Performance Improvement 2009. What Accounts for Improper Medicaid Rebate Payments?


This study estimated inappropriate Medicaid rebate claims caused by unit of measure inconsistencies and determined how often States converted their Medicaid use data to correct for unit of measure inconsistencies. Prescription drugs are defined using two types of unit of measure standards. Inconsistencies between the two standards have potential financial implications for Medicaid rebates.

Reviewers estimated that unit of measure inconsistencies resulted in $11.8 million in inappropriately claimed Medicaid rebates during the first 6 months of 2006. Most inconsistencies involved the unit type “ each” (for example pricing for “ each” pill). On average, States converted 45 percent of their use data for drugs with unit of measure inconsistencies; and that States could not use package size data from the agency to efficiently detect or correct for unit of measure inconsistencies. Reviewers recognized that inappropriate Medicaid rebate claims caused by unit of measure inconsistencies represented less than 1 percent of rebate claims. However, as the analysis of the National Council for Prescription Drug Programs and the agency data showed, unit of measure inconsistencies remained a problem within the Medicaid prescription drug program. The agency made efforts to prevent and correct these inconsistencies.

Report Title: Unit of Measure Inconsistencies in the Medicaid Prescription Drug Program
Agency Sponsor: OS-OIG, Office of Inspector General
Federal Contact: Erin Lemire, 202-205-9523
Performer: Staff; Office of Inspector General
PIC ID: 8994

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