Seventh Circuit Upholds Arkansas PBM Dispensing Fee Rule Against ERISA Preemption Challenge
The Seventh Circuit Court of Appeals ruled Wednesday that Arkansas may enforce its 2024 regulation requiring pharmacy benefit managers to include dispensing fees in pharmacy reimbursements, rejecting a challenge that federal ERISA law preempts the state rule. The regulation authorizes Arkansas to impose additional fees when the state insurance commissioner determines current reimbursements are not fair and reasonable, and mandates health plans report data on pharmacy reimbursement relative to Medicaid pricing. The ruling is effective immediately. The decision matters for Medicaid managed care organizations and their PBM vendors operating in Arkansas, as it affirms state authority to set minimum pharmacy reimbursement standards including dispensing fees and requires plans to report pharmacy payment data benchmarked against Medicaid rates.
Medicaid managed care plans in Arkansas must ensure their PBM contracts comply with state-mandated dispensing fee requirements and new reporting obligations tied to Medicaid pricing benchmarks, with potential financial liability if the state deems reimbursements inadequate.
Pharmacy · Managed Care
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