Missouri owes the U.S. Centers for Medicare and Medicaid Services $48 million that would have been paid by drug manufacturers if the state had submitted the necessary claims, according to a government watchdog.
However, state officials disagree that any money must be repaid to the federal government, the Department of Health and Human Services inspector general said.
Under the Deficit Reduction Act of 2005, certain Medicaid drugs, identified by specific codes, must be paid by pharmaceutical manufacturers to states, which must then use a portion of such rebates in place of reimbursement from CMS.
Because Missouri didn’t submit claims to manufacturers, CMS reimbursed $48 million that should have come from rebates.
Only $24.5 million of the $72.6 million — or about one-third — of the drug claims the inspector general reviewed was properly charged.
Since the audit only covered claims from 2009 through 2011, Missouri could still owe more. money to the federal government.
Missouri officials argued they already had an effective process to receive the rebates and that additional steps would burden providers who submit the codes. They asked the inspector general to retract the recommendation to repay the federal government.
“Missouri hospitals encountered significant administrative and financial barriers in attempting to comply with the … requirements,” state officials told investigators.
In fact, the state requested CMS to delay the requirement to use on rebates in 2008. CMS granted only a six-month waiver and said the state had “sufficient time” to comply with the law.
“In fact, the waiver expired more than 6 years ago,” but Missouri still doesn’t ensure that the drug codes for rebates are submitted, the inspector general said. Investigators also reported that other states comply with the requirements.
The bills for the $48 million in rebates weren’t submitted to manufacturers because providers didn’t send the drug codes to the state. The error wasn’t caught because Missouri doesn’t have a system that rejects claims submitted without the codes.
