This document provides an overview of the Medicaid Drug Rebate Program and the 340B Drug Pricing Program. It describes the key requirements and processes of the programs, including how manufacturer reporting, pricing calculations, rebate calculations, and penalties work. The document also outlines important dates and timelines associated with both programs.

1. Developing a Medicaid Rebate Processing
Strategy for your Organization
Christopher C. BiddleAll programs and calculations which are detailed within this presentation
Have been directly derived from CMS guidelines

2. Medicaid Drug Rebate Program (MDRP):Medicaid Drug Rebate Program (MDRP):
BackgroundBackground
• Program was sponsored by David Pryor (D-AR)Program was sponsored by David Pryor (D-AR)
• Program was enacted on November 5, under SectionProgram was enacted on November 5, under Section
4401 of the Omnibus Reconciliation Act (OBRA) of 19904401 of the Omnibus Reconciliation Act (OBRA) of 1990
• Program was effective January 1, 1991Program was effective January 1, 1991
• Program is administered at the federal level by theProgram is administered at the federal level by the
Centers for Medicare and Medicaid Services (CMS)Centers for Medicare and Medicaid Services (CMS)

3. Medicaid Drug Rebate Program:Medicaid Drug Rebate Program:
RequirementsRequirements
• Manufacturers must provide rebates to statesManufacturers must provide rebates to states
on a quarterly basis for products dispensed byon a quarterly basis for products dispensed by
prescription to Medicaid patientsprescription to Medicaid patients
• Manufacturers must give the federalManufacturers must give the federal
government unrestricted audit accessgovernment unrestricted audit access
• Manufacturers must pay significant monetaryManufacturers must pay significant monetary
penalties for any late, incomplete or “knowingly”penalties for any late, incomplete or “knowingly”
false pricing submissionsfalse pricing submissions

4. Medicaid Drug Rebate Program:Medicaid Drug Rebate Program:
AmendmentsAmendments
Veterans Health Care Act of 1992Veterans Health Care Act of 1992
 Requires pricing agreement with PHS & VARequires pricing agreement with PHS & VA
(in order to participate in MDRP)(in order to participate in MDRP)
 Prevents double discountsPrevents double discounts
 Changes rebate percentageChanges rebate percentage
 Excludes prices charged to certain entities fromExcludes prices charged to certain entities from
Best Price (BP)Best Price (BP)
OBRA 1993OBRA 1993
 Changes parameters for calculating rebates forChanges parameters for calculating rebates for
products approved by FDA after 10/1/90products approved by FDA after 10/1/90

6. Medicaid Drug Rebate Program:Medicaid Drug Rebate Program:
Reporting RequirementsReporting Requirements
• ManufacturersManufacturers mustmust report Baseline Data for all eligiblereport Baseline Data for all eligible
NDCs within 30 days of end of quarter in which rebateNDCs within 30 days of end of quarter in which rebate
agreement signedagreement signed
• ManufacturersManufacturers mustmust report Average Manufacturer Pricereport Average Manufacturer Price
(AMP) and Best Price (BP, for S and I drugs only) to CMS(AMP) and Best Price (BP, for S and I drugs only) to CMS
within 30 days after the end of each quarter for all coveredwithin 30 days after the end of each quarter for all covered
NDCsNDCs
• ManufacturersManufacturers mustmust report Baseline and AMP/BP data forreport Baseline and AMP/BP data for
all new products as well as pricing adjustments for priorall new products as well as pricing adjustments for prior
quarters with quarterly submissionsquarters with quarterly submissions

7. Medicaid Drug Rebate Program:Medicaid Drug Rebate Program:
Baseline DataBaseline Data
•NDC NumberNDC Number •Product NameProduct Name
•Units PerUnits Per
Package SizePackage Size
(UPPS)(UPPS)
•TherapeuticTherapeutic
Equivalency CodeEquivalency Code
•Unit TypeUnit Type •DESI IndicatorDESI Indicator
•Drug CategoryDrug Category •FDA ApprovalFDA Approval
DateDate
•Date EnteredDate Entered
MarketMarket
•Drug TypeDrug Type
•Correction FlagCorrection Flag •Termination DateTermination Date

