Title 806 | Chapter 017 | Regulation 512REG
PROPOSED
This document is not yet current.
PUBLIC PROTECTION CABINET
Department of Insurance
Division of Health, Life, and Managed Care
(New Administrative Regulation)
806 KAR 17:512.Professional dispensing fee for dispensing a prescription drug or providing other services.
Section 1.
Definitions.(1)
"Ambulatory pharmacy" is defined by KRS 304.17A-595(1)(b).(2)
"Commissioner" is defined by KRS 304.1-050(1).(3)
"Dispensing Fee," means the professional dispensing fee established pursuant to KRS 304.17A-595(2)(c)2.c.ii.(4)
"Health plan" is defined by KRS 304.17A-591(2).(5)
"Insurer" is defined by KRS 304.17A-591(4).(6)
"Pharmacy benefit manager" is defined by KRS 304.9-020 and KRS 304.17A-161(4).Section 2.
Dispensing Fee. For health plan years beginning on or after January 1, 2027, insurers and pharmacy benefit managers shall reimburse a Kentucky ambulatory pharmacy a professional dispensing fee of $16.31 for each prescription drug or other service provided by the pharmacy or pharmacist delivered pursuant to a Health plan.806 KAR 17:512
SHARON P. CLARK, Commissioner
DJ WASSON, Secretary
APPROVED BY AGENCY: September 8, 2026
FILED WITH LRC: September 14, 2026 at 9:15 a.m.
PUBLIC HEARING AND COMMENT PERIOD: A public hearing on this administrative regulation shall be held at 9:00 AM on November 24, 2026, at 500 Mero Street, Frankfort, Kentucky 40601. Individuals interested in being heard at this hearing shall notify this agency in writing by five workdays prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing is received by that date, the hearing may be canceled. If held, this hearing will be open to the public. Any person who wishes to be heard will be given an opportunity to comment on the proposed administrative regulation. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to be heard at the public hearing, you may submit written comments on the proposed administrative regulation. Written comments shall be accepted through 11:59 PM on November 30, 2026. Send written notification of intent to be heard at the public hearing or written comments on the proposed administrative regulation to the contact person below.
CONTACT PERSON: Shaun T. Orme, Title: Executive Advisor Address: 500 Mero Street, Frankfort, Kentucky 40601 Phone: +1 (502) 782-1698 Fax: +1 (502) 564-1453 Email: shaun.orme@ky.gov
REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT
Contact Person:
Shaun T. Orme Phone: 502-782-1698 Email: shaun.orme@ky.gov
Subject Headings:
Insurance, Health, Pharmacy
(1) Provide a brief summary of:
(a) What this administrative regulation does:
This administrative regulation establishes the professional dispensing fee to be paid to a Kentucky ambulatory pharmacy for each prescription or other service provided by a pharmacy or pharmacist in Kentucky.
(b) The necessity of this administrative regulation:
This administrative regulation is necessary to meet the requirements of KRS 304.17A-595(2)(c)2.a.
(c) How this administrative regulation conforms to the content of the authorizing statutes:
KRS 304.17A-595(2)(c)2.a. requires the commissioner to promulgate a regulation establishing the professional dispensing fee to be paid to a Kentucky ambulatory pharmacy for each prescription or other service provided by a pharmacy or pharmacist in Kentucky, for health plan years beginning on or after January 1, 2027. This new regulation establishes the dispensing fee.
(d) How this administrative regulation currently assists or will assist in the effective administration of the statutes:
This regulation establishes the professional dispensing fee to be paid to a Kentucky ambulatory pharmacy for each prescription or other service provided by a pharmacy or pharmacist in Kentucky, for health plan years beginning on or after January 1, 2027.
(2) If this is an amendment to an existing administrative regulation, provide a brief summary of:
(a) How the amendment will change this existing administrative regulation:
Not applicable
(b) The necessity of the amendment to this administrative regulation:
Not applicable.
(c) How the amendment conforms to the content of the authorizing statutes:
Not applicable.
(d) How the amendment will assist in the effective administration of the statutes:
Not applicable.
(3) Does this administrative regulation or amendment implement legislation from the previous five years?
Yes, 2024 Regular Session Senate Bill 188.
(4) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation:
All ambulatory pharmacies in Kentucky will be paid the dispensing fee for each prescription or for providing other services. In addition, all insurers, as defined in KRS 304.17A-591(4), and all Pharmacy Benefit Managers (PBMs), as defined by KRS 304.17A-591(7), will have to pay the dispensing fee to a Kentucky ambulatory pharmacy. Finally, the Kentucky Employee Health Plan (KEHP) will have to pay the dispensing fee to a Kentucky ambulatory pharmacy.
