{"data":{"id":"us-ky/krs-304.17a-595","jurisdiction":"us-ky","citation":"KRS 304.17A-595","heading":"Definitions for section -- Requirements for contract for provision of","body":"pharmacy services -- Minimum reimbursements -- Administrative regulations.\n(1) As used in this section:\n(a) \"Actual overpayment\" means the portion of any amount p aid for pharmacy or\npharmacist services that:\n1. Is duplicative because the pharmacy or pharmacist has already been paid\nfor the services; or\n2. Was erroneously paid because the services were not rendered in\naccordance with the prescriber's order, in which  case only the amount\npaid for that portion of the prescription that was filled incorrectly or in\nexcess of the prescriber's order may be deemed an actual overpayment.\nThe amount denied, refunded, or recouped shall not include the\ndispensing fee paid to th e pharmacy if the correct medication was\ndispensed to the patient;\n(b) \"Ambulatory pharmacy\" means a pharmacy that:\n1. Is open to the general public; and\n2. Dispenses outpatient prescription drugs;\n(c) \"National average drug acquisition cost\" means the nat ional average drug\nacquisition cost, or NADAC, for a prescription drug or other service that is:\n1. Determined by a survey of retail pharmacies; and\n2. Published by the federal Centers for Medicare and Medicaid Services;\n(d) \"National drug code number\" means the unique national drug code number\nthat identifies a specific approved drug, its manufacturer, and its package\npresentation;\n(e) \"Net amount\" means  the amount paid to the pharmacy or pharmacist by the\ninsurer, pharmacy benefit manager, or other administrator less any fees, price\nconcessions, and all other revenue passing from the pharmacy or pharmacist\nto the insurer, pharmacy benefit manager, or other administrator; and\n(f) \"Wholesale acquisition cost\" means the manufacturer's list price for the drug\nto wholesalers or direct purchasers in the United States, not including prompt\npay or other discounts, rebates, or reductions in price, for the most rec ent\nmonth for which the information is available, as reported in wholesale price\nguides or other publications of drug pricing data.\n(2) To the extent permitted under federal law, every contract between a pharmacy or\npharmacist and an insurer, a pharmacy be nefit manager, or any other administrator\nof pharmacy benefits for the provision of pharmacy or pharmacist services under a\nhealth plan, either directly or through a pharmacy services administration\norganization or group purchasing organization, shall:\n(a) Outline the terms and conditions for the provision of pharmacy or pharmacist\nservices;\n(b) Prohibit the insurer, pharmacy benefit manager, or other administrator from:\n1. Reducing payment for pharmacy or pharmacist services, directly or\nindirectly, under a reconciliation process to an effective rate of\nreimbursement. This prohibition shall include, without limitation,\ncreating, imposing, or establishing direct or indirect remuneration fees,\ngeneric effective rates, dispensing effective rates, brand effecti ve rates,\nany other effective rates, in -network fees, performance fees, point -of-\nsale fees, retroactive fees, pre -adjudication fees, post -adjudication fees,\nand any other mechanism that reduces, or aggregately reduces, payment\nfor pharmacy or pharmacist services;\n2. Retroactively denying, reducing reimbursement for, or seeking any\nrefunds or recoupments for a claim for pharmacy or pharmacist services,\nin whole or in part, from the pharmacy or pharmacist after returning a\npaid claim response as part of the a djudication of the claim, including\nclaims for the cost of a medication or dispensed product and claims for\npharmacy or pharmacist services that are deemed ineligible for\ncoverage, unless one (1) or more of the following occurred:\na. The original claim was submitted fraudulently; or\nb. The pharmacy or pharmacist received an actual overpayment;\n3. Reimbursing the pharmacy or pharmacist for a prescription drug or other\nservice at a net amount that is lower than the amount the insurer,\npharmacy benefit manager , or other administrator reimburses itself or a\npharmacy affiliate for the same:\na. Prescription drug by national drug code