Review of California's Invoicing of Rebates for Medicaid Compound Drug Expenditures'Manual Claims

The California Department of Health Care Services' (State agency) $15.5 million of manually processed hardcopy claims for Medicaid compound drug expenditures for fiscal years'2004 and 2005 did not comply with Federal requirements related to invoicing manufacturers for rebates. Based on our sample results, we estimated that the State agency failed to invoice manufacturers for and collect approximately $2.1 million ($1.1 million'Federal share) in rebates for eligible compound drug ingredients.