Department of Health and Human Services


OFFICE OF 

INSPECTOR GENERAL 

MEDICAID DRUG PRICE 


COMPARISONS: 


AVERAGE MANUFACTURER PRICE 


TO PUBLISHED PRICES


Daniel R. Levinson


Inspector General 


June 2005 


OEI-05-05-00240

Office of Inspector General 
 http://oig.hhs.gov 

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

as amended, is to protect the integrity of the Department of Health and Human Services 

(HHS) programs, as well as the health and welfare of beneficiaries served by those 

programs. This statutory mission is carried out through a nationwide network of audits, 

investigations, and inspections conducted by the following operating components: 

Office of Audit Services 

The OIG's Office of Audit Services (OAS) provides all auditing services for HHS, either by 

conducting audits with its own audit resources or by overseeing audit work done by others. 

Audits examine the performance of HHS programs and/or its grantees and contractors 

in carrying out their respective responsibilities and are intended to provide independent 

assessments of HHS programs and operations in order to reduce waste, abuse, and 

mismanagement and to promote economy and efficiency throughout the department. 

Office of Evaluation and Inspections 

The OIG's Office of Evaluation and Inspections (OEI) conducts management and 

program evaluations (called inspections) that focus on issues of concern to the 

department, the Congress, and the public. The findings and recommendations contained 

in the inspections reports generate rapid, accurate, and up-to-date information on the 

efficiency, vulnerability, and effectiveness of departmental programs. The OEI also 

oversees State Medicaid fraud control units, which investigate and prosecute fraud and 

patient abuse in the Medicaid program. 

Office of Investigations 

The OIG's Office of Investigations (OI) conducts criminal, civil, and administrative 

investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries 

and of unjust enrichment by providers. The investigative efforts of OI lead to criminal 

convictions, administrative sanctions, or civil monetary penalties. 

Office of Counsel to the Inspector General 

The Office of Counsel to the Inspector General (OCIG) provides general legal services to 

OIG, rendering advice and opinions on HHS programs and operations and providing all 

legal support in OIG's internal operations. The OCIG imposes program exclusions and 

civil monetary penalties on health care providers and litigates those actions within the 

department. The OCIG also represents OIG in the global settlement of cases arising 

under the Civil False Claims Act, develops and monitors corporate integrity agreements, 

develops compliance program guidances, renders advisory opinions on OIG sanctions to 

the health care community, and issues fraud alerts and other industry guidance. 
Δ EXECUTIVE SUMMAR Y 

OBJECTIVE 

To examine the differences between the published prices States use to 

set Medicaid reimbursement rates (i.e., average wholesale price and 

wholesale acquisition cost) and a statutorily defined price calculated 

from actual sales transactions (i.e., average manufacturer price) for 

drugs reimbursed by Medicaid. 

BACKGROUND 

Medicaid expenditures for prescription drugs continue to be a major 

concern to the Administration, Congress, and States; and Medicaid drug 

reimbursement changes are being considered. Most prescription drugs 

reimbursed by Medicaid are dispensed by pharmacies. The Office of 

Inspector General (OIG) has found evidence that Medicaid drug 

reimbursements exceed pharmacies’ actual acquisition costs. 

In general, States reimburse pharmacies for drugs at the lower of 

estimated acquisition cost (EAC) plus a dispensing fee or the 

pharmacy’s usual and customary charge to the public. The EAC is the 

State’s best estimate of the price generally and currently paid by 

providers for the drug. 

States often lack access to drug pricing data based on actual sales and 

instead estimate pharmacy acquisition costs using published prices, 

namely, average wholesale price (AWP) and wholesale acquisition cost 

(WAC). Neither AWP nor WAC are necessarily based on actual sales 

transactions. The AWP is not defined in statute or regulations, and 

until recently, the same was true for WAC. OIG has recommended that 

Medicaid should base reimbursement on pricing data that more 

accurately reflects actual acquisition costs. 