(5) Provide an analysis of how the entities identified in question (4) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:
(a) List the actions that each of the regulated entities identified in question (4) will have to take to comply with this administrative regulation or amendment:
Ambulatory pharmacies will need to ensure that they submit the correct information to insurers, PBMs, and the KEHP identifying the filling a prescription. Insurers, PBMs, and the KEHP will need to verify the information submitted and pay the correct dispensing fee to the pharmacy.
(b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (4):
The cost associated for Kentucky ambulatory pharmacies is expected to be de minimus. At this point in time, the cost associated for health insurers, PBMs, and KEHP cannot be ascertained. The cost will be determined by the amount of prescriptions filled or other services provided by Kentucky ambulatory pharmacies for the insureds of insurers, PBMs, and KEHP.
(c) As a result of compliance, what benefits will accrue to the entities identified in question (4):
Kentucky ambulatory pharmacies will receive $16.31 for every prescription filled or service provided for the insureds of insurers, PBMs, and the KEHP.
(6) Provide an estimate of how much it will cost the administrative body to implement this administrative regulation:
(a) Initially:
The cost associated with engaging an outside expert to conduct a study of the dispensing fee data submitted to the Commissioner by the Kentucky Board of Pharmacy.
(b) On a continuing basis:
The cost associated with engaging an outside expert to conduct a study of the dispensing fee data submitted to the Commissioner by the Kentucky Board of Pharmacy.
(7) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation or this amendment:
The Department of Insurance’s operational budget.
(8) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change if it is an amendment:
None is anticipated.
(9) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees:
No fee is associated with the promulgation of this regulation.
(10) TIERING: Is tiering applied?
Tiering is not applied as the provisions of this administrative regulation apply to all affected entities equally.
FISCAL IMPACT STATEMENT
(1) Identify each state statute, federal statute, or federal regulation that requires or authorizes the action taken by the administrative regulation:
KRS 304.2-110(1), 304.17A-595.
(2) State whether this administrative regulation is expressly authorized by an act of the General Assembly, and if so, identify the act:
Yes, 2024 Regular Session Senate Bill 188.
(3)(a) Identify the promulgating agency and any other affected state units, parts, or divisions:
The Kentucky Department of Insurance as the implementer and the Kentucky Employee Health Plan (KEHP).
(b) Estimate the following for each affected state unit, part, or division identified in (3)(a):
1. Expenditures:
For the first year:
$0
For subsequent years:
$0
2. Revenues:
For the first year:
$0
For subsequent years:
$0
3. Cost Savings:
For the first year:
$0
For subsequent years:
$0
(4)(a) Identify affected local entities (for example: cities, counties, fire departments, school districts):
No local entities affected.
(b) Estimate the following for each affected local entity identified in (4)(a):
1. Expenditures:
For the first year:
N/A
For subsequent years:
N/A
2. Revenues:
For the first year:
N/A
For subsequent years:
N/A
3. Cost Savings:
For the first year:
N/A
For subsequent years:
N/A
(5)(a) Identify any affected regulated entities not listed in (3)(a) or (4)(a):
Identify additional regulated entities not listed in (3)(a) or (4)(a): Health Plans as defined by KRS 304.17A-591(2) and pharmacy benefit managers (PBMs) as defined by KRS 304.17A-591(7).
(b) Estimate the following for each regulated entity identified in (5)(a):
1. Expenditures:
For the first year:
$0
For subsequent years:
$0
2. Revenues:
For the first year:
$0
For subsequent years:
$0
3. Cost Savings:
For the first year:
$0
For subsequent years:
$0
(6) Provide a narrative to explain the following for each entity identified in (3)(a), (4)(a), and (5)(a)
(a) Fiscal impact of this administrative regulation:
The cost to administer the program in the first year, and subsequent years, for the KEHP, health plans, and PBMs cannot be determined. The cost will depend on the number of prescriptions filled by Kentucky ambulatory pharmacies for insureds under the various plans.
(b) Methodology and resources used to reach this conclusion:
Not applicable.
(7) Explain, as it relates to the entities identified in (3)(a), (4)(a), and (5)(a):
(a) Whether this administrative regulation will have a "major economic impact", as defined by KRS 13A.010(14):
Yes, this administrative regulation will likely have a major economic impact.
(b) The methodology and resources used to reach this conclusion:
Not applicable. For every prescription filled by a Kentucky ambulatory pharmacy the KEHP, health plans, and PBMs will pay a dispensing fee of $16.31. This cost will likely exceed $500,000.
