Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

AUGUST 2001 

OEI-03-00-00030 

Medicaid Recovery of Pharmacy Payments 

from Liable Third Parties 
OFFICE OF INSPECTOR GENERAL 

The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, is to 

protect the integrity of the Department of Health and Human Services programs as well as the 

health and welfare of beneficiaries served by them. This statutory mission is carried out through 

a nationwide program of audits, investigations, inspections, sanctions, and fraud alerts. The 

Inspector General informs the Secretary of program and management problems and recommends 

legislative, regulatory, and operational approaches to correct them. 

Office of Evaluation and Inspections 

The Office of Evaluation and Inspections (OEI) is one of several components of the Office of 

Inspector General. It conducts short-term management and program evaluations (called 

inspections) that focus on issues of concern to the Department, the Congress, and the public. 

The inspection reports provide findings and recommendations on the efficiency, vulnerability, 

and effectiveness of departmental programs. 

OEI's Philadelphia Regional Office prepared this report under the direction of Robert A. Vito, 

Regional Inspector General, and Linda M. Ragone, Deputy Regional Inspector General. 

Principal OEI staff included: 

REGION HEADQUARTERS 

Isabelle Buonocore, Project Leader Linda Frisch, Program Specialist

Nancy J. Molyneaux, Program Analyst

Tanaz Dutia, Program Analyst

To obtain copies of this report, please call the Philadelphia Regional Office at (800) 531-9562. 

Reports are also available on the World Wide Web at our home page address: 

http://www.dhhs.gov/oig/oei 
EXECUTIVE SUMMARY 

PURPOSE 

This report (1) quantifies the Medicaid dollars at risk of being lost when Medicaid pays 

pharmacy claims for beneficiaries who have other insurance, and (2) describes States’ 

experiences with third-party payment of claims. 

BACKGROUND 

Millions of Medicaid beneficiaries have other pharmacy coverage through private health 

plans, employers, non-custodial parents, State programs such as workers’ compensation, 

or Federal programs such as Medicare. Because Medicaid is usually considered the 

payer of last resort, other insurance sources may be liable for claims providers send to 

Medicaid. In this report, other insurance sources are referred to as “third parties.” Since 

many third parties contract with pharmacy benefit management companies to provide a 

host of services including pharmacy-claims processing, we also use the term third parties 

for these companies. 

When claims have a liable third party, State Medicaid agencies either use a 

cost-avoidance system in which the claim is returned to the pharmacy to bill the third 

party, or they “pay and chase,” i.e., pay the claim and try to recover the payment from the 

third party. States are mandated to pay and chase claims under certain circumstances, but 

in general, payment for claims with third-party liability must be avoided unless the State 

has a Federal cost-avoidance waiver. The Centers for Medicare and Medicaid Services 

(CMS) may grant a cost-avoidance waiver for pharmacy claims if the State demonstrates 

that paying and chasing is cost effective. 

FINDINGS 

Thirty-two States are at risk of losing over 80 percent ($367 million) of the 

Medicaid pharmacy payments they tried to recover from third parties through the 

pay-and-chase approach 

Thirty-two States identified $440 million in potential recoveries, of which they recovered 

$73 million (17 percent). The remaining 18 States reported they could not identify the 

amount they paid and chased. 

Medicaid Recovery of Pharmacy Payments i OEI-03-00-00030 
However, the cost-avoidance approach prevented $185 million from being at risk 

in 17 States 

States that use cost avoidance say it is successful once a system is in place. States that do 

not use cost avoidance have concerns about it burdening pharmacies and beneficiaries. 

Almost three-quarters of States report third parties refuse to process or pay 

Medicaid pharmacy claims 

States said when they try to recover payments they are faced with the following 

problems: denials due to incompatible claim formats, unreasonable filing time limits, 

unprocessed claims with no explanation, vague denials, and the inability to identify the 

liable payer or claims processing entity. 

More States had problems with pharmacy benefit management companies than 

with all other types of third parties combined 

Thirty-two States experienced problems with pharmacy benefit management companies. 

In addition to having all the same problems with these companies as with other types of 

third parties, 14 States said pharmacy benefit management companies will not process 

Medicaid claims because their clients have not authorized them to do so. 

While States have difficulty recovering payments, methods such as sharing 

information with third parties, using effective billing practices, and taking legal 

action have been successful for some States 

State recommendations for solving recovery problems include universal claim 

formats, eligibility data matches, and new rules for pharmacy benefit 

management companies and insurers 

RECOMMENDATIONS 

To reduce the dollars at risk of being lost, we offer the following 

recommendations for CMS: 

Waivers. Review States’ cost-avoidance waivers for pharmacy claims to determine if 

they are meeting the cost-effectiveness criterion. Our findings indicate that, overall, pay 

and chase is not a cost-effective policy. The CMS should also review State policies to 

determine if some States are paying and chasing pharmacy claims without a waiver. 

Best Practices. Continue working together with States to identify, develop, and 

disseminate the most successful methods in both avoiding and recovering Medicaid 

pharmacy payments that are the responsibility of liable third parties. 

Medicaid Recovery of Pharmacy Payments ii OEI-03-00-00030 
Tracking. Require States to track the dollar amounts they pay and chase and the 

amounts they recover on pharmacy claims if they have cost-avoidance waivers. This 

information is necessary to determine whether a State’s paying and chasing is cost 

effective. Furthermore, unless States know how much money third parties owe, they 

cannot use their collection resources to the best advantage. 

Claim format. Clarify for States whether claim standardization requirements under the 

Health Insurance Portability and Accountability Act will be applied to pharmacy services 

in a third party environment. Since implementation of these requirements is at least 

1.5 years away, CMS should continue to assist States in seeking immediate remedies to 

get their claims processed. The types of roles CMS might play in this regard could be 

fact finder, technical advisor, or coordinator. 

Education. Develop strategies, on a national level, to educate third parties about 

Medicaid and third-party pharmacy issues. In addition, CMS should collaborate with the 

Department of Labor to develop education targeted specifically to self-insured health 

plans regulated under the Employee Retirement Income Security Act (ERISA). 

Legislation. Determine whether legislation is needed to: 

C explicitly include pharmacy benefit management companies in the Medicaid 

program’s definition of a third party, 

C require third parties to match their eligibility files with Medicaid’s eligibility 

files, and 

C allow Medicaid up to 3 years to recover payments from liable third parties. 

If legislation is determined to be needed, CMS should consider coordinating with the 

Department of Labor to discuss requiring similar items from ERISA-governed health 

plans. 

