Kansas Correctly Invoiced Rebates to Manufacturers for Most Physician-Administered Drugs Dispensed to Enrollees of Medicaid Managed-Care Organizations

Although the Kansas Department of Health and Environment, Division of Health Care Finance (State agency) generally complied with Federal Medicaid requirements for invoicing manufacturers for rebates for physician-administered drugs dispensed to enrollees of Medicaid managed-care organizations (MCOs), it did not invoice all rebate-eligible physician-administered drugs dispensed to enrollees of MCOs. Specifically, the State agency did not invoice manufacturers for rebates totaling $63,000 ($36,000 Federal share). These errors occurred because the State agency's internal controls did not always ensure that it invoiced manufacturers to collect rebates.

We recommended that the State agency refund to the Federal Government $36,000 (Federal share) for rebates for physician-administered drugs dispensed to enrollees of MCOs that were not invoiced to manufacturers and strengthen its internal controls to ensure that all physician-administered drugs dispensed to enrollees of MCOs and eligible for rebates are invoiced. The State agency concurred with all of our recommendations and described corrective actions that it had taken or planned to take.