The Average manufacturer price (AMP) is the average price paid by 

wholesalers for drugs distributed to the retail class of trade, net of 

customary prompt pay discounts. The AMP is statutorily defined and 

its calculation is based on actual sales transactions. Drug 

manufacturers must report AMP data for all Medicaid-covered drugs to 

the Centers for Medicare & Medicaid Services (CMS) quarterly as a 

requirement of the Medicaid drug rebate program. Most State Medicaid 

agencies do not have access to AMP data, which is proprietary. 

To explore the potential impact of moving to a sales-based price to 

estimate pharmacy acquisition cost, this inspection compares AMP to 

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EXE CUTIVE S U MMAR Y 

AWP and WAC for national drug codes (NDC) reimbursed by Medicaid. 

We compared AMP to AWP for 24,101 NDCs and AMP to WAC for 

19,475 of those NDCs (4,626 NDCs had an AWP but no WAC value). 

We compared the per unit prices in place on January 1, 2005. We 

calculated median comparisons for all of the NDCs, as well as for each 

drug category: single source (“single source brands”), innovator 

multisource (“multisource brands”), and non-innovator multisource 

(“generics”). This analysis focuses on the comparison of a sales-based 

price to the published prices associated with the drug itself (i.e., the 

“ingredient cost”) and does not address the professional costs associated 

with dispensing the drug or the dispensing fees. 

A companion report, “Medicaid Drug Price Comparison: Average Sales 

Price to Average Wholesale Price” (OEI-03-05-00200), examines the 

differences between average sales price (a statutorily defined price 

based on actual sales and used for Medicare Part B drug 

reimbursement) and AWP. That analysis includes approximately 

2,100 NDCs that are covered by both Medicaid and Medicare Part B. 

FINDINGS 

Average manufacturer price is substantially lower than both average 

wholesale price and wholesale acquisition cost. At the median, AMP 

is 59 percent lower than AWP. Forty-nine States use AWP to estimate 

pharmacy acquisition costs. The median State EAC formula is AWP 

minus 12 percent. For 98 percent of Medicaid-reimbursed NDCs, this 

median State EAC formula would reimburse at a price higher than 

AMP. 

At the median, AMP is 25 percent lower than WAC. Among the eight 

States that use WAC in their EAC, the median State EAC formula is 

WAC plus 8.5 percent. For 96 percent of NDCs, this median EAC would 

reimburse at a price higher than AMP. 

Generic drugs exhibit the largest differences between average 

manufacturer price and the published prices. For generic drugs, 

AMP is 70 percent lower than AWP at the median. In comparison, AMP 

is 23 percent lower than AWP at the median for single source brands 

and 28 percent lower for multisource brands. 

State estimates of pharmacy acquisition cost exceed AMP even among 

States with additional discounts for generics. Seven States use EAC 

formulas that specify a greater discount off AWP for generic drugs than 

brand name drugs. However, these formulas range from AWP minus 

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EXE CUTIVE S U MMAR Y 

20 percent to AWP minus 50 percent, resulting in estimates of 

pharmacy acquisition cost that are higher than the median AMP for 

generics, which is equal to AWP minus 70 percent. 

For generic drugs, AMP is 40 percent lower than WAC at the median. 

In comparison, AMP is 4 percent lower than WAC for single source 

brands and 8 percent lower than WAC for multisource brands at the 

median. 

No States use a WAC-based EAC formula with additional discounts 

taken for generics. State EAC formulas that use WAC range from WAC 

plus 5 percent to WAC plus 12 percent. The median AMP is lower than 

these formulas in all drug categories, but the largest difference is for 

generics where AMP is 40 percent lower than WAC. 

CONCLUSION 

The Administration and Congress have expressed interest in aligning 

Medicaid drug reimbursement more closely with pharmacy acquisition 

cost by using prices based on actual sales rather than published prices. 

OIG has also recommended that Medicaid should base reimbursement 

on pricing data that more accurately reflects actual acquisition costs. 