AGENCY COMMENTS 

The CMS concurred with our recommendations and stated they are committed to 

resolving issues that stand in the way of full recovery of Federal and State dollars. They 

plan to re-examine States’ cost avoidance waivers and will emphasize cost avoidance at 

the August 2001 National Third Party Liability Conference. In addition, they have 

worked with States and third parties to develop a claim format that Medicaid agencies 

can use for submitting electronic claims to third parties; they are helping to educate 

PBM’s clients about Medicaid reimbursement issues; and they will review issues to 

determine if legislation is needed. While concurring with the premise of our 

recommendation to require tracking of dollar amounts paid and chased and dollar 

amounts recovered on pharmacy claims, CMS stated that tracking all pharmacy claims 

may not be the only method to substantiate cost-effectiveness of a waiver. We recognize 

that this data may not be the sole factor in determining the cost-effectiveness of a waiver. 

However, we still believe that upon receiving a waiver, a State should be required to 

track this information. 

Medicaid Recovery of Pharmacy Payments iii OEI-03-00-00030 
TABLE OF CONTENTS 

PAGE

EXECUTIVE SUMMARY ................................................ i

INTRODUCTION .............................................. 1

FINDINGS

Medicaid dollars at risk ................................................... 6

Cost avoidance prevents dollars from being at risk .............................. 7

Third party non-payment of Medicaid claims .................................. 8

Problems with pharmacy benefit management companies ....................... 10

Some successful methods of payment recovery ............................... 11

State recommendations for solving payment recovery problems .................. 12

RECOMMENDATIONS ......................................... 14

APPENDICES

A. Technical Terms Used in This Report .................................... 16

B. 1999 Medicaid Pharmacy Data for 50 States ............................... 17

C. Medicaid Pharmacy Dollars at Risk for 32 States ........................... 19

D. Centers for Medicare and Medicaid Services’ Comments .................... 21

Medicaid Recovery of Pharmacy Payments iv OEI-03-00-00030 
INTRODUCTION 

PURPOSE 

This report (1) quantifies the Medicaid dollars at risk of being lost when Medicaid pays 

pharmacy claims for beneficiaries who have other insurance, and (2) describes States’ 

experiences with third-party payment of claims. 

BACKGROUND 

Medicaid Expenditures for Pharmacy Claims 

Medicaid is a program, created under Title XIX of the Social Security Act, that pays for 

medical and health-related assistance for certain vulnerable and needy individuals and 

families. It is administered by States but financed with State and Federal funds. The 

Federal Government provides 50 to 83 percent of the funding depending on the State’s 

per capita income. 

The annual Federal-State Medicaid expenditure for pharmacy claims is in the billions of 

dollars. In 1997 it was $11.9 billion, and in 1999 it was $16.4 billion. In 1999, over 32 

million beneficiaries were served under the pharmacy benefit. 

Medicaid Beneficiaries with Other Insurance 

Millions of Medicaid beneficiaries have other health insurance. Pharmacy coverage may 

be through private health insurance, employment-related health insurance, medical 

support from non-custodial parents, automobile insurance, State programs such as 

workers’ compensation, or Federal programs such as Medicare. In accordance with 

Federal regulations, Medicaid beneficiaries “assign to the Medicaid agency their rights to 

medical support and to payment for medical care from any third party. [However,] the 

assignment of rights ... is effective only for services that are reimbursed by Medicaid 

(42CFR433.145).” In other words, if Medicaid paid for a service that is covered by 

another source of insurance, Medicaid has a legal right to payment from that source. 

Most other insurance sources are considered primary payers in relation to Medicaid and 

may, therefore, be financially liable for claims. Medicaid is a payer of last resort with a 

few exceptions which are noted in the State Medicaid Manual, Section 3904.4A-B. 

Medicaid refers to other insurers as third parties and refers to claims for beneficiaries 

who have other insurance as third party claims. These and other technical terms are 

defined in Appendix A. 

Medicaid Recovery of Pharmacy Payments i OEI-03-00-00030 
Cost Avoidance 

The term cost avoidance is used to describe Medicaid’s avoidance of paying claims when 

beneficiaries have other insurance. Under cost avoidance, if a State Medicaid agency 

receives a claim, the agency must deny the claim and return it to the provider. The 

provider can then bill the third party for payment. Medicaid agencies also avoid paying 

claims by preventing them from being billed to them in the first place. Instead, the 

agencies alert pharmacies about the existence of the liable third party through their 

computer systems at the time of purchase. 

In order for Medicaid agencies to use cost avoidance effectively, they must take 

reasonable measures to determine the legal liability of third parties. At a minimum, the 

agencies must collect insurance information from prospective Medicaid beneficiaries 

during the initial eligibility interview and the redetermination process. State Medicaid 

agencies must also conduct data exchanges with Social Security Administration wage 

and earnings files; and the files of State agencies that keep information on wages, child 

support, welfare, motor vehicle accidents, and workers’ compensation. Any of these files 

might indicate the existence of other health insurance. 

Medicaid agencies are required to notify the Centers for Medicare and Medicaid Services 

(CMS) of the total amount they avoided paying for all services for beneficiaries who 

have other insurance. This notification is part of the State’s quarterly report of 

expenditures for their Medicaid program. The notification does not, however, distinguish 

the amount avoided for pharmacy services from the total amount avoided for all services. 

Waivers to Pay and Chase Pharmacy Claims 

The CMS grants cost-avoidance waivers for various services including pharmacy. 

Medicaid agencies with a cost-avoidance waiver for pharmacy services may reimburse 

pharmacies that serve beneficiaries who have other insurance. After paying the 

pharmacy, the agency seeks payment recovery from the third party. This process is 

known as pay and chase. Federal waivers from cost avoidance are granted if the State 

Medicaid agency can demonstrate that paying and chasing is cost effective. 

There are circumstances under which Medicaid agencies pay and chase even when they 

do not have a waiver. Federal law requires States to pay and chase claims when (1) 

coverage is through a parent whose obligation to pay support is enforced by the State’s 

child support enforcement agency, (2) the service is prenatal care for pregnant women, 

and (3) the service is preventive pediatric care. In addition, if a State learns of the 

existence of third-party insurance after the claim has been paid, the State will chase for 

payment recovery. 

When States submit their quarterly report of Medicaid expenditures to CMS, they include 

the total amount they recovered from pay and chase activity. The States are not required 

to notify CMS of the total amount they attempted to recover. Nor are the States required 

to report the amounts recovered on pharmacy services alone. 

