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

Why OIG Did This Audit

• For a covered outpatient drug to be eligible for Federal reimbursement under the Medicaid program’s drug rebate requirements, manufacturers must pay rebates to the States for the drugs.
• Prior OIG audits found that States did not always invoice and collect all rebates due for drugs administered to Medicaid managed-care organization (MCO) enrollees.
• This audit, one of a series, determined whether Pennsylvania complied with Federal Medicaid requirements for invoicing manufacturers for rebates for physician-administered drugs dispensed to MCO enrollees.

What OIG Found

• Pennsylvania generally complied with applicable Federal Medicaid requirements but did not invoice all rebate eligible physician-administered drugs dispensed to MCO enrollees.
• Specifically, Pennsylvania did not invoice for rebates totaling $488,051 ($284,617 Federal share):

What OIG Recommends

We made three recommendations to Pennsylvania, including that Pennsylvania invoice for and collect from manufacturers rebates totaling $488,051 ($284,617 Federal share) for single-source and top-20 multiple-source physician-administered drugs and refund the Federal share of rebates collected. The full recommendations are in the report.

Pennsylvania agreed with all three recommendations.