Pharmacists for Fair Reimbursement What your state's PBM laws actually mean for community pharmacies
State Tracker Updated June 15, 2026

Tennessee: what the PBM reimbursement law requires

Tennessee bars PBMs from reimbursing a pharmacy below its documented actual acquisition cost for a drug, requires a separate professional dispensing fee at least equal to the state Medicaid (TennCare) rate for low-volume pharmacies, and prohibits spread pricing. Pharmacies may appeal a below-cost payment within 7 business days.

Status Enacted
Law Tenn. Code Ann. § 56-7-3206 (Public Chapter 569 of 2021; Public Chapter 1070 of 2022)
Effective date Below-cost reimbursement and appeal provisions effective January 1, 2023
Reimbursement basis No reimbursement below the pharmacy's documented actual acquisition cost; spread pricing prohibited
Professional dispensing fee A professional dispensing fee at least equal to the TennCare rate for qualifying low-volume pharmacies, separate from the drug cost
Appeal route Pharmacy has 7 business days to appeal a below-cost payment; PBM must resolve within 7 business days; a denied appeal can be escalated to the state (TDCI) within 30 days

Tennessee uses an actual-cost floor rather than a NADAC formula. Under Tenn. Code Ann. § 56-7-3206, a PBM may not reimburse a pharmacy less than its documented actual acquisition cost for the drug, may not fold the dispensing fee into that cost, and may not engage in spread pricing.

For lower-volume pharmacies, the PBM must pay a professional dispensing fee at least equal to the state Medicaid (TennCare) rate, separate from the drug cost. A pharmacy has 7 business days to appeal a below-cost payment, the PBM must resolve it within 7 business days, and a denied internal appeal can be escalated to the Department of Commerce and Insurance within 30 days.

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