This inspection provides additional evidence that published prices used 

as a basis for reimbursement are higher than prices based on actual 

sales. AMP, which is calculated based on statute and actual sales 

transactions, is substantially lower than either of the published prices 

(i.e., AWP and WAC). As a result, States’ estimates of pharmacy 

acquisition costs, which are based on AWP and/or WAC, are also 

substantially higher than AMP. These differences are greatest for 

generic drugs. 

Comparing a statutorily defined, sales-based price to published prices 

provides valuable information to those considering the implications of 

changing Medicaid’s drug reimbursement methodology. The substantial 

disparities between AMP and the published prices currently being used 

indicate that changing the basis of Medicaid reimbursement could have 

a significant impact on Medicaid expenditures. 

Agency Comments 

CMS commented that these companion reports make clear that current 

Medicaid payment rules result in overpayments for drugs and 

emphasize the need for reform. CMS stated that Congress should enact 

legislation similar to the reform of Medicare Part B (i.e., switch to ASP 

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as the basis of reimbursement) to ensure that Medicaid payment for 

drugs is related to actual prices paid by pharmacies. 

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Δ T ABLE OF CONTENTS 

EXECUTI VE SUMMARY ......................................... i

INTRODUCTI ON ................................................ 1 

FINDI NGS ....................................................... 9 

AMP is substantially lower than AWP and WAC .............. 9

Generic drugs exhibit the greatest percent differences ......... 11

CONCLUSION .................................................. 15 

END NOTES .................................................... 17 

APPENDI XES .................................................. 20 

A. Key Terms and Acronyms, Distribution Chart............. 20

B. Additional Data Populations: Medicaid-covered Drugs ..... 22

C. Additional Measures: Ranges and Interquartile Ranges .... 23

D. Agency Comments................................... 24

ACKN O W LEDGMENTS ......................................... 27
Δ INTRODU C TION 

OBJECTIVE 

To examine the differences between the published prices States use to 

set Medicaid reimbursement rates (i.e., average wholesale price and 

wholesale acquisition cost) and a statutorily defined price based on 

actual sales transactions (i.e., average manufacturer price) for drugs 

reimbursed by Medicaid. 

BACKGROUND 

All State Medicaid programs include outpatient prescription drug 

coverage, an optional benefit. Nationally, Medicaid spent over 

$34 billion on prescription drugs in 2003.1 Over 41 million beneficiaries 

were enrolled in Medicaid in 2003.2 

Approximately 6 million of these beneficiaries are dually eligible for 

Medicaid and Medicare (dual eligibles).3 Currently, Medicaid provides 

drug coverage for these dual eligibles, but in 2006, coverage for these 

beneficiaries will be transferred from Medicaid to Medicare.4 

Concerns about Medicaid Drug Reimbursement 

Medicaid expenditures for prescription drugs continue to be a major 

concern to the Administration, Congress, and States. The President’s 

2006 budget proposes restructuring Medicaid pharmacy reimbursement 

to save an estimated $542 million in fiscal year (FY) 2006 and 

$15.1 billion over 10 years.5 The House Energy and Commerce 

Subcommittee on Oversight and Investigations held a hearing in 

December 2004 on “Medicaid Prescription Drug Reimbursement: Why 

the Government Pays Too Much” and explored potential reforms.6 

Congress has established a Medicaid commission to provide 

recommendations to achieve $10 billion in overall Medicaid savings over 

the next 5 years and to consider longer-term performance goals and 

recommendations.7 The National Governors Association and National 

Conference of State Legislatures are also working on proposals to 

reduce Medicaid spending, including spending on prescription drugs.8 

The Office of Inspector General (OIG) has found evidence that because 

States lack accurate drug pricing data, Medicaid drug reimbursements 

exceed pharmacies’ actual acquisition costs. OIG has also found that 

Medicaid drug reimbursements exceed the prices paid by other Federal 

programs. OIG has recommended that Medicaid should base 

reimbursement on pricing data that more accurately reflects actual 

acquisition costs.9 

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INTROD UCT ION 

Medicaid Drug Reimbursement 

Drug Cost Reimbursement. 

