MEDICAID DRUG REBATE FILES

The Medicaid Drug Rebate Files group includes two files maintained by CMS (previously HCFA) to assist in the administration of the Medicaid drug rebate program mandated by Congress:

• Medicaid Drug Rebate Product Description File
• Medicaid Drug Rebate Utilization File

The Medicaid Drug Rebate Initiative (MDRI) was enacted as part of the Omnibus Budget Reconciliation Act of 1990. Effective January 1, 1991, drug manufacturers provide quarterly rebates to states for drugs dispensed to state Medicaid recipients. Manufacturers who want to participate in the Medicaid drug rebate program must sign a rebate agreement. The majority of the products produced by participating manufacturers are included in this rebate agreement.

States report Medicaid recipient drug utilization data to CMS and to drug manufacturers approximately 60 days after the end of each quarter. Manufacturers must pay any undisputed rebate claims to the states within 30 days of receiving the drug utilization data. In addition, manufacturers must supply CMS with the average manufacturer price (AMP) and best price for all their drugs in each calendar quarter. The AMP is the average unit price paid for a drug sold to retail pharmacies. The best price is the lowest price (excluding certain types of buying arrangements) for brand name drugs sold to any purchaser in the United States.

CMS assists states by calculating individual drug rebate amounts that states can use to invoice drug manufacturers (each quarter). CMS operates an MDRI information management system to perform this function.

Medicaid Drug Rebate Product Description File

Drugs that qualify for Medicaid vendor payment (i.e., provider, reimbursement) and for a manufacturer rebate are described and individually identified by National Drug Code (NDC) in the Medicaid Drug Rebate Product Description File. The NDC identifies the drug manufacturer, drug product, and package size. There is one NDC for each size drug package available from each manufacturer. The product descriptions contained in the file are provided by participating drug manufacturers.

File Creation

Approximately 570 drug manufacturers submit product data to CMS each quarter through one of three transmission forms: electronic transfer, microcomputer diskette, or hard copy. Manufacturers with very large product lines use the electronic transmission option. The diskette program option, which was designed by CMS specifically for manufacturer data submission, is used by over 400 manufacturers. These manufacturers have from 15 to 2500 products. Hard copy data submission is a temporary option only for companies with very few products.

Hard copy submissions are entered online by CMS staff. Electronic transmissions and data submitted on diskette are input into the MDRI System. As data are processed by the system, QA edits are performed to verify field values. The Medicaid Drug Rebate Product Description File is updated quarterly.

File Maintenance

The Medicaid Drug Rebate Product Description File is a snapshot that is produced 45 days after the start of each quarter. Batch and online edits are performed as the file is updated to check for valid values in each field. Product reports are generated to show any discrepancies in unit type fields and to rank drugs according to Drug Efficacy Study Implementation (DESI) rating. Error reports are generated for invalid values. Error reports of rejected records are sent to manufacturers so that data can be corrected and resubmitted. The content of the descriptive drug product fields, which are submitted by manufacturers, are assumed by CMS to be accurate and complete.

File Structure and Usage

The Medicaid Drug Rebate Product Description File contains individual drug product description information such as NDC code, product name, and Food and Drug Administration (FDA) information. There is one product record per NDC.

The file is used to identify all drugs that qualify for Medicaid vendor payment by a state and qualify for Medicaid drug manufacturer rebates to states. The Medicaid Drug Rebate Product Description File is also a valuable source of information on drug product attributes.

Data Structure and Usage

The Medicaid Drug Rebate Product Description File contains over 65,000 fixed length records. Each record contains the full product name as registered with the FDA, NDC code; identification of the drug as a single source, innovator multiple source, or non-innovator (generic) drug; type of unit used as a basis for rebate calculation and utilization measurement; DESI rating assigned by FDA to rate effectiveness and the FDA therapeutic equivalency code; FDA approval date; prescription or over-the-counter product; first full month product entered the market; and date product is no longer distributed by manufacturer.

The drug rebate product description data are used within CMS to operate the Drug Rebate Program and to develop legislatively mandated quarterly and annual reports to Congress.

Methods of Access

CMS users may obtain browse-only access to the file data through the MDRI System. The Medicaid Drug Rebate Product Description File is also available in flat file format as a PUF. Additional information about this file is discussed in the Public Use Files Data chapter.

Migration of Data

The Medicaid Drug Rebate Product Description File has not been modified as a result of the changing CMS data processing environment.

List of Data Elements

A list of data elements contained in the Medicaid Drug Rebate Product Description File, along with brief definitions and coding schemes, will be included in the future on the CMS web site at www.cms.hhs.gov.

Medicaid Drug Rebate Utilization File

The Medicaid Drug Rebate Utilization File contains detailed, NDC-level Medicaid drug utilization data submitted to CMS by states. The file consists of product description data for each drug dispensed to Medicaid recipients, the quarterly total Medicaid utilization of each drug, and total reimbursements (i.e., Medicaid vendor payments) made by the state for each drug.

File Creation

States submit data on tape to CMS. The data include records for each NDC reimbursed under their Medicaid programs. As these data are input into the MDRI System, QA edits are performed to verify field values. Quarterly files are created from these data and are available beginning in 1991.

File Maintenance

Medicaid Drug Rebate Utilization files from previous quarters are updated continually as data for those quarters are received from states. QA range and format edits are performed that check for valid values in each field.

As part of the update process, CMS sends letters to each state acknowledging receipt of data, detailing invalid values, and indicating whether the data were accepted or rejected. Utilization reports track state data submissions by quarter and the action taken on tapes that cannot be processed.

File Structure and Usage

The Medicaid Drug Rebate Utilization File contains one record for each drug reimbursed by a state Medicaid program within a quarter. Each record includes the total reimbursement amount derived from all individual claims paid by a state during the covered quarter.

File information is based on date of state payment, not date of service. The file is used to generate reports to Congress to monitor the Drug Rebate Program. Private companies also purchase the file to determine how many units were sold under the Medicaid program each quarter and for marketing purposes.

The drug utilization data gathered in the file are limited to those states that report quarterly utilization information. All states, except Tennessee and Arizona, report this information. Also, due to the lag before data are received from the state, data are input into the system on a continuous basis. Beginning in fiscal year 1994, states began to incur penalties for late or incomplete data. At that time, data reporting became more timely.

Data Structure and Usage

Each quarter the Medicaid Drug Rebate Utilization File contains about 20,384,900 fixed length records. The data elements contained in these records include drug product information identifying the individual drug; the number of units reimbursed (a unit is the smallest dispensable amount of a drug); the total reimbursement amount paid by the state including the dispensing fee; the total rebate amount claimed; and the number of prescriptions filled. Quarterly files are available beginning in 1991.

Methods of Access

CMS users may obtain browse-only access to the Medicaid Drug Rebate Utilization File data through the MDRI System. The file is also available in flat file format as a PUF. Additional information about the public use version of the file can be found in the Public Use Files Data chapter.

Migration of Data

The Medicaid Drug Rebate Utilization File has not been modified as a result of the changing CMS data processing environment. Utilization data are now available and are summarized by NDC and by state.

List of Data Elements

A list of data elements contained in the Medicaid Drug Rebate Utilization File, along with brief definitions and coding schemes, will be included in the future on the CMS web site at www.cms.hhs.gov.

Medicaid Data | Eligibles, Claims, and Utilization Files | Drug Rebate Files | Budget and Expenditure Files