OIG: Colorado received $6.5M in Medicaid overpayments

The Colorado Department of Health Care Policy and Financing failed to comply with Medicaid requirements when invoicing manufacturers for rebates for physician-administered drugs during the period of Jan. 1, 2010, through Dec. 31, 2012, according to a report from HHS' Office of Inspector General.

In total, the state agency falsly claimed $6.5 million in Medicaid payments over these three years, according to the OIG.

"Because the state agency's internal controls did not always ensure that it invoiced manufacturers to secure rebates, the state agency improperly claimed federal reimbursement for these single-source drugs and top-20 multiple-source drugs," the OIG said.

Additionally, the OIG said, the Colorado Department of Health Care Policy failed to submit the utilization data necessary to secure rebates for all other physician-administered drugs. The state agency generally collected the drug utilization data necessary to invoice the manufacturers for rebates associated with these claims, but providers submitted claims totaling $2.6 million ($1.3 million federal share) that did not have National Drug Codes, according to the OIG.

"We were unable to determine whether the state agency was required to invoice for rebates for these other physician-administered drug claims that did not have NDCs in the utilization data. Furthermore, under the Medicaid drug rebate program, claims totaling $635,000 ($317,000 federal share), which contained NDCs, could have been eligible for rebates," the OIG concluded.

Based on its findings, the OIG recommended the Colorado Department of Health Care Policy refund the $6.5 million for the Medicaid physician-administered drugs that were ineligible for federal reimbursement, among other recommendations.

In written comments, the Colorado Department of Health Care Policy agreed with some, but not all of the OIG's recommendations and described corrective actions it planned to take.


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