Medicaid Recovery of Pharmacy Payments 2 OEI-03-00-00030 
Pharmacy Benefit Management Companies 

Payers of insurance benefits either process claims in-house or contract the processing to 

another entity. In the case of pharmacy benefits, many payers have contracts with 

pharmacy benefit management companies (PBMs). These companies provide numerous 

client-tailored services for health plans. The PBMs may be responsible for the entire 

management of the health plan’s pharmacy benefit, or they may provide one or more of 

the following services: process pharmacy claims, provide mail-order prescription 

services, maintain pharmacy networks, conduct drug utilization reviews, and develop 

drug formularies. Organizations that contract with these companies include, but are not 

limited to, insurers, employers, and managed care organizations. 

It has been estimated that PBMs handle 70 percent of all prescription orders dispensed 

for ambulatory care, and that 10 PBMs account for the bulk of covered individuals. What 

this means for Medicaid is that many payments made on pharmacy claims have to be 

recovered from PBMs. For the purposes of this report we include PBMs in the term third 

party. 

Problems Recovering Pharmacy Payments from Third Parties 

In 1996, the Pharmacy Claims Reimbursement Team, made up of CMS and State 

Medicaid agency representatives, collaborated on a study called “Medicaid Encounters 

Barriers to Recovering Payment for Pharmacy Claims from Third Parties.” The study 

found that “58 percent of the States recover less than 40 percent of the money they 

pursue...” and that a small number of PBMs and TRICARE (health plan for military 

personnel) stood out as creating the greatest obstacles for payment recovery. One PBM 

in particular was far and above the most uncooperative entity among third parties. The 

PBMs were not processing Medicaid claims and were not willing to identify the insurers 

and employers with whom they contract. 

Efforts to Overcome Payment-Recovery Barriers 

The Pharmacy Claims Reimbursement Team has been steadily gathering facts and 

working toward overcoming payment-recovery barriers. One effort of the team has been 

to identify third parties that contract with the PBM named in their 1996 study as the most 

uncooperative. Another major step was building a partnership between CMS and States 

so that information could be shared. A network of State pharmacy representatives was 

developed and information can now be disseminated to all States. 

The team has also been laboring to understand claim formatting problems which prevent 

the recovery of some pharmacy payments. To this end they have worked with a major 

PBM, the National Council for Prescription Drug Programs, and with Medicaid 

claims-processing contractors to find solutions. They are currently trying to help all 

States move to a commonly-used electronic format for their pharmacy claims. 

Medicaid Recovery of Pharmacy Payments 3 OEI-03-00-00030 
Request for Assistance 

Our inspection was requested by CMS staff. We were asked for assistance in resolving 

problems identified in the Pharmacy Claims Reimbursement Team’s 1996 study. A 

particular concern was that PBMs would not disclose information about third parties that 

might be liable for Medicaid claims. 

METHODOLOGY 

We collected information from CMS, Medicaid agencies, insurers, and employers from 

December 1999 through March 2001. 

CMS Data 

We gathered information from CMS’s Central Office concerning the Pharmacy Claims 

Reimbursement Team’s 1996 study, and we received periodic updates regarding the 

team’s continuing work. 

State Medicaid Agency Data 

We gathered information from representatives of Medicaid agencies in 49 States and the 

District of Columbia. These representatives had expertise in pharmacy, third-party 

liability, and operational issues. Data was not collected from the State of Tennessee 

because their representative informed us their entire Medicaid population is in managed 

care. In Tennessee, the State’s managed care contractors are responsible for determining 

third-party liability and for recovering payments. For the sake of brevity, we use the 

word "State" as a synonym for “State Medicaid agency” and "State Medicaid agency 

representative" throughout the findings section of this report. We refer to the District of 

Columbia as a State for the same reason. 

We collected a variety of data regarding outpatient pharmacy claims. The data we 

requested included total expenditures for pharmacy benefits; and total number of 

beneficiaries with third-party insurance, and the percentage of these beneficiaries with 

pharmacy coverage. The data on pharmacy claims with third-party liability included 

total dollars avoided; total dollars paid and chased; and total dollars recovered from pay 

and chase activity. We also requested information about agencies’ policies and 

procedures, and their experiences with third parties. 

While we collected data for calendar years 1998, 1999, and first quarter of 2000, the 

findings in this report are based on 1999 data. Some States did not have figures available 

for some of the items and time periods we asked about. Because 1999 was the most 

recent full year prior to our study, and because States had more data for 1999 than for 

1998 or 2000, our findings are for 1999 unless we specify otherwise. 

Medicaid Recovery of Pharmacy Payments 4 OEI-03-00-00030 
The financial data States provided had caveats. First, pharmacy payment amounts were 

not always limited to outpatient prescription drugs, or for the calendar year, as we 

requested. Some States provided data that included inpatient drugs, syringes, diabetes 

test strips, over-the-counter drugs, or small amounts of other health services. Some 

States provided fiscal year instead of calendar year data, and some provided estimated 

instead of actual figures. Finally, States said that the claims they paid and chased could 

have included claims that were not the liability of third parties if a Medicaid beneficiary’s 

coverage changed, or if the third party’s health plan did not cover a particular service. 

See Appendix B for the 1999 pharmacy data provided by each State. 

Insurer and Employer Data 

We requested information from a purposive sample of 170 insurers and 114 employers 

about their policies and practices regarding reimbursement of Medicaid pharmacy claims. 

The insurers included 149 members of the Health Insurance Association of America who 

were listed on the Internet and 21 insurers identified by CMS. The 114 employers were 

identified by CMS and States. 

We received information, anonymously, from 41 insurers and 47 employers who 

provided pharmacy benefits. Forty-four of the 47 employers were partially or fully selfinsured (i.e., employers who bear some of the risk for their employees’ health claims). In 

this report, we use the term self-insured plans to describe private employer health plans 

which are regulated by the U.S. Department of Labor under the Employee Retirement 

Income Security Act. 

____________ 

This study was conducted in accordance with the Quality Standards for Inspections 

issued by the President’s Council on Integrity and Efficiency. 

Medicaid Recovery of Pharmacy Payments 5 OEI-03-00-00030 
FINDINGS 

Thirty-two States are at risk of losing over 80 percent

($367 million) of the Medicaid pharmacy payments they tried

to recover from third parties through the pay-and-chase

approach 

Thirty-two States were able to provide data quantifying the dollars at risk. These 32 

States identified $440 million in potential recoveries from third parties in 1999, of which 

they recovered $73 million (17 percent). The total pharmacy expenditures for these 32 

States was over $12 billion. 

