Delaware Did Not Bill Manufacturers for Some Rebates for Physician-Administered Drugs Dispensed to Enrollees of Medicaid Managed-Care Organizations

For the period January 1 through December 31, 2013, the Delaware Department of Health and Social Services, Division of Medicaid and Medical Assistance (State agency) did not fully comply with Federal Medicaid requirements for billing manufacturers for some rebates for physician-administered drugs dispensed to enrollees of managed-care organizations (MCOs). The State agency properly billed for most rebates for MCO drug utilization in our judgmental sample. However, the State agency did not have valid National Drug Codes (NDCs) for other drug utilization data submitted by MCOs for physician-administered drugs, and the State agency did not bill manufacturers for rebates for these drugs. We estimate that the State agency did not bill manufacturers for rebates totaling $230,000 ($127,000 Federal share). We did not have enough information to determine an estimate for some of the utilization.

The State agency did not bill manufacturers for rebates for this utilization because the MCOs submitted this utilization data to the State without valid NDC information. Although the State required MCOs to submit valid NDCs for all physician-administered drug utilization, the State agency did not ensure that MCOs submitted utilization with valid NDC information. Therefore, the State did not obtain rebates for this utilization.

We recommended that the State agency (1) work with the Centers for Medicare & Medicaid Services to resolve the drug utilization data without valid NDCs by determining the correct NDCs, billing manufacturers for the estimated $230,000 in rebates, and refunding the Federal share of rebates collected; (2) work with the Centers for Medicare & Medicaid Services to resolve the drug utilization without valid NDCs for which we were not able to determine an estimate by determining the correct NDCs and rebates due, billing manufacturers for the rebates, and refunding the Federal share of rebates collected; and (3) ensure that MCOs submit drug utilization data containing NDCs for all physician-administered drugs.