Most prescription drugs reimbursed by Medicaid are dispensed by 

pharmacies. Within Federal parameters intended to ensure that 

Medicaid acts as a prudent buyer, each State determines its own 

pharmacy reimbursement formula(s).10 In general, States reimburse 

pharmacies for drug costs at the lower of estimated acquisition cost 

(EAC) plus a dispensing fee or the pharmacy’s usual and customary 

charge to the public. Some multiple source drugs (i.e., drugs with 

equivalent generic versions) have a Federal upper limit (FUL) or a State 

maximum allowable cost (MAC). 

The EAC is the State Medicaid agency’s “best estimate” of the price 

generally and currently paid by providers for the drug.11 The Centers 

for Medicare & Medicaid Services (CMS) does not prescribe a method for 

calculating EAC; instead, each State establishes and specifies its own 

EAC formula in its Medicaid State plan. 

Estimating pharmacy acquisition cost presents a challenge for States 

because States lack access to drug pricing information calculated from 

actual drug sales. Instead, States rely on the published prices available 

in drug pricing compendia, despite the previously identified flaws of 

these published prices. 

Forty-nine States (including the District of Columbia) use average 

wholesale price (AWP) minus a discount percentage in their EAC 

formulas. Eight States use wholesale acquisition cost (WAC) plus a 

markup percentage in their EAC formulas. Six of these eight States use 

both AWP and WAC, e.g., “the lesser of AWP minus 12 percent or WAC 

plus 8 percent.” Some States use more complex EAC formulas. For 

example, seven States specify different formulas for brand name drugs 

versus generic drugs. Other States vary their formulas based on the 

pharmacy’s characteristics (e.g., chain versus non-chain pharmacies). 

For certain multiple source drugs that meet specified criteria, CMS sets 

specific Federal upper limit amounts based on the published prices. The 

FUL amount equals 150 percent of the lowest published price of any 

therapeutically equivalent version of the drug published in the national 

pricing compendia.12 Additionally, some States establish MAC 

reimbursement levels at a rate below an established FUL or for drugs 

for which CMS has not set an FUL amount. Thirty-nine States had 

MAC programs as of January 1, 2005.13 

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INTROD UCT ION 

Dispensing Fees. 

In addition to reimbursing pharmacies for the cost of the drug (also 

known as the ingredient cost), States are required to determine 

“reasonable” dispensing fees.14 This fee represents the charge for the 

professional services provided by a pharmacist when dispensing a 

prescription. States’ dispensing fees to retail pharmacies range from 

$2.00 to $12.50.15 

Drug Pricing Data 

Currently, three types of drug pricing data are readily available and 

relevant to the Medicaid program: AWP, WAC, and AMP. A fourth 

price, average sales price (ASP), is used by the Medicare program to

calculate reimbursement amounts for the subset of drugs that are 

covered by Medicare Part B. See Appendix A for a list of key drug 

pricing terms and acronyms and a chart depicting an example of a 

Medicaid drug distribution chain. 

Published prices: AWP and WAC. 

Average wholesale price and wholesale acquisition cost are prices that 

are published in commercial drug pricing compendia by private 

companies, such as First Databank and Medi-Span, based on pricing 

information reported by manufacturers.16 Neither AWP nor WAC are 

necessarily based on actual sales transactions. The AWP is not defined 

in statute or regulations, and until recently, the same was true for 

WAC. The AWP is often considered a price for wholesalers to charge 

retailers. As currently defined in statute, WAC is: 

. . . the manufacturer’s list price for the drug or biological to 

wholesalers or direct purchasers in the United States, not 

including prompt pay or other discounts, rebates or reductions in 

price, for the most recent month for which the information is 

available, as reported in wholesale price guides or other 

publications of drug or biological pricing data.17 

As mentioned earlier, State Medicaid agencies generally use AWP 

and/or WAC to estimate pharmacy acquisition costs for drug 

reimbursement. However, studies, investigations, and audits by OIG, 

the Department of Justice, and others have found that these published 

prices, particularly AWP, substantially overstate the actual prices 

pharmacies pay for drugs. 