number; or\nb. Service;\n4. Collecting cost sharing from a pharmacy or pharmacist that was\nprovided to the pharmacy or pharmacist by a n insured for the provision\nof pharmacy or pharmacist services under the health plan; and\n5. Designating a prescription drug as a specialty drug unless the drug is a\nlimited distribution drug that:\na. Requires special handling; and\nb. Is not commonly carri ed at retail pharmacies or oncology clinics\nor practices; and\n(c) Notwithstanding any other law, provide the following minimum\nreimbursements to the pharmacy or pharmacist for each prescription drug or\nother service provided by the pharmacy or pharmacist:\n1. a. Except as provided in subdivision b. of this subparagraph,\nreimbursement for the cost of the drug or other service at an\namount that is not less than:\ni. The national average drug acquisition cost for the drug or\nservice at the time the drug or servi ce is administered,\ndispensed, or provided; or\nii. If the national average drug acquisition cost is not available\nat the time a drug is administered or dispensed, the wholesale\nacquisition cost for the drug at the time the drug is\nadministered or dispensed.\nb. The minimum reimbursement for the cost of a drug or other\nservice required under this subparagraph shall not apply to a\npharmacy permitted under KRS Chapter 315 with a designated\npharmacy type of \"retail chain\" on file with the Kentucky Board of\nPharmacy, or a pharmacist practicing at such a pharmacy, until a\ndetermination by the commissioner under subparagraph 2.a. of this\nparagraph has taken effect.\nc. For purposes of complying with this subparagraph, the insurer,\npharmacy benefit manager, or other administrator shall utilize the\nmost recently published monthly national average drug acquisition\ncost as a point of reference for the ingredient drug product\ncomponent of a pharmacy's or pharmacist's reimbursement for\ndrugs appearing on the national average drug acquisition cost list;\nand\n2. a. Except as provided in subdivision b. of this subparagraph, for\nhealth plan years beginning on or after January 1, 202 7,\nreimbursement for a professional dispensing fee that is not less\nthan the average cost to dispense a prescription drug in an\nambulatory pharmacy located in Kentucky, as determined by the\ncommissioner in an administrative regulation promulgated in\naccordance with KRS Chapter 13A.\nb. i. The minimum dispensing fee required under subdivision a.\nof this subparagraph shall not apply to a mail -order\npharmaceutical distributor, including a mail-order pharmacy.\nii. For health plan years beginning prior to January 1, 2027, and\nfor any future health plan years for which a determination by\nthe commissioner under subdivision a. of this subparagraph\nhas not taken effect, the minimum dispensing fee for a\npharmacy permitted under KRS Chapter 315 with a\ndesignated pharmac y type of \"retail independent\" on file\nwith the Kentucky Board of Pharmacy, or a pharmacist\npracticing at such a pharmacy, shall be not less than ten\ndollars and sixty-four cents ($10.64).\nc. In acquiring data for, and making, the determination required\nunder subdivision a. of this subparagraph, the commissioner shall:\ni. Promulgate an administrative regulation in accordance with\nKRS Chapter 13A that establishes the data elements to be\ncollected by the Kentucky Board of Pharmacy under  KRS\n315.038;\nii. Conduct a study of the dispensing data submitted to the\ncommissioner by the Kentucky Board of Pharmacy in\naccordance with KRS 315.038;\niii. Repeat the study every two (2) years to obtain updated\ninformation;\niv. Adjust the determination every two (2) years as appropriate\nbased upon the results of each study; and\nv. Comply with all requirements of KRS 315.038.\nd. In carrying out his or her duties under this subparagraph, the\ncommissioner shall cooperate and consult with the Kentucky\nBoard of Pharmacy.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=55758","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:47Z","sha256":"3e35e321a657bc2465a2410527304239fac15210cb4de23d5321aa02c438b228","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.17a-593","next":"us-ky/krs-304.17a-597"},"notice":"GroundRules: Original legal text. Not legal advice."}