and reported to the pharmacy or contracting entity. The detail level of the disclosure of assessed DIR fees varies based on the information provided by the Plan/PBM. As such, more transparency around “DIR Fees” is needed.

Q. How Are “Pay to Play” DIR Fees Assessed at the Pharmacy Level?

A. Sometimes, pharmacies will be assessed a fee to participate in a “preferred” network. These types of fees are typically assessed as a flat fee per-claim or as a flat percentage that is assessed at regular intervals. The “fees” are essentially price concessions and Medicare Part D plans typically reflect them in their annual DIR report to CMS rather than at the point of sale in PDE records. Q. How are “Payment Reconciliation” DIR Fees Determined and Assessed at the Pharmacy Level? A. Sometimes pharmacies will be assessed DIR Fees that are the result of a “true-up” of a target reimbursement rate in a participating pharmacy agreement to an aggregated effective rate across all prescriptions, branded prescriptions and/or generic prescriptions at designated intervals. The reconciliation process is usually conducted at certain intervals (usually quarterly or annually). 

Susan Pilch

Vice President, Policy and Regulatory Affairs

National Community Pharmacists Association (NCPA)

Susan Pilch is the Vice President of Policy and Regulatory Affairs for the National Community Pharmacists Association (NCPA). Prior to this position, she worked as a multi-state lobbyist representing primary wholesale pharmaceutical distributors as well as served as Director of state legislative and regulatory advocacy for another health-related professional association.

Susan began her career in the health policy/legislative arena immediately following her graduation from law school when she worked for the Maryland House of Delegates Judiciary Committee.

Direct download: DIR_FEES_DeMystified.mp3
Category:Pharmacy -- posted at: 8:09am EDT

Investing in the Right Healthcare Conferences through Data Intelligence - Pharmacy Podcast Episode 278

As a pharmacy professional, how can you be sure which industry conferences to invest in and attend? Which Healthcare Conferences do you need to attend? 

Erin L. Albert, MBA, PharmD, JD - Pharmacy Podcast Show Guest host brings our listeners a dynamic interview with Kristin Eilenberg CEO at Lodestone Logic. 

Lodestone Insights  puts information at the fingertips of business leaders allowing them to make more informed and strategic business decisions. We have built the world’s only human curated and organized database of information and activities happening at conferences and symposia. We are tracking thousands of conferences in the healthcare, pharmaceuticals, science, diabetes, oncology, immunology, neuroscience, and technology sectors. Our clients leverage our Lodestone Insights products and services to make more informed strategic decisions.

Through Lodescore, Lodesight, and our other products, managers, business development, competitive intelligence, due diligence, sales, marketing, and brand professionals are able to tap millions of points of data like –

  • Conference information – name, location, dates, organizers, # of attendees, etc.
  • Sponsor Company Names
  • Sponsorship levels
  • Agenda and Poster Sessions, and
  • Speakers and their Companies


What is LodeStone Insights? 

See here:

Access to Lodescore will allow the user to shop and compare conferences by keyword, date, and location. The tool provides data views by conference name, category, date, location, venue, registration price, and other conference information.

Most importantly, users will have access to the Lodescores for each conference. This is a numerical value placed on each conference and calculated using our unique and proprietary algorithms.Lodescore evaluates three distinct aspects of conference participation = education, networking, and business development. All are measured on a five-point scale.

Direct download: Kristin_Eilenburg_Lodestone_Logics_FINAL.mp3
Category:Pharmacy -- posted at: 8:50pm EDT

Pharmapreneurs - the Pharmacist Entrepreneur - Pharmacy Podcast Episode 277
Dr. Blair Thielemier interviews pharmacist & entrepreneur - Simone Sloan about what drives entrepreneurship, leadership, and transforming our pharmacy industry.
Simone Sloan, RPh, MBA, is an entrepreneur, pharmacist, mentor, and business and leadership coach. Her pharmacy experience spans long-term care, retail, and managed care pharmacies. She has honed her business skills as a marketer, worked in medical affairs, performed technical writing, and managed business teams. As a business and leadership coach, Simone brings balance and energy to support her client's professional and personal goals. More information about Simone can be found at

Co-Host Podcaster: Blair Green Thielemier, PharmD Blair Thielemier PharmD

Blair Green Thielemier, PharmD is an independent MTM consultant pharmacist licensed in Arkansas and Missouri.  She is the founder of BT Pharmacy Consulting, LLC. where she works with pharmacies to implement clinical services programs as well as individual pharmacist consulting firms.

Dr. Thielemier is a contributing author for Pharmacy Times and serves on the Arkansas Care Transitions Medication Safety Committee.

More information about Dr. Thielemier and BT Pharmacy Consulting can be found on their website at 

Direct download: Simone_Sloan_Dr._Blair__FINAL.mp3
Category:Pharmacy -- posted at: 7:50am EDT

Fighting for Drug Pricing Transparency - Pharmacy Podcast Episode 276

Ron Lanton - with True North Political Solutions brings another Health Policy Check-Up Segment with State Rep. Heidi Brooks with the state of Maine House of Representatives. She is a native of the Lewiston-Auburn area and graduated in the top 10 of her high school class. Brooks went on to earn a bachelor's degree at Boston College and a medical degree at New York Medical College. After completing an internship and residency in internal medicine at St. Elizabeth's Medical Center in Brighton, Mass., she returned to Maine. 

Brooks has been actively involved in the community as a volunteer with the Maine People's Alliance, where she serves as co-chair of the board. She is the secretary of the Maine Democratic Party-Democratic State Committee. She is a grateful graduate of the 2012 class of Emerge Maine, a training program for Democratic women. She serves on the local Head Start board.

They discuss MAC Drug Pricing Transparency and other pressing issues to our pharmacy industry. 

Direct download: MAC_Pricing_Transparency_Heidi_Brooks_Ron_Lanton.mp3
Category:Pharmacy -- posted at: 11:23pm EDT