North Dakota Correctly Claimed Federal Reimbursement for Most Medicaid Physician-Administered Drugs

Although the North Dakota Department of Human Services (State agency) generally complied with Federal Medicaid requirements for invoicing manufacturers for rebates for physician-administered drugs, it claimed unallowable Federal reimbursement for some of these drugs. The State agency did not invoice manufacturers for rebates associated with $138,000 ($79,000 Federal share) in physician-administered drugs. Of this amount, $137,000 ($78,000 Federal share) was for single-source drugs, and $1,000 ($700 Federal share) was for top-20 multiple-source drugs. Because the State agency's internal controls did not always ensure that it invoiced manufacturers to secure rebates, the State agency improperly claimed Federal reimbursement for these single-source drugs and top-20 multiple-source drugs.

Further, the State agency did not submit the utilization data necessary to secure rebates for all other physician-administered drugs. The State agency collected the drug utilization data necessary to invoice the manufacturers for rebates associated with these claims, but it did not invoice the manufacturers for rebates for these other physician-administered drugs. Under the Medicaid drug rebate program, claims totaling $521,000 ($303,000 Federal share) that were associated with these other physician-administered drugs could have been eligible for rebates.