Indiana Claimed Unallowable Federal Reimbursement for Some Medicaid Physician-Administered Drugs

Indiana did not always comply with Federal Medicaid requirements for invoicing manufacturers for rebates for physician-administered drugs. Indiana did not invoice manufacturers for rebates associated with $710,420 (Federal share) in physician-administered drugs. Of this amount, $695,070 was for single-source drugs, and $15,350 was for top-20 multiple-source drugs. Because Indiana's internal controls did not always ensure that it invoiced manufacturers to secure rebates, Indiana improperly claimed Federal reimbursement for these single-source drugs and top-20 multiple-source drugs.

Further, Indiana did not submit the drug utilization data necessary to secure rebates for other physician-administered drugs totaling $142,339 (Federal share). Of this amount, $135,661 was for claims that did not have NDCs and $6,678 was for claims that contained NDCs.

We recommended that Indiana refund $710,420 and work with CMS to determine the proper resolution of the $142,339 for the other drug claims in question. We also made procedural recommendations. Indiana partially agreed with our first three recommendations, agreed with our other two recommendations, and described corrective actions that it had taken or planned to take.