State Medicaid Programs May Be Leaving Revenue From Drug Rebates on the table

March 03 01:00 2015 by ushadmin

The recent release of a New York State Office of the State Comptroller audit report serves as an example of state Medicaid programs that may not be maximizing their collection of revenue from drug rebates for Medicaid managed care enrollees. This report indicated that the New York Medicaid program did not collect as much as $119.3 million in drug rebates due to managed care organizations’ (MCOs’) failure to resubmit nearly one million rejected encounter claims between October 1, 2011 and June 30, 2014.

Health CareThe DOH administers the New York Medicaid program and pays the MCOs a per enrollee monthly amount for Medicaid recipients who are enrolled in MCOs. Encounter claims, which are not tied to payment, allow the Medicaid agency to track services received by members enrolled in managed care. The New York Medicaid claims processing system (eMedNY) has edits to reject MCO encounter claims that contain incomplete information or are erroneous, including missing National Drug Codes (NDCs). The MCO is then expected to correct and resubmit encounter claims for reprocessing. The DOH uses NDC information from encounter claims to identify drugs that are eligible for rebate, and the claims processing system is only able to extract NDC information from the encounter claim if the claim contains accurate information for the required data elements (i.e., NDC code, valid referring provider ID number, etc.).

The New York State Comptroller took the position that the failure to fully collect rebates was the result of issues associated with the New York Medicaid claims processing system, including ineffective policies and processes, lack of proper monitoring controls and risk assessments to ensure rejected encounter claims were successfully resubmitted and failure to seek rebates on drug encounter claims from all categories of Medicaid services…