8. Medicaid Drug Rebate Program:Medicaid Drug Rebate Program:
AMP/BP DefinitionsAMP/BP Definitions
• AMPAMP –– “average unit price charged to wholesalers or“average unit price charged to wholesalers or
distributors for sale to the retail class of trade.distributors for sale to the retail class of trade.
Manufacturer must apply cash discounts and all otherManufacturer must apply cash discounts and all other
price reductions which reduce the ‘actual’ price paid”price reductions which reduce the ‘actual’ price paid”
• BPBP –– “lowest effective price the manufacturer sells the“lowest effective price the manufacturer sells the
covered outpatient Single Source or Innovator Multi-covered outpatient Single Source or Innovator Multi-
source drug to any purchaser, including wholesalers,source drug to any purchaser, including wholesalers,
retailers, providers, HMOs, non-profit agencies and stateretailers, providers, HMOs, non-profit agencies and state
government agencies”government agencies”

9. Medicaid Drug Rebate Program:Medicaid Drug Rebate Program:
AMP ExclusionsAMP Exclusions
(page P1 of CMS guide)(page P1 of CMS guide)
The AMP calculation excludes:The AMP calculation excludes:
 Direct sales to hospitalsDirect sales to hospitals
 Direct sales to HMOsDirect sales to HMOs
 Direct sales to wholesalers where the drugDirect sales to wholesalers where the drug
is relabeled under the distributor’s NDCis relabeled under the distributor’s NDC
 Federal Supply Schedule pricesFederal Supply Schedule prices

10. Medicaid Drug Rebate Program:Medicaid Drug Rebate Program:
BP ExclusionsBP Exclusions
(page P2 of CMS guide)(page P2 of CMS guide)
Best Price excludes prices charged to:Best Price excludes prices charged to:
 The Indian Health Service (IHS)The Indian Health Service (IHS)
 The Department of Veterans Affairs (VA)The Department of Veterans Affairs (VA)
 State homes receiving funds under section 1741State homes receiving funds under section 1741
of title 38, United States codeof title 38, United States code
 The Department of Defense (DOD)The Department of Defense (DOD)
 The Public Health Service (PHS) or any entitiesThe Public Health Service (PHS) or any entities
described in section 340B(a)(4) of the PHS Actdescribed in section 340B(a)(4) of the PHS Act
 The Federal Supply ScheduleThe Federal Supply Schedule
 State pharmaceutical assistance programsState pharmaceutical assistance programs
 Nominal Sales (prices < 10% of AMP)Nominal Sales (prices < 10% of AMP)

11. Medicaid Drug Rebate Program:Medicaid Drug Rebate Program:
Rebate CalculationRebate Calculation
• For N drugsFor N drugs, Unit Rebate Amount (URA) = 11% of AMP, Unit Rebate Amount (URA) = 11% of AMP
• For S or I drugsFor S or I drugs, URA = Basic Rebate + Additional, URA = Basic Rebate + Additional
RebateRebate
 Basic Rebate = the greater of 15.1% of AMPBasic Rebate = the greater of 15.1% of AMP oror AMP –AMP –
BPBP
 Additional Rebate (CPI-U “creep” calculation) = InflationAdditional Rebate (CPI-U “creep” calculation) = Inflation
“adjustment” used if the product’s price increase has“adjustment” used if the product’s price increase has
exceeded the rate of inflation, measured against theexceeded the rate of inflation, measured against the
Consumer Price Index (CPI-U)Consumer Price Index (CPI-U)