The 32 individual States paid and chased amounts ranging from $1,000 to $70 million. 

See Appendix C for dollars at risk in each of these 32 States. While the percentage of 

dollars at risk for these States ranged from 0 to 99 percent, only 5 States recovered more 

than half of the outstanding amounts. 

The other 18 States reported that they could not identify the amount they paid and chased 

for pharmacy claims. Thirteen of the 18 States could not identify the amount they 

recovered for pharmacy claims. The most common reason why the States could not 

provide financial data was that their systems do not isolate pharmacy claims from claims 

for other services. The total pharmacy expenditures for these 18 States was $4.2 billion 

in 1999. 

Regardless of whether a State used mainly cost avoidance or pay and chase, the 

overall recovery rate for pay and chase was low 

In 1999, 35 States used the pay-and-chase method for the majority of their pharmacy 

claims, and 15 States used the cost-avoidance method for the majority of their pharmacy 

claims. However, of the 32 States that were able to quantify dollars at risk, 24 used pay 

and chase and 8 used cost avoidance. As shown in Table 1 on the next page, regardless 

of which of these two methods States used for the majority of their claims, when they 

paid and chased, the overall recoveries from third parties were less than 20 percent. 

Whether a State pays and chases a large or small amount of claims, the results are the 

same—a significant percentage of dollars are at risk of not being recovered from third 

parties. 

Medicaid Recovery of Pharmacy Payments 6 OEI-03-00-00030 
Table 1. PERCENTAGE OF DOLLARS AT RISK 

BY MAIN CLAIMS PROCESSING METHOD - 1999 

State’s Method for 

Processing the 

Majority of 

Pharmacy Claims 

Number of 

States that 

Provided 

Data 

Amount Paid 

and Chased 

Amount 

Recovered 

Percentage 

of Dollars 

At Risk 

Pay and Chase 24 $404,286,020.39 $67,840,490.81 83% 

Cost Avoidance 8* $35,870,979.91 $5,333,374.97 85% 

Totals 32 $440,157,000.30 $73,173,865.78 83% 

* One of these States only cost avoided claims that were over $50 

Source: State Medicaid agency data provided to OIG 

Three States paid and chased the majority of pharmacy claims without a waiver 

Three States paid and chased the majority of their claims without a cost-avoidance 

waiver. Two of the three States provided data on both the amounts they paid and chased 

and recovered. One of these States paid and chased $21 million and recovered $2.2 

million (11 percent). The other State paid and chased $800,000 and recovered $60,000 

(7 percent). The State which could not provide pay and chase and recovery amounts had 

the second highest total pharmacy expenditures among States ($1.8 billion). 

However, the cost-avoidance approach prevented $185

million from being at risk in 17 States 

Seventeen States were able to provide financial cost-avoidance data for pharmacy claims. 

These States avoided paying $185 million in 1999. The data comes from both the States 

that avoid payment and those that pay and chase the majority of their third party claims. 

However, only 9 of 15 States that avoided the majority of their claims could provide us 

with data. These nine States reported avoiding $80 million. 

The premise of cost avoidance is that it prevents the payment of claims that are the 

liability of third parties. Many of the claim dollars that are avoided cannot be tracked by 

States because the responsible third party has been billed first instead of Medicaid. 

Therefore, the total actual amount avoided is greater than the amount States are able to 

track. 

States that use cost avoidance say it is successful once a system is in place 

States that use cost avoidance believe that doing so is not difficult once a system is in 

place. But they said two things are key to making cost avoidance successful: (1) working 

with pharmacies or pharmacy associations prior to implementing the cost-avoidance 

system, and (2) maintaining accurate information on beneficiaries’ third-party coverage. 

They also said States should implement a system override that allows pharmacies to bill 

Medicaid when there is a discrepancy in a beneficiary’s coverage. Six States cited cost 

Medicaid Recovery of Pharmacy Payments 7 OEI-03-00-00030 
avoidance as the most successful way to circumvent problems associated with paying and 

chasing. One State called it a “silver bullet.” 

States that do not use cost avoidance have concerns about it burdening 

pharmacies and beneficiaries 

Nineteen States that pay and chase a majority or all of their pharmacy claims believe cost 

avoidance places a financial burden on pharmacies. For example, States reported that 

some pharmacies have billing systems which prohibit them from billing two payers at the 

same time (i.e., billing the third party for the claim and Medicaid for the copayment). 

States also said (1) some third parties pay the policyholder and not the pharmacy; and (2) 

if coverage information is not accurate the claim could be denied by both Medicaid and 

the third party, which leaves the pharmacy without reimbursement. 

Eight States that pay and chase all of their pharmacy claims also said cost avoidance can 

negatively impact beneficiary access. They are concerned that pharmacies that are 

unable to bill two payers at the same time may refuse to serve Medicaid beneficiaries 

who have third-party insurance. Other State concerns are for beneficiaries in nursing 

homes who cannot use the third party’s network pharmacy as required by the health plan, 

and for beneficiaries who cannot afford the copayment required by mail order programs 

that many health plans use. 

Despite these concerns, when we collected our data 12 States reported they were 

switching to cost avoidance, or were considering switching in the future because of all 

the problems associated with paying and chasing. 

Almost three-quarters of States report that third parties

refuse to process or pay Medicaid claims 

Thirty-six States said that when they try to recover payments, they are faced with the 

following problems: denials due to incompatible claim formats, unreasonable filing time 

limits, unprocessed claims with no explanation, vague claim denials, and the inability to 

identify the liable payer or claims processing entity. 

Incompatible claim formats often lead to the denial of Medicaid claims 

Twenty-nine States indicated that the lack of universal formatting and data elements on 

pharmacy claims leads to the denial of Medicaid claims. States said they usually do not 

have various pieces of information that are required by some third parties. For example, 

they may not have diagnosis codes, patient’s signature, patient’s relationship to the 

policyholder, or physician’s Drug Enforcement Agency number. Third parties have 

different requirements which makes it even harder for States to submit “correctly” 

formatted claims. Data that we collected from insurers and employers indicates that 

Medicaid claims do not include all the information required by third parties. 

