The bill adds two provisions to the Health‑General Article that require the Maryland Department of Health to run an in‑state cost‑of‑dispensing survey at least once every three years starting in 2026, and to issue regulations establishing a fee‑for‑service professional dispensing fee within six months after each survey is completed. The fee the Department must establish is to be based on the survey results.
This is a procedural but potentially consequential change to how Maryland sets Medicaid dispensing payments. It creates a recurring, statutory mechanism for gathering cost data and converts that data into rulemaking authority to set a per‑dispense professional fee for Medicaid fee‑for‑service payments—an outcome that could alter reimbursements for community pharmacies and affect state Medicaid spending and pharmacy access.
At a Glance
What It Does
The bill requires the state to perform an in‑state cost‑of‑dispensing survey at least once every three years beginning in 2026, and then to adopt regulations establishing a fee‑for‑service professional dispensing fee within six months after the survey’s completion. The regulation must use the survey results as the basis for the fee.
Who It Affects
The requirement directly affects pharmacies and pharmacists who dispense drugs reimbursed by Maryland’s Medical Assistance Program (fee‑for‑service channel in particular), the Department of Health (which must run the survey and promulgate rules), and state budget officials responsible for Medicaid spending. It will also matter to pharmacy trade groups and compliance officers preparing for data collection and reimbursement changes.
Why It Matters
The bill creates a formal, recurring evidence base for setting dispensing fees instead of ad hoc or politically driven adjustments. That shifts reimbursement negotiations and budget planning: higher negotiated fees become more defensible if grounded in survey data, while budget holders face a recurring trigger for potential rate increases.
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What This Bill Actually Does
The bill adds two short, targeted provisions to Maryland law. One requires the Department of Health to conduct an in‑state cost‑of‑dispensing survey at least every three years, with the schedule starting in 2026.
The other requires the Department to adopt regulations establishing a fee‑for‑service professional dispensing fee within six months after each survey finishes; the regulations must be based on the survey findings.
By tying fee‑setting to a recurring survey, the law shifts the basis for the professional dispensing fee away from discretionary or one‑off adjustments and toward periodic empirical measurement. The statute does not prescribe how the Department must design the survey, which cost categories to include, or whether the fee will vary by dispensing setting (retail, long‑term care, specialty) or by prescription type; it simply mandates the survey and a subsequent rulemaking timeline.Practically, the Department will need to stand up the survey process, decide on sampling and reporting requirements, collect data from pharmacies or third parties, analyze cost components (staff time, overhead, supplies), and translate that analysis into a per‑dispense fee via formal regulations.
That regulatory step will follow the Administrative Procedure Act’s notice and comment processes unless the Department pursues emergency regulations. The initiative applies to Medicaid fee‑for‑service payments; the bill does not amend managed‑care contracts directly, though plan reimbursement practices could be influenced by the newly published fee schedule.Operational implications include new data collection demands on pharmacies (if they are required to cooperate), potential budgetary impacts if the resulting fee increases aggregate program costs, and legal or stakeholder scrutiny over survey methodology and fairness.
The bill takes effect October 1, 2026, so the Department must align its survey and rulemaking calendar with that date and the six‑month regulatory window after completing the first survey.
The Five Things You Need to Know
The bill adds two sections to the Health‑General Article: §15‑107.1 (survey cadence) and §15‑118.2 (regulations to set the fee).
It mandates an in‑state cost‑of‑dispensing survey at least once every three years, with the requirement beginning in 2026.
Within six months after a survey is completed, the Department of Health must adopt regulations establishing a fee‑for‑service professional dispensing fee that is based on the survey results.
The mandate applies to the Maryland Medical Assistance Program’s fee‑for‑service dispensing fee; the text does not change managed‑care reimbursement language.
The bill becomes effective October 1, 2026, creating a tight timeline for the Department to complete an initial survey and issue regulations under the six‑month rulemaking requirement.
Section-by-Section Breakdown
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Regular in‑state cost‑of‑dispensing survey
This new provision requires the Department to run the in‑state cost‑of‑dispensing survey at least every three years, beginning in 2026. The statutory language fixes the survey cadence but leaves methodological choices—sample, cost categories, provider reporting obligations—to the Department, which means the practical content and burden of the survey will be determined in guidance or procurement documents rather than the statute.
Rulemaking requirement to set fee‑for‑service dispensing fee
This section instructs the Department to adopt regulations establishing a fee‑for‑service professional dispensing fee within six months after the survey’s completion and requires the Department to base those regulations on the survey results. The provision imposes a concrete timeline for administrative action but grants the agency discretion over how to translate survey findings into a per‑dispense fee structure.
Statutory implementation timing
The bill takes effect on October 1, 2026, which frames the Department’s calendar for the initial survey and regulatory work. The additions are placed in the Health‑General Article among existing Medical Assistance Program provisions, signaling that the new fee will operate within Maryland’s Medicaid regulatory architecture rather than as a separate grant or pilot.
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Explore Healthcare in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Independent and community pharmacies: The survey creates a data‑driven path for establishing a professional dispensing fee that could raise per‑prescription payments to better reflect actual labor and overhead costs, supporting financial sustainability for smaller dispensers.
- Pharmacists and pharmacy staff: If the survey captures labor costs accurately, the resulting fee can recognize and reimburse pharmacist professional services and dispensing time more explicitly than commodity‑focused reimbursement.
- State policymakers and rate‑setting officials: Regular, legislatively mandated cost data reduces reliance on ad hoc estimates and gives administrators an empirical basis for defending rate changes to stakeholders and budget reviewers.
Who Bears the Cost
- Maryland Medical Assistance Program (state Medicaid budget): Higher, empirically based dispensing fees would increase per‑prescription costs and could raise total program spending unless offset by other rate reductions or budget adjustments.
- Department of Health operations: The Department must design, procure (if needed), run the survey, analyze results, and complete rulemaking within a tight six‑month window, adding administrative cost and staff time.
- Participating pharmacies: If the survey requires provider data submissions or on‑site verification, pharmacies will expend administrative time and resources collecting and reporting cost information, even if they ultimately benefit from higher fees.
Key Issues
The Core Tension
The central dilemma is between timely, evidence‑based updates to dispensing reimbursement—which protect pharmacy viability by reflecting current costs—and fiscal and administrative constraints that make frequent, high‑quality surveys and rapid rulemaking costly and contentious; the bill favors data‑driven rate setting but leaves open who will pay for and legitimize that data.
The statute fixes cadence and a six‑month regulatory deadline but omits key methodological details. It does not define what counts as a dispensing cost, whether the fee will differ by dispensing setting (retail vs long‑term care vs specialty), how sample representativeness will be ensured, or whether participation is mandatory.
Those gaps leave the Department with substantial discretion, which improves agility but increases the risk of stakeholder dispute over methodology and results.
The six‑month requirement to promulgate regulations after a survey completes presents practical friction with thorough survey design, stakeholder engagement, and the Administrative Procedure Act’s notice periods. Rapid rulemaking could push the Department toward narrower methodologies or emergency regulations, raising questions about legal defensibility and stakeholder buy‑in.
Finally, the bill ties the fee only to fee‑for‑service Medicaid; it therefore risks creating divergence between fee‑for‑service and managed‑care reimbursement approaches, which could complicate pharmacy contracting and access if plans respond differently to the published fee.
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