PUBLIC PROTECTION CABINET
Department of Insurance
Division of Health, Life, and Managed Care
(New Administrative Regulation)
806 KAR 17:512.Professional dispensing fee for dispensing a prescription drug or providing other services.
Section 1.
Definitions.(1)
"Ambulatory pharmacy" is defined by KRS 304.17A-595(1)(b).(2)
"Commissioner" is defined by KRS 304.1-050(1).(3)
"Dispensing Fee," means the professional dispensing fee established pursuant to KRS 304.17A-595(2)(c)2.c.ii.(4)
"Health plan" is defined by KRS 304.17A-591(2).(5)
"Insurer" is defined by KRS 304.17A-591(4).(6)
"Pharmacy benefit manager" is defined by KRS 304.9-020 and KRS 304.17A-161(4).Section 2.
Dispensing Fee. For health plan years beginning on or after January 1, 2027, insurers and pharmacy benefit managers shall reimburse a Kentucky ambulatory pharmacy a professional dispensing fee of $16.31 for each prescription drug or other service provided by the pharmacy or pharmacist delivered pursuant to a Health plan.806 KAR 17:512
SHARON P. CLARK, Commissioner
DJ WASSON, Secretary
APPROVED BY AGENCY: September 8, 2026
FILED WITH LRC: September 14, 2026 at 9:15 a.m.
PUBLIC HEARING AND COMMENT PERIOD: A public hearing on this administrative regulation shall be held at 9:00 AM on November 24, 2026, at 500 Mero Street, Frankfort, Kentucky 40601. Individuals interested in being heard at this hearing shall notify this agency in writing by five workdays prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing is received by that date, the hearing may be canceled. If held, this hearing will be open to the public. Any person who wishes to be heard will be given an opportunity to comment on the proposed administrative regulation. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to be heard at the public hearing, you may submit written comments on the proposed administrative regulation. Written comments shall be accepted through 11:59 PM on November 30, 2026. Send written notification of intent to be heard at the public hearing or written comments on the proposed administrative regulation to the contact person below.
CONTACT PERSON: Shaun T. Orme, Title: Executive Advisor Address: 500 Mero Street, Frankfort, Kentucky 40601 Phone: +1 (502) 782-1698 Fax: +1 (502) 564-1453 Email: shaun.orme@ky.gov
REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT
Contact Person:
Shaun T. Orme Phone: 502-782-1698 Email: shaun.orme@ky.gov
Subject Headings:
Insurance, Health, Pharmacy
(1) Provide a brief summary of:
(a) What this administrative regulation does:
This administrative regulation establishes the professional dispensing fee to be paid to a Kentucky ambulatory pharmacy for each prescription or other service provided by a pharmacy or pharmacist in Kentucky.
(b) The necessity of this administrative regulation:
This administrative regulation is necessary to meet the requirements of KRS 304.17A-595(2)(c)2.a.
(c) How this administrative regulation conforms to the content of the authorizing statutes:
KRS 304.17A-595(2)(c)2.a. requires the commissioner to promulgate a regulation establishing the professional dispensing fee to be paid to a Kentucky ambulatory pharmacy for each prescription or other service provided by a pharmacy or pharmacist in Kentucky, for health plan years beginning on or after January 1, 2027. This new regulation establishes the dispensing fee.
(d) How this administrative regulation currently assists or will assist in the effective administration of the statutes:
This regulation establishes the professional dispensing fee to be paid to a Kentucky ambulatory pharmacy for each prescription or other service provided by a pharmacy or pharmacist in Kentucky, for health plan years beginning on or after January 1, 2027.
(2) If this is an amendment to an existing administrative regulation, provide a brief summary of:
(a) How the amendment will change this existing administrative regulation:
Not applicable
(b) The necessity of the amendment to this administrative regulation:
Not applicable.
(c) How the amendment conforms to the content of the authorizing statutes:
Not applicable.
(d) How the amendment will assist in the effective administration of the statutes:
Not applicable.
(3) Does this administrative regulation or amendment implement legislation from the previous five years?
Yes, 2024 Regular Session Senate Bill 188.
(4) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation:
All ambulatory pharmacies in Kentucky will be paid the dispensing fee for each prescription or for providing other services. In addition, all insurers, as defined in KRS 304.17A-591(4), and all Pharmacy Benefit Managers (PBMs), as defined by KRS 304.17A-591(7), will have to pay the dispensing fee to a Kentucky ambulatory pharmacy. Finally, the Kentucky Employee Health Plan (KEHP) will have to pay the dispensing fee to a Kentucky ambulatory pharmacy.