Medicaid Recovery of Pharmacy Payments 8 OEI-03-00-00030 
States reported that when their claims are denied for missing data they add the missing 

data if they have it and resubmit the claim. However, the constant reworking and 

resubmission of claims puts an added administrative and financial burden on States. We 

were told one PBM does not point out all the data elements missing from a claim the first 

time they deny it. After each resubmission the PBM may point out another missing data 

element from the same claim. States said this same PBM will also deny claims if the data 

elements are in the wrong sequence. Another State said PBMs were reimbursing their 

claims at a lower rate as a penalty for being in the wrong format. 

Unreasonable filing time limits make it difficult for States to recover payments 

Sixteen States said unreasonable filing time limits are a problem because if they submit 

claims past the third party’s filing time limit the claims are automatically denied. States 

reported that common time limits are 30 to 90 days and the shortest was 7 days. States 

said they have a hard time meeting time limits when they pay and chase because their 

pharmacies may have 1 year or longer to submit claims. Therefore, by the time the State 

receives the pharmacy’s claim, pays it, and tries to recover payment from the third party, 

the third party’s filing time limit may have passed. 

Unprocessed claims and vague denials keep Medicaid from recovering payments 

Twelve States said their claims were not processed or were returned with vague denial 

codes from third parties. Some States reported getting back claims with no explanation 

as to why they were not processed. Other unprocessed claims are never returned and 

there is also no explanation. States also said that some third parties will only process 

claims that are submitted by a provider or a policyholder. While some States speculate 

that third parties may not understand Medicaid’s pay and chase activity, or that Medicaid 

is the payer of last resort, 93 percent of the employers and insurers that provided us with 

data said they know that Medicaid is the payer of last resort. 

States reported that when a claim denial code is vague or represents several possible 

reasons for the denial, the State cannot determine what information needs to be corrected 

in order to resubmit the claims. This has the effect of terminating the State’s attempt to 

recover payments. One of these States reported receiving a batch of 21,000 claims from 

a PBM with such a denial code. 

Inability to identify liable payers and claims processing entities makes recovery 

of payments almost impossible 

Twelve States said that if liable payers and their claims processors are not identified 

correctly, States risk sending claims to the wrong entity and not recovering payments. 

Despite efforts to identify beneficiaries’ other insurance, States said that information in 

their third-party files can be incomplete or erroneous. This is because the State may not 

receive complete and accurate information about the beneficiary’s other coverage; the 

State may not be notified of coverage changes; or the beneficiary may have more than 

Medicaid Recovery of Pharmacy Payments 9 OEI-03-00-00030 
one other insurer and the State may not know which one is primary and which is 

secondary. 

States also have difficulty identifying the liable payer’s claims processing entity. This is 

often due to insurers changing claims processors without notifying the State. In addition, 

States are sometimes given the name of an entity without the address. This is a problem 

because some entities have similar names and some have multiple billing addresses. 

Identifying the correct claims processor can be a problem for payers as well. One 

employer reported having multiple medical plan carriers. This employer said Medicaid 

claims do not identify the carrier and therefore the employer does not know which carrier 

is responsible for the claims. 

More States had problems with pharmacy benefit

management companies than with all other types of third

parties combined 

Thirty-two States experienced problems with pharmacy benefit management companies. 

As shown in Table 2 below, more States had problems with these companies than with all 

other types of third parties combined. In addition to having all the same problems with 

PBMs that they have with other third parties, 14 States said some PBMs will not process 

Medicaid claims because the PBMs’ clients have not authorized them to do so. 

Furthermore, States reported that these companies have not been willing to identify the 

names and addresses of the liable payers. This is a serious problem for Medicaid given 

the volume of pharmacy claims processed by pharmacy benefit management companies. 

When PBMs do not process Medicaid claims and will not identify the liable payer, States 

cannot recover their payments. 

Table 2. COMPARISON OF “PROBLEM” THIRD PARTIES 

Type of Third Party Number of States that Experienced Problems 

PBM 32 

Insurer/Carrier 13 

TRICARE Standard* 6 

Self-insured plan 4 

Point-of-sale plan 1 

Medicare 1 

*The fee-for-service health care program for active duty and retired members of the uniformed 

services, their families, and survivors (formerly called CHAMPUS). 

Source: State Medicaid agency data provided to OIG 

Medicaid Recovery of Pharmacy Payments 10 OEI-03-00-00030 
The data we collected from insurers and employers indicates that 15 percent of those who 

contract with a pharmacy benefit management company had not given them authorization 

to process Medicaid claims. We have also learned that a list provided to CMS of over 

600 organizations that contract with one of the largest PBMs indicated that 75 percent of 

these organizations do not authorize the PBM to process Medicaid claims. 

Twenty-six States mentioned one particular pharmacy benefit management company as a 

problem. Two States said the company has not paid them for years. One of these States 

said they stopped sending claims to this pharmacy benefit management company because 

“they just ignored them.” Another State said they had “talked with [the PBM’s] 

attorneys and gotten a complete run around.” The same State reported losing “tens of 

millions” of dollars because of this company. This company had also been identified as 

the biggest problem for States in the 1996 study by CMS and State Medicaid agencies. 

While States have difficulty recovering payments, methods

such as sharing information with third parties, using

effective billing practices, and taking legal action have been

successful for some States 

While 33 States reported that less than half their efforts to recover payments from third 

parties were successful, some States mentioned recovery methods that have been 

successful. These methods include sharing information with third parties, using effective 

billing practices, and taking legal action. 

Sharing information with third parties 

Working with third parties can be a successful method for recovering payments 

according to 31 States. Some States said communication with third parties helps them 

keep beneficiary coverage information complete and accurate. This is done through a 

verification process or the matching of eligibility files. Under the verification process, 

States phone or write to the carrier to verify coverage information. The matching of 

eligibility files, on the other hand, can be done via tape sharing, database sharing, or 

on-line matching. Thirty-eight States said they match files with some insurers, 13 match 

with some self-insured plans, and 11 match with certain PBMs. Of the 88 insurers and 

employers that sent us data, 56 said they did not match their eligibility files with 

Medicaid files. Of those 56 respondents, 70 percent said they did not match files because 

Medicaid had not asked them to do so. 

Information sharing with third parties has advantages beyond updating beneficiary 

coverage. For example, one State said an insurance carrier notifies them when they 

change PBMs so that the State can submit claims to the right PBM. Another State said a 

PBM provided a list of group insurance plans which the States could bill directly. Open 

communication also makes follow-up regarding claim issues easier for States. 

