The estimate included $125.5 million for states and $515.7 million for the federal government.
Forty states and the federal government lost out on $641 million in 2020 because the states' separate Children's Health Insurance Programs were not required to seek rebates from drug makers, a federal data brief shows.
Federal law requires states to use the Medicaid Drug Rebate Program (MDRP) to get rebates for Medicaid-covered outpatient prescription drugs provided through Medicaid or Medicaid expansion. However, that rebate mandate does not apply for separate Children's Health Insurance Program (CHIP) drugs.
Currently, 40 states have separate CHIPs, either combined with Medicaid expansion or standing alone.
Using estimates by state agencies, the data brief by the Department of Health and Human Services' Office of the Inspector General sought to identify drug rebates that states could have collected if their separate CHIPs had been mandated to get MDRP rebates.
"If federal law were to require states to obtain rebates under the MDRP for separate CHIP drugs, the 40 states that operated separate CHIPs could, according to our estimates, have invoiced, collected, and directly received $641.2 million from the drug manufacturers for calendar year 2020," OIG reports.
The estimate includes $125.5 million for states and $515.7 million for the federal government.
The data brief contains no recommendations. CMS was not obligated to respond, and did not.
“If federal law were to require states to obtain rebates under the MDRP for separate CHIP drugs, the 40 States that operated separate CHIPs could have ... received $641.2 million from the drug manufacturers for calendar year 2020.”
HHS OIG
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.
KEY TAKEAWAYS
Federal law requires states to use the Medicaid Drug Rebate Program for Medicaid-covered outpatient prescription drugs.
However, that rebate mandate does not apply for separate Children's Health Insurance Program drugs.