Recognizing the flaws of AWP, the Medicare Prescription Drug, 

Improvement, and Modernization Act of 2003, Public Law 108-173, 

changed the basis of Medicare Part B drug reimbursement from AWP to 

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INTROD UCT ION 

ASP, a statutorily defined price calculated from actual sales 

transactions. The Administration has proposed similar reforms for

Medicaid.18

Prices based on actual sales: AMP and ASP. 

Average manufacturer price is the average price paid to the 

manufacturer by wholesalers for drugs distributed to the retail 

pharmacy class of trade minus customary prompt pay discounts. Its 

calculation is statutorily defined and based on actual sales 

transactions.19 Because AMP is calculated from sales that have already 

occurred, it is a retrospective price. 

Drug manufacturers are required to report AMP data for all Medicaidcovered drugs to CMS quarterly as a requirement of the Medicaid drug 

rebate program.20 State Medicaid agencies do not currently have access 

to AMP data, which is proprietary. 

While AMP is statutorily defined, there are some weaknesses associated 

with it. CMS has not issued final regulations regarding AMP 

calculation. The Government Accountability Office (GAO) recently 

released a report on the Medicaid rebate program that found inadequate 

oversight of manufacturers’ AMP calculations and variation across 

manufacturers in how AMP was calculated.21 

Average sales price is also statutorily defined and is based on actual 

sales transactions. It is defined as the manufacturer’s unit sales to all 

purchasers (with certain exceptions) in a calendar quarter divided by 

the total number of units sold by the manufacturer during that same 

quarter, net any price concessions (such as volume, prompt pay, and 

cash discounts), free goods contingent on purchase requirements, 

chargebacks, and rebates (other than Medicaid rebates).22 The ASP 

must be calculated and reported to CMS quarterly for drugs covered by 

Medicare Part B. Most drugs reimbursed by Medicaid are not covered 

by Medicare Part B and do not have an ASP value reported to CMS. 

Companion Report: Average Sales Price to Average Wholesale Price 

OIG is issuing a companion report entitled, “Medicaid Drug Price 

Comparison: Average Sales Price to Average Wholesale Price” 

(OEI-03-05-00200), concurrent with this report. This companion report 

shares a similar objective, i.e., to compare statutorily defined drug 

prices based on actual sales to published prices. The primary difference 

is scope. The companion report analyzes drugs that are covered by both 

Medicaid and Medicare Part B (approximately 2,100 national drug 

codes [NDC]) and focuses on comparing ASP to AWP. In contrast, this 

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INTROD UCT ION

report includes Medicaid-reimbursed drugs (approximately 

24,000 NDCs) and compares AMP to the published prices (AWP and 

WAC). The AMP is the only statutorily defined, sales-based price 

reported to CMS for all drugs in the Medicaid program. 

METHODOLOGY 

National Drug Codes Reviewed 

We focused our analysis on pricing data for Medicaid-reimbursed drugs, 

i.e., the population of NDCs reimbursed by Medicaid during the first 

two quarters of calendar year 2004 (January 1 through June 30, 2004), 

the most recent reimbursement data available. This population 

includes all drugs with an AMP value and at least one other price (AWP 

and/or WAC) in place on January 1, 2005. We used the 11-digit NDCs 

that Medicaid uses to identify unique formulations of each drug, 

including the manufacturer, strength, and package size. This 

population includes 25,560 NDCs. 