Medicaid Recovery of Pharmacy Payments 11 OEI-03-00-00030 
Information does not always have to come from the third party—it can also come from 

providers. In one State, when a pharmacy learns that Medicaid beneficiaries have other 

insurance they note the third-party information on a card and mail it to the State. The 

State then uses this information to update their third-party database. 

Using effective billing practices 

Eleven States regard electronic billing as an effective way to recover payments. They 

said that once claim format and system compatibility issues are resolved, this is more 

efficient than paper claims. However, other States have been successful submitting paper 

claims that have been formatted to meet the requirements of third parties. 

Five States said billing the insurance carrier directly (i.e., bypassing the PBM) or using 

the automated group capture system were helpful in recovering payments. Under the 

automated group capture system, when a State discovers that an insurer uses a particular 

PBM in the case of one beneficiary, they automatically send claims for all beneficiaries 

covered by that insurer to that company. 

Taking legal action 

Three States spoke about legal steps they have taken to recover pharmacy payments from 

liable third parties. One State described reaching a settlement in which a sample of 

Medicaid claims was adjudicated and the result was projected to the universe of claims. 

This same State also told employers who were not paying Medicaid claims that the State 

would put a lien on their properties. A second State uses internal legal counsel to draw 

up contracts to obtain eligibility files of third parties. The contracts protect the 

confidentiality of the information. This State has also expanded State law to include 

PBMs in the definition of third parties that must match eligibility files with the State. If 

third parties refuse to match files they are subject to penalties. A third State said their 

State Attorney General got involved when a PBM was not responding to claims. The 

problem was resolved when the PBM was taken out of the loop. That State now sends 

Medicaid claims directly to the insurance carrier for processing. 

State recommendations for solving recovery problems

include universal claim formats, eligibility data matches, and

new rules for PBMs and insurers 

Universal claim formats and timely filing limits 

Twenty-five States said standardizing claim format and data elements for pharmacy 

claims is a solution to the problem of incompatible claim formats. Some States suggested 

that a universal claim format be mandated. Other States believe that the Health Insurance 

Portability and Accountability Act (Public Law 104-191), which requires a single 

Medicaid Recovery of Pharmacy Payments 12 OEI-03-00-00030 
 standardized format for all electronic claims, will solve the problem of incompatible 

claim formats. The compliance date for the requirement is October 2002 (2003 for small 

health plans). One State expressed the concern that the law may not result in a mandated 

claim format that allows for third-party coordination of benefits. 

Nine States suggested changes to the filing time limits. The suggestions include 

(1) establishing a universal filing time limit for all claims processing entities, (2) waiving 

or lengthening filing time limits for Medicaid and, (3) requiring third parties to respond 

to Medicaid claims within an established time frame. 

Eligibility data matches 

Nine States believe third parties should be required to match their eligibility data with 

Medicaid eligibility data so that Medicaid could have reliable coverage information. 

This would reduce the number of invalid claims going to third parties and make cost 

avoidance and pay and chase systems more effective. 

New rules for pharmacy benefit management companies and insurers 

Several States said they believe PBMs must be included in the definition of third-party 

payer in any legislation or regulation affecting third-party payers. This would alleviate 

difficulties States face in getting these companies to process and pay Medicaid claims. 

Other legislative recommendations were to (1) require all insurers, including self-insured 

employers, to authorize the processing of Medicaid claims, or (2) exempt Medicaid 

claims from authorization requirements. 

States also expressed the opinion that third parties should be required to pay Medicaid 

claims unless the claims are validly denied, making clear to payers and claims processors 

the factors that constitute a valid denial. This would address two problems: (1) the 

problem of third parties not processing Medicaid claims and not providing an 

explanation, and (2) the problem of vague denial codes. 

Medicaid Recovery of Pharmacy Payments 13 OEI-03-00-00030 
RECOMMENDATIONS 

To reduce the dollars at risk of being lost, we offer the following 

recommendations for CMS: 

Waiver. Review States’ cost-avoidance waivers for pharmacy claims to determine if 

they are meeting the cost-effectiveness criterion. Our findings indicate that, overall, pay 

and chase is not a cost-effective policy. The CMS should also review State policies to 

determine if some States are paying and chasing pharmacy claims without a waiver. 

Best Practices. Continue working together with States to identify, develop, and 

disseminate the most successful methods in both avoiding and recovering Medicaid 

pharmacy payments that are the responsibility of liable third parties. 

Tracking. Require States to track the dollar amounts they pay and chase and the 

amounts they recover on pharmacy claims if they have cost-avoidance waivers. This 

information is necessary to determine whether a State’s paying and chasing is cost 

effective. Furthermore, unless States know how much money third parties owe, they 

cannot use their collection resources to the best advantage. 

Claim format. Clarify for States whether claim standardization requirements under the 

Health Insurance Portability and Accountability Act will be applied to pharmacy services 

in a third party environment. Since implementation of these requirements is at least 

1.5 years away, CMS should continue to assist States in seeking immediate remedies to 

get their claims processed. The types of roles CMS might play in this regard could be 

fact finder, technical advisor, or coordinator. 

Education. Develop strategies, on a national level, to educate third parties about 

Medicaid and third-party pharmacy issues. In addition, CMS should collaborate with the 

Department of Labor to develop education targeted specifically to self-insured health 

plans regulated under the Employee Retirement Income Security Act (ERISA). 

Legislation. Determine whether legislation is needed to: 

C explicitly include pharmacy benefit management companies in the Medicaid 

program’s definition of a third party, 

C require third parties to match their eligibility files with Medicaid’s eligibility 

files, and 

C allow Medicaid up to 3 years to recover payments from liable third parties. 

If legislation is determined to be needed, CMS should consider coordinating with the 

Department of Labor to discuss requiring similar items from ERISA-governed health 

plans. 

Medicaid Recovery of Pharmacy Payments 14 OEI-03-00-00030 
AGENCY COMMENTS 

The CMS concurred with our recommendations and stated they are committed to an 

aggressive strategy in resolving the issues and removing the barriers that stand in the way 

of full recovery of Federal and State dollars. They stated that they are planning to 

re-examine States’ cost-avoidance waivers, and that cost avoidance will be emphasized at 

the August 2001 National Third Party Liability Conference. In addition, they have 

worked with States, third parties, and the National Council for Prescription Drug 

Programs to develop a claim format that could be used by Medicaid agencies for 

submitting electronic claims to third parties; and they will advise States of progress made 

by the National Council for Prescription Drug Programs regarding claim standardization 

under the Health Insurance Portability and Accountability Act. The CMS further stated 

they are continuing to help educate PBM’s clients about Medicaid reimbursement issues, 

and have invited the U.S. Department of Labor to attend the August 2001 National Third 

Party Liability Conference. 

