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Significant changes in Medicare reimbursement for outpatient oncology services were proposed as part of the Medicare Modernization Act of 2003. The purpose of this study was to identify the “true cost” associated with drug-related handling for the preparation and delivery of chemotherapy doses to estimate the impact of changing reimbursement schema by Medicare. Two academic medical outpatient infusion centers and 2 community cancer centers provided data used to estimate all costs (excluding drug cost) associated with the preparation of chemotherapy doses. The data included both fixed costs (drug storage, space, equipment, and information resources) and variable costs (insurance management, inventory, waste management, pharmacy staff payroll, supplies, and shipping). The average cost for the preparation of chemotherapy doses across all sites was $34.27 (range, $32.08–$41.23). A time-and-motion study was also performed to determine what tasks were conducted by pharmacy staff and how much time was spent in the preparation of the top 15 chemotherapeutic drugs and regimens used in the 4 sites. Data from the 4 centers was projected to show that if 3,990,495 million chemotherapy infusions were administered to a national Medicare population in 2003, when multiplied by the average cost of preparation for infusions determined by the current study ($34.27), the estimated total annual cost to Medicare for chemotherapy preparation by pharmacists is $136,754,263.65. The pharmacists spent most of their days (90% or more) performing tasks directly related to the preparation of these agents. These data provide scientific support for the consideration of appropriate reimbursement for chemotherapy services provided by pharmacists to Medicare beneficiaries.