(5) Provide an analysis of how the entities identified in question (4) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:
(a) List the actions that each of the regulated entities identified in question (4) will have to take to comply with this administrative regulation or amendment:
Ambulatory pharmacies will need to ensure that they submit the correct information to insurers, PBMs, and the KEHP identifying the filling a prescription. Insurers, PBMs, and the KEHP will need to verify the information submitted and pay the correct dispensing fee to the pharmacy.
(b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (4):
The cost associated for Kentucky ambulatory pharmacies is expected to be de minimus. At this point in time, the cost associated for health insurers, PBMs, and KEHP cannot be ascertained. The cost will be determined by the amount of prescriptions filled or other services provided by Kentucky ambulatory pharmacies for the insureds of insurers, PBMs, and KEHP.
(c) As a result of compliance, what benefits will accrue to the entities identified in question (4):
Kentucky ambulatory pharmacies will receive $16.31 for every prescription filled or service provided for the insureds of insurers, PBMs, and the KEHP.
(6) Provide an estimate of how much it will cost the administrative body to implement this administrative regulation:
(a) Initially:
The cost associated with engaging an outside expert to conduct a study of the dispensing fee data submitted to the Commissioner by the Kentucky Board of Pharmacy.
(b) On a continuing basis:
The cost associated with engaging an outside expert to conduct a study of the dispensing fee data submitted to the Commissioner by the Kentucky Board of Pharmacy.
(7) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation or this amendment:
The Department of Insurance’s operational budget.
(8) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change if it is an amendment:
None is anticipated.
(9) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees:
No fee is associated with the promulgation of this regulation.
(10) TIERING: Is tiering applied?
Tiering is not applied as the provisions of this administrative regulation apply to all affected entities equally.
FISCAL IMPACT STATEMENT
(1) Identify each state statute, federal statute, or federal regulation that requires or authorizes the action taken by the administrative regulation:
KRS 304.2-110(1), 304.17A-595.
(2) State whether this administrative regulation is expressly authorized by an act of the General Assembly, and if so, identify the act:
Yes, 2024 Regular Session Senate Bill 188.
(3)(a) Identify the promulgating agency and any other affected state units, parts, or divisions:
The Kentucky Department of Insurance as the implementer and the Kentucky Employee Health Plan (KEHP).
(b) Estimate the following for each affected state unit, part, or division identified in (3)(a):
1. Expenditures:
For the first year:
$0
For subsequent years:
$0
2. Revenues:
For the first year:
$0
For subsequent years:
$0
3. Cost Savings:
For the first year:
$0
For subsequent years:
$0
(4)(a) Identify affected local entities (for example: cities, counties, fire departments, school districts):
No local entities affected.
(b) Estimate the following for each affected local entity identified in (4)(a):
1. Expenditures:
For the first year:
N/A
For subsequent years:
N/A
2. Revenues:
For the first year:
N/A
For subsequent years:
N/A
3. Cost Savings:
For the first year:
N/A
For subsequent years:
N/A
(5)(a) Identify any affected regulated entities not listed in (3)(a) or (4)(a):
Identify additional regulated entities not listed in (3)(a) or (4)(a): Health Plans as defined by KRS 304.17A-591(2) and pharmacy benefit managers (PBMs) as defined by KRS 304.17A-591(7).
(b) Estimate the following for each regulated entity identified in (5)(a):
1. Expenditures:
For the first year:
$0
For subsequent years:
$0
2. Revenues:
For the first year:
$0
For subsequent years:
$0
3. Cost Savings:
For the first year:
$0
For subsequent years:
$0
(6) Provide a narrative to explain the following for each entity identified in (3)(a), (4)(a), and (5)(a)
(a) Fiscal impact of this administrative regulation:
The cost to administer the program in the first year, and subsequent years, for the KEHP, health plans, and PBMs cannot be determined. The cost will depend on the number of prescriptions filled by Kentucky ambulatory pharmacies for insureds under the various plans.
(b) Methodology and resources used to reach this conclusion:
Not applicable.
(7) Explain, as it relates to the entities identified in (3)(a), (4)(a), and (5)(a):
(a) Whether this administrative regulation will have a "major economic impact", as defined by KRS 13A.010(14):
Yes, this administrative regulation will likely have a major economic impact.
(b) The methodology and resources used to reach this conclusion:
Not applicable. For every prescription filled by a Kentucky ambulatory pharmacy the KEHP, health plans, and PBMs will pay a dispensing fee of $16.31. This cost will likely exceed $500,000.