The CMS concurred with the premise of our recommendation to require States with costavoidance waivers to track the dollar amounts they pay and chase and the amounts they 

recover on pharmacy claims. The CMS stated that setting up a system to track all 

pharmacy claims may not be the only method to substantiate the cost-effectiveness of a 

waiver. We recognize that this data may not be the sole factor in determining the costeffectiveness of a waiver. However, we still believe that upon receiving a waiver, a State 

should be required to track this information. 

Regarding the need for legislation in the area of third-party liability, CMS will continue 

to review the issues to determine what, if any, legislation is needed. The complete text of 

CMS’s comments are in Appendix D. 

Medicaid Recovery of Pharmacy Payments 15 OEI-03-00-00030 
APPENDIX A 

Technical Terms Used in This Report 

Below is an alphabetical list of some of the technical terms used in this report. 

Cost avoidance: Method for processing claims for Medicaid beneficiaries who have other 

insurance. When Medicaid receives a claim from a provider, the claim is denied and the 

provider is informed that the beneficiary has another insurer who is financially liable for the 

claim. Cost avoidance also occurs when the provider knows of the Medicaid beneficiary’s other 

insurer and sends the claims directly to that other entity and not to Medicaid. 

Cost-avoidance waiver: When a Medicaid agency has been granted a cost-avoidance waiver 

it means that the requirement to use cost avoidance is waived, and the agency may pay for the 

claims and recover the payments from the liable insurers. Waivers are granted if the State can 

show that another method of processing claims is as, or more, cost-effective than cost avoidance. 

Pay and chase: A method for processing claims wherein Medicaid pays the claims for a 

beneficiary who has other insurance and then, later, tries to recover the payments from the liable 

party. 

Pharmacy benefit management company (PBM): Companies that manage prescription 

drug coverage for insurance carriers, self-insured employers, managed care organizations, and 

other entities. Services provided by PBMs include claims processing, pharmacy network 

development, drug utilization review, and formulary development. 

Point-of-sale plan: An insurance plan which has a special electronic claims processing 

arrangement with pharmacies. The arrangement allows pharmacists to determine on-line, while 

a customer is waiting, whether the customer’s insurance plan will pay for the prescription. 

Self-insured plan: Many employer insurance plans are self-insured, i.e., the employer bears a 

portion of the risk for employees’ medical claims. While health insurance plans are usually 

regulated by State Governments, self-insured plans are regulated by the U.S. Department of 

Labor under the Employee Retirement Income Security Act. 

Third party: Any individual, entity, or program that is, or may be, liable to pay all or part of 

the medical cost for any medical benefit provided to a beneficiary. Third parties include private 

insurance plans or carriers, employer insurance plans, State insurance plans such as workers’ 

compensation programs, and Federal insurance programs such as Medicare. In this report the 

term third party also refers to PBMs. 

Third-party liability: A third party’s financial responsibility for medical services provided to 

a Medicaid beneficiary. 

Medicaid Recovery of Pharmacy Payments 16 OEI-03-00-00030 
APPENDIX B 

1999 Medicaid Pharmacy Data for 50 States 

States that pay and chase send claims to third parties they believe are responsible for the claims. 

However, due to Medicaid beneficiaries’ changing coverage, or health plans not covering certain 

services, third parties may deny some of the claims. Therefore, the amount paid and chased for 

third-party pharmacy claims in the table below includes claims that could be denied for valid 

reasons. 