12. Medicaid Drug Rebate Program:Medicaid Drug Rebate Program:
CPI-U “Creep” CalculationCPI-U “Creep” Calculation
• ““Creep” calculation is designed to compensate for aCreep” calculation is designed to compensate for a
rise in product price that outpaces inflationrise in product price that outpaces inflation
• Value of additional rebate depends on how baselineValue of additional rebate depends on how baseline
(BL) values used in calculation are defined, which has(BL) values used in calculation are defined, which has
changed throughout the history of the MDRPchanged throughout the history of the MDRP
• Additional Rebate =Additional Rebate =
Current AMP – ((BL AMP/BL CPI-U)*Current CPI-U)Current AMP – ((BL AMP/BL CPI-U)*Current CPI-U)

13. Medicaid Drug Rebate Program:Medicaid Drug Rebate Program:
URA Baseline ValuesURA Baseline Values
Rebate Quarter Market Date Baseline AMP Baseline CPI-U
4Q1993 -
present
Greater than
9/30/93
AMP for 1st
Qtr.
After Market Date
CPI-U for month
prior to 1st
Qtr.
after Market Date
4Q1993 -
present
Greater than
9/30/90; less than
10/1/93
AMP for 1st
Qtr.
After Market Date
CPI-U for month
prior to 1st
Qtr.
after Market Date
1Q1991 -
3Q1993
Greater than
9/30/90; less than
10/1/93
AMP for 1st
day of
1st
full month on the
market
CPI-U for the
month before 1st
full month
1Q1991 -
present
Equal or less
than 09/30/90
3Q1990 AMP
132.7 (value for
9/90)

14. URA Calculation Example (S or I Drug):URA Calculation Example (S or I Drug):
Basic URABasic URA:: 0.357911 * 15.1% = 0.0540450.357911 * 15.1% = 0.054045
0.357911 – 0.299563 (BP) =0.357911 – 0.299563 (BP) = 0.0583480.058348
Additional URAAdditional URA::
0.244795/153.5 = 0.0015950.244795/153.5 = 0.001595
0.001595*174.00 = 0.2774870.001595*174.00 = 0.277487
0.357911 – 0.277487 = 0.080424 (additional URA)0.357911 – 0.277487 = 0.080424 (additional URA)
Total URATotal URA = 0.058348 + 0.080424 == 0.058348 + 0.080424 = 0.1388000.138800
BaselineBaseline
AMPAMP
BaselineBaseline
CPI-UCPI-U
CurrentCurrent
AMPAMP
QuarterlyQuarterly
CPI-UCPI-U
0.2447950.244795 153.5153.5 0.3579110.357911 174.00174.00

15. Medicaid Drug Rebate Program: ClaimsMedicaid Drug Rebate Program: Claims
• Program requires that manufacturers submit paymentProgram requires that manufacturers submit payment
to the states based on all undisputed invoice entriesto the states based on all undisputed invoice entries
within 30 days of receipt of invoice or 38 days fromwithin 30 days of receipt of invoice or 38 days from
invoice postmark dateinvoice postmark date
• Interest on rebate is payable to the state beginningInterest on rebate is payable to the state beginning
on the 38on the 38thth
day after the postmark dateday after the postmark date
• Interest is also due the state on disputed units ifInterest is also due the state on disputed units if
resolved in the state’s favor, if manufacturer does notresolved in the state’s favor, if manufacturer does not
pay resolved dispute within 38 days of notifying statepay resolved dispute within 38 days of notifying state
of disputeof dispute

16. Medicaid Drug Rebate Program: Key DatesMedicaid Drug Rebate Program: Key Dates
Termination Date for Covered DrugTermination Date for Covered Drug
 If product is pulled from shelf by FDA orIf product is pulled from shelf by FDA or
manufacturer, the termination date is the “removalmanufacturer, the termination date is the “removal
date” of the productdate” of the product
 If product is discontinued by manufacturer, theIf product is discontinued by manufacturer, the
termination date is last lot expiration datetermination date is last lot expiration date
Expiration Date for Covered DrugExpiration Date for Covered Drug
 1 year past Termination Date1 year past Termination Date
 The expiration date is the the date on which theThe expiration date is the the date on which the
product isproduct is no longerno longer eligible for a Medicaid Rebateeligible for a Medicaid Rebate

