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Pharmacy Dispensing Fee Reimbursement

Friday, February 10, 2017   (0 Comments)
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From the Minnesota Retailers Association: The CMS outpatient drug rule pharmacy reimbursement language and proposal for compliance with federal law was not included in Governor Dayton's budget proposal.

The Minnesota Retailers Association (MnRA) is working with Administration officials and other stakeholders proactively on next steps to ensure this important measure is included is budgetary discussions this session. MPhA is also monitoring this issue.
As a reminder, to comply with the final pharmacy reimbursement ruling from Center for Medicare and Medicaid Services (CMS), last year the Minnesota Department of Human Services (DHS) outlined the following methodology:

Pharmacy Reimbursement - RETAIL AND LTC

  1. Acquisition Cost reimbursements: 
    1. NADAC for generic and brand
    2. WAC -2 % for drugs without NADAC
    3. SMAC for multi-score drugs
  2. Dispensing Fee Component reimbursements: $11.35
  3. MN Wholesale Drug Tax on legend Drugs
    1. +2% add on to the acquisition cost component
    2. Would sunset in 2020 with current wholesale drug tax legislation


  • Acquisition Cost Component reimbursements:
    • Existing specialty SMAC, Updated at least monthly
  • Dispensing Fee reimbursements:
    • $11.35 per prescription
  • Wholesale Drug Tax on legend Drugs
    • +2% add on to the acquisition cost component
    • Would sunset in 2020 with current wholesale drug tax legislation

Pharmacy Reimbursement OTC Drugs

  • Acquisition Cost Component reimbursements:
    • NADAC if available, or SMAC
    • Existing dispute process for SMAC
  • Dispensing Fee Component
    • $11.35 per prescription when entire manufacturer's package is dispensed.
    • Prorated dispensing fee for quantities less than the manufactures package. (current law pharmacy must dispense entire package in most cases.)

Annual Financial Impact by (Pharmacy Type)

  • Retail Increase 4.7%
  • LTC Increase 5.9%
  • Rural Independent Pharmacies Increase 5.2%
  • Overall Total increase 2.5%

Annual Financial Impact by (Prescription Type)

  • Specialty Drug increase 2.6%
  • Non-specialty brands decrease 1.1%
  • Generic Legend increase 14.6%
  • OTC Drugs increase 42.5%


  • $3.25 approximately.
  • $6.5 million overall shared equally (state & federal) 

    Minnesota Pharmacists Association


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