State Total Pharmacy Expenditures Third-party Pharmacy Claims 

Amount Paid and Chased for 

Third Parties 

Amount Recovered from 

AK $45,881,080.83 $5,183,492.88 $817,471.04 

AL $314,946,162.00d $5,018,902.00cd $1,742,770.00cd 

AR $202,913,489.62d $811,127.00d $60,411.00d 

AZ $1,812,951.68 unavailable $141.72 

CA $1,825,318,419.00 unavailable unavailable 

CO $125,412,087.00 unavailable unavailable 

CT $220,673,450.00c unavailable unavailable 

DC $43,419,240.00c unavailable unavailable 

DE $56,065,026.00 unavailable $840,089.46 

FL $1,164,493,522.00 $28,452,000.00b $3,625,500.00b 

GA $439,419,153.00c $21,091,378.38bc $2,277,868.87bc 

HI $52,477,014.00 $1,208.00 $1,208.00 

IA $179,987,630.03 $3,221,655.16 $1,929,713.16 

ID $72,370,224.00 unavailable unavailable 

IL $718,299,628.00d $70,512,870.00d $9,336,728.00d 

IN $407,752,363.00 $27,170,728.00 $2,608,454.00 

KS $152,053,655.00 $2,937,187.00 $885,738.00 

KY $384,078,336.00d $23,899,069.00d $2,143,461.00d 

LA $430,423,799.00 $33,615,322.00 $2,278,064.00 

MA $600,192,000.00c $13,272,730.00ce $1,821,495.00c 

MD $180,000,000.00b unavailable unavailable 

ME $136,637,381.57c $5,090,000.00c $2,100,000.00bc 

MI $353,574,000.00 unavailable unavailable 

MN $215,926,180.34 $4,940,572.17 $2,258,155.66 

MO $468,598,424.00c $9,469,752.00c $1,152,785.00c 

MS $294,754,745.46 $4,604,196.00 $1,594,088.00 

MT $45,500,000.00c unavailable $1,400,000.00bc 

NC unavailable $28,902,407.19 $9,168,690.33 

Medicaid Recovery of Pharmacy Payments 17 OEI-03-00-00030 
APPENDIX B 

State Total Pharmacy Expenditures Third-party Pharmacy Claims 

Amount Paid and Chased for 

Third Parties 

Amount Recovered from 

ND $33,931,400.00 unavailable unavailable 

NE $126,866,802.45 $9,556,047.28 $3,869,239.38 

NH $73,332,966.00d $4,713,111.00d $2,827,866.00bd 

NJ $499,216,374.00cd unavailable unavailable 

NM $41,233,834.16 unavailable unavailable 

NV $41,447,640.91 unavailable unavailable 

NY $2,026,870,651.00c $13,680,000.00b $1,280,000.00b 

OH $831,871,859.89d $3,109,904.11d $59,699.71d 

OK $175,195,447.00d unavailable unavailable 

OR $119,205,296.00 $8,176,048.00 $4,206,869.00 

PA $662,431,412.00c $9,393,597.00 $59,700.00 

RI $79,285,625.88 $221,595.24 $143,580.29 

SC $310,394,000.00 $12,262,009.50 $4,572,710.30 

SD $39,934,762.30d unavailable $421,062.00 

TX $900,000,000.00b $45,000,000.00b $2,800,000.00b 

UT $89,374,417.00c unavailable $2,802,415.26bcd 

VA $323,272,462.00b $11,905,623.00b $1,575,372.00b 

VT $75,241,758.00 $1,586,916.39b $645,293.31b 

WA $339,500,000.00d unavailable unavailable 

WI $298,783,778.00 $23,721,457.00 $4,815,255.00 

WV $196,538,451.09d $8,236,095.00d $387,116.00d 

WY $24,298,621.59b $400,000.00b $128,563.73b 

50a $16,441,207,520.80 $440,157,000.30 $78,637,574.22 

a. We collected data from 49 States and the District of Columbia. Data was not collected from 

Tennessee because their entire Medicaid population is in managed care. 

b. Figure given is an estimate. 

c. Figure given is for the fiscal year. 

d. Figure given includes data for more than outpatient prescription drugs (e.g., inpatient pharmacy, overthe-counter drugs, syringes). 

e. Figure given includes $8,652,082 that Massachusetts deemed “unrecoverable.” 

Source: State Medicaid agency data provided to OIG 

Medicaid Recovery of Pharmacy Payments 18 OEI-03-00-00030 
APPENDIX C 

Medicaid Pharmacy Dollars at Risk for 32 States 

The table below shows the percentage of Medicaid dollars at risk in States that were able to 

provide the dollar amounts they paid and chased as well as the dollar amounts they recovered in 

1999. The table lists States in descending order by total pharmacy expenditures. 

States that pay and chase send claims to third parties they believe are responsible for the claims. 

However, due to Medicaid beneficiaries’ changing coverage, or health plans not covering certain 

services, third parties may deny some of the claims. Therefore, the amount paid and chased for 

third-party pharmacy claims in the table below includes claims that could be denied for valid 

reasons. 

State Total Pharmacy 

Expenditures 

Amount Paid and Chased for 

Third-party Pharmacy Claims 

Amount Recovered 

from Third Parties 

Dollars at 

Risk 

Percent of 

NY $2,026,870,651.00b $13,680,000.00a $1,280,000.00a 91% 

FL $1,164,493,522.00 $28,452,000.00a $3,625,500.00a 87% 

TX $900,000,000.00a $45,000,000.00a $2,800,000.00a 94% 

OH $831,871,859.89c $3,109,904.11c $59,699.71c 98% 

IL $718,299,628.00c $70,512,870.00c $9,336,728.00c 87% 

PA $662,431,412.00b $9,393,597.00 $59,700.00 99% 

MA $600,192,000.00b $13,272,730.00bd $1,821,495.00b 86% 

MO $468,598,424.00b $9,469,752.00b $1,152,785.00b 88% 

GA $439,419,153.00b $21,091,378.38ab $2,277,868.87ab 89% 

LA $430,423,799.00 $33,615,322.00 $2,278,064.00 93% 

IN $407,752,363.00 $27,170,728.00 $2,608,454.00 90% 

KY $384,078,336.00c $23,899,069.00c $2,143,461.00c 91% 

VA $323,272,462.00a $11,905,623.00a $1,575,372.00a 87% 

AL $314,946,162.00c $5,018,902.00bc $1,742,770.00bc 65% 

SC $310,394,000.00 $12,262,009.50 $4,572,710.30 63% 

WI $298,783,778.00 $23,721,457.00 $4,815,255.00 80% 

MS $294,754,745.46 $4,604,196.00 $1,594,088.00 65% 

MN $215,926,180.34 $4,940,572.17 $2,258,155.66 54% 

AR $202,913,489.62c $811,127.00c $60,411.00c 93% 

WV $196,538,451.09c $8,236,095.00c $387,116.00c 95% 

IA $179,987,630.03 $3,221,655.16 $1,929,713.16 40% 

KS $152,053,655.00 $2,937,187.00 $885,738.00 70% 

ME $136,637,381.57b $5,090,000.00b $2,100,000.00ab 59% 

NE $126,866,802.45 $9,556,047.28 $3,869,239.38 60% 

Medicaid Recovery of Pharmacy Payments 19 OEI-03-00-00030 
APPENDIX C 

State Total Pharmacy 

Expenditures 

Amount Paid and Chased for 

Third-party Pharmacy Claims 

Amount Recovered 

from Third Parties 

Dollars at 

Risk 

Percent of 

OR $119,205,296.00 $8,176,048.00 $4,206,869.00 49% 

RI $79,285,625.88 $221,595.24 $143,580.29 35% 

VT $75,241,758.00 $1,586,916.39a $645,293.31a 59% 

NH $73,332,966.00c $4,713,111.00c $2,827,866.00ac 40% 

HI $52,477,014.00 $1,208.00 $1,208.00 0% 

AK $45,881,080.83 $5,183,492.88 $817,471.04 84% 

WY $24,298,621.59a $400,000.00a $128,563.73a 68% 

NC unavailable $28,902,407.19 $9,168,690.33 68% 

32 $12,257,228,247.75 $440,157,000.30 $73,173,865.78 83% 

a. Figure given is an estimate. 

b. Figure given is for the fiscal year. 

c. Figure given includes data for more than outpatient prescription drugs (e.g., inpatient pharmacy, overthe-counter drugs, syringes). 

d. Figure given includes $8,652,082 that Massachusetts deemed “unrecoverable.” 

Source: State Medicaid agency data provided to OIG 

Medicaid Recovery of Pharmacy Payments 20 OEI-03-00-00030 
APPENDIX D 

Centers for Medicare and Medicaid Services’ Comments

Medicaid Recovery of Pharmacy Payments 21 OEI-03-00-00030 
APPENDIX D 

Medicaid Recovery of Pharmacy Payments 22 OEI-03-00-00030 
APPENDIX D 

Medicaid Recovery of Pharmacy Payments 23 OEI-03-00-00030 
APPENDIX D 

Medicaid Recovery of Pharmacy Payments 24 OEI-03-00-00030 
APPENDIX D 

Medicaid Recovery of Pharmacy Payments 25 OEI-03-00-00030