17. Medicaid Drug Rebate Program: ReportsMedicaid Drug Rebate Program: Reports
Reconciliation of State Invoice (ROSI)Reconciliation of State Invoice (ROSI)
 Used by manufacturers to explain adjusted rebateUsed by manufacturers to explain adjusted rebate
payments to states for thepayments to states for the current quarter onlycurrent quarter only
 Must accompany rebate payment within 38 days ofMust accompany rebate payment within 38 days of
postmark date on state’s current quarter invoicepostmark date on state’s current quarter invoice
Prior Quarter Adjustment Statement (PQAS)Prior Quarter Adjustment Statement (PQAS)
 Used by manufacturers to reconcile and explain priorUsed by manufacturers to reconcile and explain prior
quarter actions, payments or credits to statesquarter actions, payments or credits to states

18. Medicaid Drug Rebate Program: TimelineMedicaid Drug Rebate Program: Timeline
Manufacturer
submit pricing
and new
product
baseline
Information to
CMS for
previous
quarter
CMS: validates
manufacturers
data, calculates
URA and
generates data
for States
States
generate
invoices and
send to
manufacturers
States send
utilization
data to CMS
Manufactures must
submit rebates to
States within 38
days of postmark
date
Day 30 Day 45 Day 60 Day 90
End of
Quarter Day 90 + 38

19. Medicaid Drug Rebate Program:Medicaid Drug Rebate Program:
Fines and PenaltiesFines and Penalties
• $10,000 per$10,000 per dayday perper itemitem for failure to provide timelyfor failure to provide timely
AMP and BP reporting to CMSAMP and BP reporting to CMS
• $100,000 for$100,000 for eacheach itemitem of false information reportedof false information reported
to CMSto CMS
• $100,000 for$100,000 for eacheach itemitem if manufacturer refuses aif manufacturer refuses a
CMS “request for information”CMS “request for information”
• CMS may terminate the manufacturer’s rebateCMS may terminate the manufacturer’s rebate
agreement for failure to submit quarterly pricing data,agreement for failure to submit quarterly pricing data,
nonpayment of rebates or for other “good cause”nonpayment of rebates or for other “good cause”

20. PHS Drug Discount Program/340BPHS Drug Discount Program/340B
Program: BackgroundProgram: Background
• Genesis in rising prices for “non-Medicaid” federal &Genesis in rising prices for “non-Medicaid” federal &
state payors of drugs after MDRP was enactedstate payors of drugs after MDRP was enacted
• Program enacted under Section 602 of the VeteransProgram enacted under Section 602 of the Veterans
Health Care Act of 1992, Public Law No. 102-585 &Health Care Act of 1992, Public Law No. 102-585 &
Section 340B of the Public Health Service ActSection 340B of the Public Health Service Act
• Administered by the Office of Pharmacy Affairs (OPA)Administered by the Office of Pharmacy Affairs (OPA)

21. PHS Drug Discount Program/340BPHS Drug Discount Program/340B
Program:Program:
RequirementsRequirements
• Manufacturers cannot participate in the 340B ProgramManufacturers cannot participate in the 340B Program
unless their drugs are covered by the Medicaid Programunless their drugs are covered by the Medicaid Program
• Manufacturers agree to provide discounts on drugsManufacturers agree to provide discounts on drugs
purchased by PHS covered entitiespurchased by PHS covered entities
• Discount is calculated using MDRP formulaDiscount is calculated using MDRP formula
• Covered entities are free to negotiate discounts greaterCovered entities are free to negotiate discounts greater
than than the Medicaid rebate amountthan than the Medicaid rebate amount