In addition, we analyzed pricing data for Medicaid-covered drugs with 

an AMP value and at least one other price (AWP and/or WAC) in place 

January 1, 2005. This population includes additional drugs that 

Medicaid covers but that had no reimbursement from January 1 

through June 30, 2004. This analysis is presented in Appendix B and 

includes 28,557 NDCs. 

Excluded NDCs. 

From our total population of Medicaid-reimbursed NDCs, we excluded 

3 percent of NDCs at both ends of the distribution of AMP to AWP 

ratios. As explained below, this provides a conservative estimate of the 

differences between these prices. Our population for analysis of 

Medicaid-reimbursed drugs includes 24,101 NDCs for the AMP to AWP 

comparisons. Only 19,475 of these NDCs had WAC values and are 

therefore included in the AMP to WAC comparisons. 

At the low end, we excluded all NDCs for which the AWP values were 

less than the AMP values. Approximately 3 percent of Medicaidreimbursed NDCs had AWP values below AMP. In principle, it seems 

unlikely for AWP to be below AMP because AWP is used to represent a 

transaction further down the distribution chain than AMP (see 

Appendix A for an example of the distribution chain). The AMP is an 

average of actual sales from manufacturers to wholesalers. The AWP is 

a published price that is generally used to represent a price for 

wholesalers to charge retailers. While there are known incentives for a 

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INTROD UCT ION 

manufacturer to increase an AWP relative to actual sales prices, there 

are no similar known incentives for a manufacturer to decrease an AWP 

below actual sales prices. It is likely that where AWP is lower than 

AMP, it is the result of a technical error such as a unit definition 

inconsistency, a data timing issue, or a reporting error. 

We also excluded the NDCs at the high end where AWP values exceeded 

AMP by the greatest percentages. Unlike the NDCs where AWP is less 

than AMP, there is no apparent reason to assume that an extremely 

high AWP (relative to AMP) is incorrect and therefore the result of a 

unit definition inconsistency, a data timing issue, or a reporting error. 

However, it is plausible that errors occur with the same frequency at 

the high end of the distribution as at the low end. Therefore, we used a 

3 percent threshold to parallel the exclusion of 3 percent of NDCs at the 

low end. We did this by drug category; i.e., single source (“single source 

brands”), innovator multisource (“multisource brands”), and noninnovator multisource (“generics”); because the distribution of AMP to 

AWP ratios differed substantially by category. CMS designates each 

NDC as single source, innovator multisource, or non-innovator 

multisource in the Medicaid Drug Rebate Initiative files. 

As a result, our calculations may underestimate the extent to which 

AWP exceeds AMP by excluding these NDCs at the high end.

Data Sources 

AMP. 

We used the AMP per unit values that were reported by manufacturers 

to CMS and were in place on January 1, 2005. We obtained this data 

from the Medicaid Drug Rebate Initiative files that CMS uses to 

administer the Medicaid drug rebate program. The AMP values that 

are in place on January 1, 2005, are based on sales from July 1 through 

September 30, 2004, which are reported to CMS by manufacturers by 

October 30, 2004. 

AWP and WAC. 

We used the AWP per unit and the WAC per unit values that were in 

effect on January 1, 2005, as publisheded in First Databank’s National 

Drug Data File. First Databank is the source from which State 

Medicaid agencies typically obtain AWP and WAC data for pharmacy 

reimbursement.23 

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State EAC Formulas. 

We obtained the State EAC formulas that were in effect on January 1, 

2005, from the CMS Web site. CMS compiles this information from 

approved State plans. 

Medicaid Reimbursement Data. 

Overall, we used the Medicaid reimbursement data available on the 

CMS Web site from the State Drug Utilization Files. At the time of our 

analysis, this data had been last updated in February 2005. The most 

recent national data included reimbursement by NDC for the first two 

quarters of calendar year 2004 (i.e., January 1 through June 30, 2004). 

