State Medicaid Programs May Be Leaving Drug Rebates on the Table

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.

The 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.

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Source: The National Law Review