22. PHS Drug Discount Program/340BPHS Drug Discount Program/340B
Program:Program:
PricingPricing
• Manufacturer sells at a discounted price to coveredManufacturer sells at a discounted price to covered
entities, rather than paying a rebate to statesentities, rather than paying a rebate to states
 For S & I drugs, price = (AMP - URA) * UPPSFor S & I drugs, price = (AMP - URA) * UPPS
 For N & OTC drugs, price = AMP - (11% * AMP)For N & OTC drugs, price = AMP - (11% * AMP)
• Prices calculated & reported quarterlyPrices calculated & reported quarterly
• Manufacturers responsible for verifying eligibility ofManufacturers responsible for verifying eligibility of
covered entities each quartercovered entities each quarter

23. PHS Drug Discount Program/340BPHS Drug Discount Program/340B
Program:Program:
Covered EntitiesCovered Entities
• Certain non-profit disproportionate shareCertain non-profit disproportionate share
hospitalshospitals owned by (or under contract with) state &owned by (or under contract with) state &
local governmentslocal governments
• Specified PHS GranteesSpecified PHS Grantees, such as:, such as:
 Certain Federally Qualified Health CentersCertain Federally Qualified Health Centers
 State operated AIDS drug assistance programsState operated AIDS drug assistance programs
 Tuberculosis, black lung, family planning,STD clinicsTuberculosis, black lung, family planning,STD clinics
 Hemophilia treatment centersHemophilia treatment centers
 Public housing primary care clinics & homelessPublic housing primary care clinics & homeless
clinicsclinics
 Urban Indian clinics & Native Hawaiian health centersUrban Indian clinics & Native Hawaiian health centers

24. PHS Drug Discount Program/340BPHS Drug Discount Program/340B
Program:Program:
Key FactsKey Facts
• Drugs purchased by a covered entity cannot be resold orDrugs purchased by a covered entity cannot be resold or
transferred, except to patients of the covered entitytransferred, except to patients of the covered entity
• Drugs purchased through the 340B Program are notDrugs purchased through the 340B Program are not
subject to a Medicaid rebate (prevents double discounts)subject to a Medicaid rebate (prevents double discounts)
• Covers outpatient prescriptions onlyCovers outpatient prescriptions only

25. Federal Supply Schedule (FSS):Federal Supply Schedule (FSS):
BackgroundBackground
• Schedule of contracts & prices for frequently usedSchedule of contracts & prices for frequently used
supplies & services available to federal governmentsupplies & services available to federal government
• Contracts for medical-related schedules awarded byContracts for medical-related schedules awarded by
Department of Veterans Affairs (VA)Department of Veterans Affairs (VA)
• Individual FSS prices set by negotiations betweenIndividual FSS prices set by negotiations between
manufacturer & VA (no statutory ceiling price)manufacturer & VA (no statutory ceiling price)
• Government wants “most favored customer price” (orGovernment wants “most favored customer price” (or
below)below)

26. Federal Supply Schedule (FSS):Federal Supply Schedule (FSS):
Industrial Funding Fee (IFF)Industrial Funding Fee (IFF)
• IFF = 0.5% fee on all FSS SalesIFF = 0.5% fee on all FSS Sales
• VA requires manufacturers to collect and remit theVA requires manufacturers to collect and remit the
IFF each quarterIFF each quarter
• Manufacturers must decide whetherManufacturers must decide whether to include theto include the
IFF in their pricing to government entitiesIFF in their pricing to government entities
purchasing on the FSSpurchasing on the FSS
• A report of sales data and payment is due within 60A report of sales data and payment is due within 60
days after the end of each quarterdays after the end of each quarter

