KPhA along with its pharmacy partners continue to try and address pharmacists concerns about chronic under reimbursement by the Medicaid Managed Care Organizations. After a meeting with Medicaid and conversations with the Kentucky Department of Insurance, it became clear that pharmacists need to file complaints with the Kentucky Department of Insurance on these issues.

We know that many of you have been waiting until the regulation on SB 117 goes into effect, but below is some direction on complaints that can be filed before the regulation goes into effect and complaints that can be filed outside of the MAC appeals process. Please consider filing all complaints.

SB 117:

Areas Where Immediate Complaints Could Be Filed:

1. Not using proper definition of “maximum allowable cost” which in Kentucky means “…the maximum amount that a pharmacy benefit manager will reimburse a pharmacy for the cost of a generic drug and does not include a dispensing or professional fee; and”
Legislative intent was to prohibit the PBMs from just renaming MAC to something else. MAC is not an industry term we are talking about MAC as defined by KY law. If it is a reimbursement for a generic drug the law applies. (FILE MAC APPEAL First)

2. KRS 304.9-440 (reasons to Revoke or Suspend License)
a. Violating any insurance laws or violating any administrative regulation
b. Using fraudulent, coercive, or dishonest practices or demonstrating incompetence, untrustworthiness or financial irresponsibility or being a source of injury or loss to the public in conduct in this state or elsewhere (NO MAC APPEAL required)

a. (a) Identify to contracted pharmacies the sources used by PBM to calculate drug product reimbursement
b. (b)Establish a process for appeals
i. 60 days to appeal following initial claim
ii. Denied appeal identify NDC of a drug product and source
c. Granted appeals (are they notifying all contracted pharmacies?)
d. Are they making the change in the MAC in cases of granted appeals?
e. Allow appealing pharmacy and other contracted pharmacies to reverse and resubmit claim
f. Make retroactive payments in next payment cycle

4. Reimbursements:
a. Are they reimbursing you using a B rated drug when an A rated drug was dispensed
b. Are you being reimbursed below NADAC because they are using drugs that are temporarily unavailable, obsolete or on a drug shortage list to calculated?

a. Any Willing Provider: KRS 304.17A-270 can’t discriminate against any health care provider willing to meet the terms and conditions of the contract
b. KRS 304.17A-578 Substantial contract changes must be sent 90 days in advance and in an orange envelope. “material change” means anything that impacts, reimbursement, has a significant administrative burden, or changes the contract or provider network.
c. Audit law KRS 304-17A-741

Directions to file a complaint with the Kentucky Department of Insurance:
1. Visit the website at
2. Complete the required information
3. Follow directions to submit the form.
4. If you have questions and concerns, contact KPhA for assistance.