Purpose

This bill would create a new directed payment to help ensure people in rural and underserved areas can access prescription drugs. It aims to add a specific payment on top of existing fees to certain pharmacies, funded by state and federal sources, and tied to Medicaid/Medical Assistance programs.

Main Provisions

• Establishes a new directed pharmacy dispensing payment of 4.50 per filled prescription.
• The payment is to eligible outpatient retail pharmacies in Minnesota and is intended to improve and maintain access to pharmaceutical services in rural and underserved areas.
• Managed care plans and county-based purchasing plans (and any pharmacy benefit managers they contract with) must pay this directed payment to eligible outpatient retail pharmacies for drugs dispensed to Medical Assistance enrollees.
• The directed payment is in addition to, and must not replace or reduce, any other dispensing fee paid to the pharmacy.
• The payer must not reduce other payments to the pharmacy as a result of making the directed payment.
• Eligible outpatient retail pharmacy criteria:
  • Licensed under a Minnesota statute (chapter 151).
  • Not owned directly or indirectly, or through an affiliate or subsidiary, by a pharmacy benefit manager (PBM) or by a health carrier (as defined in statute).
  • Located in a medically underserved area or primarily serves a medically underserved population (per HRSA definitions in federal law).
  • Shares common ownership with 12 or fewer Minnesota pharmacies.
• To receive the payment, a pharmacy must submit a form attesting that it meets the eligibility criteria above.
• The commissioner may set and adjust the payment amount based on available state and federal funding.
• Managed care plans, county-based purchasing plans, and PBMs must pay the directed dispensing payment to eligible pharmacies.
• The commissioner will monitor how this affects access to pharmaceutical services in rural and underserved areas.

Significant Changes to Existing Law

• Adds a new subdivision (6i) to Minnesota Statutes 256B.69 creating a directed pharmacy dispensing payment.
• Creates a defined eligibility framework for pharmacies to receive the payment, including ownership and service-area requirements linked to medically underserved designations.
• Requires ongoing funding decisions and adjustments based on state and federal funding availability.
• Establishes a mechanism to recover payments if capitation rates are adjusted due to lack of federal approval, with a cap on recoveries.
• Sets a federal-approval condition: the subdivision remains in effect only if federal approval is received; otherwise, it expires.

Oversight and Funding

• The payment amount and existence depend on state and federal funding and federal approval.
• If federal approval is not obtained for a contract year, capitation rates for managed care and county-based purchasing plans must be adjusted to reflect removal of this subdivision.
• Any required recovery of payments from providers due to rate adjustments must not exceed the increase in rates attributable to this subdivision.
• The commissioner will monitor the impact on access to services in rural and underserved areas.

How It Affects Stakeholders

• Pharmacies: eligible outpatient retail pharmacies may receive an additional $4.50 per prescription if they meet the criteria; there is a new attestation requirement to qualify.
• Managed care plans, county-based purchasing plans, and PBMs: responsible for distributing the directed payment to eligible pharmacies and must not reduce other payments because of this subsidy.
• Medical Assistance enrollees: potential improved access to prescription services in rural or underserved areas.

Potential Implications

• Could increase pharmacy access in underserved regions if funding is stable and approvals are granted.
• Creates a targeted incentive structure that ties payments to geography, service needs, and ownership characteristics.
• Adds a funding condition tied to federal approval; without approval, the program could be rolled back or adjusted.

Relevant Terms directed pharmacy dispensing payment $4.50 per filled prescription eligible outpatient retail pharmacy outpatient retail pharmacy license (chapter 151) pharmacy benefit manager (PBM) health carrier (as defined in statute) medically underserved area medically underserved population HRSA (Health Resources and Services Administration) Medical Assistance enrollees managed care plans county-based purchasing plans capitation rates federal approval state funding attestation form ownership criteria (12 or fewer Minnesota pharmacies)