27. Federal Supply Schedule (FSS):Federal Supply Schedule (FSS):
IFF Numerical ExampleIFF Numerical Example
• FSS Final Price = 9.01FSS Final Price = 9.01
IFF = 9.01 * 0.005 = 0.045IFF = 9.01 * 0.005 = 0.045
• FSS Final Price with IFF = 9.06FSS Final Price with IFF = 9.06
• The FSS Final Price with IFF is published in theThe FSS Final Price with IFF is published in the
FSS Price ListFSS Price List

28. Big 4 Federal Ceiling Prices (FCP):Big 4 Federal Ceiling Prices (FCP):
BackgroundBackground
• Like PHS, genesis in rising prices for “non-Medicaid”Like PHS, genesis in rising prices for “non-Medicaid”
federal & state payors of drugs after MDRP beganfederal & state payors of drugs after MDRP began
• Enacted under Section 603 of the Veterans HealthEnacted under Section 603 of the Veterans Health
Care Act of 1992, Public Law No. 102-585Care Act of 1992, Public Law No. 102-585
• Establishes separate drug discount program for 4Establishes separate drug discount program for 4
largest federal purchasers of drugs: VA, DOD, PHSlargest federal purchasers of drugs: VA, DOD, PHS
(including IHS) and Coast Guard(including IHS) and Coast Guard
• Places a ceiling price (federal ceiling price, or FCP)Places a ceiling price (federal ceiling price, or FCP)
on brand name (S or I) drugs purchased by the Big 4on brand name (S or I) drugs purchased by the Big 4

29. Big 4 Federal Ceiling Prices (FCP):Big 4 Federal Ceiling Prices (FCP):
RequirementsRequirements
• Manufacturer must enter into “master agreement” withManufacturer must enter into “master agreement” with
VA in order to be paid for drugs under Medicaid, theVA in order to be paid for drugs under Medicaid, the
340B Program or by the Big 4340B Program or by the Big 4
• ““Master agreement” requires aMaster agreement” requires a minimumminimum discount ofdiscount of
24% off nonfederal average manufacturer price24% off nonfederal average manufacturer price
(NFAMP) on brand name drugs sold to the Big 4(NFAMP) on brand name drugs sold to the Big 4
• Additional discount required if a drug’s price risesAdditional discount required if a drug’s price rises
faster than inflationfaster than inflation

30. Big 4 Federal Ceiling Prices (FCP):Big 4 Federal Ceiling Prices (FCP):
Dual PricingDual Pricing
• FCP discount formula is only available to the Big 4FCP discount formula is only available to the Big 4
• Other federal agencies must pay “normal” FSSOther federal agencies must pay “normal” FSS
pricesprices
• Manufacturers have the option of maintaining 1 orManufacturers have the option of maintaining 1 or
2 FSS schedules (of charging single or dual prices2 FSS schedules (of charging single or dual prices
to the Big 4 and other FSS purchasers for theto the Big 4 and other FSS purchasers for the
same covered drug)same covered drug)
• Under dual pricing, FSS prices are generally higherUnder dual pricing, FSS prices are generally higher
than FCP prices for the same drugthan FCP prices for the same drug

31. Big 4 Federal Ceiling Prices (FCP):Big 4 Federal Ceiling Prices (FCP):
NFAMPNFAMP
• NFAMP =NFAMP = The average price paid by wholesalers toThe average price paid by wholesalers to
manufacturers, including any cash discounts, similarmanufacturers, including any cash discounts, similar
price reductions and chargebacks paid on non-price reductions and chargebacks paid on non-
federal/non-nominal salesfederal/non-nominal sales
• Quarterly NFAMPQuarterly NFAMP reported to VA within 45 days afterreported to VA within 45 days after
the end of each quarterthe end of each quarter
• Annual NFAMPAnnual NFAMP reported to VA on November 15reported to VA on November 15thth
ofof
each yeareach year

32. Big 4 Federal Ceiling Prices (FCP):Big 4 Federal Ceiling Prices (FCP):
FCP CalculationFCP Calculation
• FCP = 0.76 * (Annual NFAMP)FCP = 0.76 * (Annual NFAMP) in the 1in the 1stst
year of ayear of a
multi-year contractmulti-year contract
• In the 2In the 2ndnd
& subsequent years,& subsequent years, FCP will be the lowerFCP will be the lower
ofof::
1.1. FSS price charged during preceding 12 monthsFSS price charged during preceding 12 months
(adjusted for inflation)(adjusted for inflation) OR…OR…
2.2. Reported annual NFAMP multiplied by 0.76 (minusReported annual NFAMP multiplied by 0.76 (minus
any inflation adjustment)any inflation adjustment)

33. Big 4 Federal Ceiling Prices (FCP):Big 4 Federal Ceiling Prices (FCP):
Multiple Year FCP CalculationMultiple Year FCP Calculation
Prior Year
FSS Price
Allowable
CPI-U
Increase
(annual)
.76*NFAMP
CPI-U
Additional
Discount
+
-
=
=
New Year
FSS-Inflated
Price Option
New Year
NFAMP-Based
Price Option
Lower
Of FCP

34. Big 4 Federal Ceiling Prices (FCP):Big 4 Federal Ceiling Prices (FCP):
Differences from MDRP and 340BDifferences from MDRP and 340B
• FCP discounts for Big 4 only apply to brand name drugsFCP discounts for Big 4 only apply to brand name drugs
(S & I) drugs, whereas the MDRP and 340B Program(S & I) drugs, whereas the MDRP and 340B Program
also impose discounts on generic drugsalso impose discounts on generic drugs
• FCP pricing calculation does not involve any type of bestFCP pricing calculation does not involve any type of best
price formulaprice formula
• Additional discount calculation for price increases thatAdditional discount calculation for price increases that
outpace inflation is not identicaloutpace inflation is not identical
• Though nominal prices are excluded from NFAMP, VAThough nominal prices are excluded from NFAMP, VA
interprets “nominal” more narrowly than CMSinterprets “nominal” more narrowly than CMS

35. What are the risks ?What are the risks ?
• FinesFines
• Significant increase in Federal ScrutinySignificant increase in Federal Scrutiny
• Public damage to reputationPublic damage to reputation

36. What steps can we take ?What steps can we take ?
• Data AuditData Audit
• Internal Legal Department ReviewInternal Legal Department Review
• Proactively “partner” with State and Federal AgenciesProactively “partner” with State and Federal Agencies

37. Pricing/Sales DataPricing/Sales Data
• Direct and Indirect SalesDirect and Indirect Sales
• Rebates and ChargebacksRebates and Chargebacks
• MedicaidMedicaid

38. Systems and ControlsSystems and Controls
• Where and when possible, use proven data processingWhere and when possible, use proven data processing
systems and technologiessystems and technologies
• Carefully design Filter mechanisms and place them inCarefully design Filter mechanisms and place them in
exclusively in the hands of Users.exclusively in the hands of Users.
• Dedicate IS resources to support this functional area asDedicate IS resources to support this functional area as
their primary responsibilitytheir primary responsibility

39. Your Internal Legal DepartmentYour Internal Legal Department
• Ensure full review and blessing of All pricing/discountEnsure full review and blessing of All pricing/discount
strategies by your Legal Departmentstrategies by your Legal Department
• Target high exposure areas such as Nominal PricingTarget high exposure areas such as Nominal Pricing
• Examine and enhance standard Legal clauses within allExamine and enhance standard Legal clauses within all
contracts going forwardcontracts going forward

40. Work with Federal and State AgenciesWork with Federal and State Agencies
• Appoint full time representative(s) to GovernmentAppoint full time representative(s) to Government
EntitiesEntities
• In addition to Government Mandated reports, provide theIn addition to Government Mandated reports, provide the
availability of additional detailed reportsavailability of additional detailed reports
• Strive for a positive, open dialogue at all times.Strive for a positive, open dialogue at all times.

41. Conclusions…Conclusions…