We used this data to define our population of Medicaid-reimbursed 

drugs, to calculate weighted averages, and to identify the top 200 drugs 

based on Medicaid expenditures. We recognize that CMS’s State Drug 

Utilization Files may not contain complete drug reimbursement data, 

but we believe that they are sufficient for purposes of this analysis. 

In addition, we used data from the Medicaid Statistical Information 

System (MSIS) to identify drug reimbursement amounts for Medicaid 

beneficiaries who are not eligible for Medicare (non-dual eligibles). 

While total reimbursement amounts were available through June 2004, 

the most recent MSIS eligibility data to identify non-dual eligibles was 

from FY 2003 for 38 States with MSIS data. We used this data to 

calculate weighted averages based on reimbursement for the non-dual 

eligible population to determine whether the weighted averages would 

differ when limited to this beneficiary subpopulation compared to the 

entire Medicaid beneficiary population. 

Analysis 

For our population of Medicaid-reimbursed drugs, we calculated the 

following ratios by unit prices for all NDCs: (1) AMP to AWP, (2) AMP 

to WAC, and (3) WAC to AWP. For each set of price comparison ratios, 

we calculated the median, average, weighted average, range, and 

interquartile range. The weighted average “weights” each NDC 

according to Medicaid expenditures, i.e., the differences between prices 

for NDCs with higher Medicaid expenditures count more in the 

weighted average than NDCs with lower Medicaid expenditures. The 

interquartile range measures the difference between the 25th and 

75th percentile of the distribution, i.e., the middle 50 percent of the 

distribution. Appendix C provides the ranges and interquartile ranges. 

We made these comparisons for the overall population of MedicaidOE I-05-05-00 240 MEDI C A I D DR U G P R I CE C O M PARI SON S : AVER AGE MA N U FACTUR ER P R I C E T O P UBL I S HED P RIC E S 7 
INTROD UCT ION

reimbursed drugs as well as for each drug category, i.e., single source 

brands, multisource brands, and generic drugs. 

We also conducted this analysis for a subset of drugs with the highest 

Medicaid expenditures. Specifically, we analyzed pricing data for the 

top 200 NDCs by Medicaid expenditures in 2004 for each of 3 categories. 

For State EAC formulas, we calculated the median, mode, and range of 

percent discounts for the 49 States that use AWP in their formula. We 

made calculations specific to brand name drugs and generic drugs 

because seven States have separate formulas for each. We also 

calculated the median, mode, and range of percent markups of WAC for 

the eight States that use WAC in their formulas. These States do not 

distinguish brand name versus generic drugs in their WAC-based 

formulas. 

This analysis focuses on the comparison of a sales-based price to the 

published prices associated with the drug itself (i.e., the “ingredient 

cost”). It does not address the professional costs associated with 

dispensing the drug nor the dispensing fees paid by State Medicaid

agencies in addition to their estimates of pharmacy acquisition cost. 

Limitations 

We intend this inspection to provide information that is useful to those 

who are considering changing the basis of Medicaid reimbursement 

from a published price to a price based on actual sales. However, our 

analysis compares price points and not actual reimbursements. It is a 

theoretical analysis that is useful to estimate the impact of such a 

reimbursement change, but it does not measure the actual impact of 

such a change for three main reasons. First, States do not always 

reimburse at the amount that their EAC formulas would predict.24 

Second, our analysis does not capture the full complexity of Medicaid 

reimbursement, which can include tiered EAC formulas as well as other 

price points (i.e., usual and customary charge, FUL amounts, and State 

MAC amounts). Third, we are comparing published prices and State 

EAC formulas to AMP. However, if the basis of Medicaid 

reimbursement were changed to AMP, it would likely be AMP plus a 

markup percentage. For example, Medicare Part B moved to a salesbased price (i.e., ASP) and reimburses at ASP plus 6 percent. 

Standards 

This inspection was conducted in accordance with the “Quality 

Standards for Inspections” issued by the President’s Council on 

Integrity and Efficiency.

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ΔF I NDING S 

 FINDINGS

Average manufacturer price is substantially 

lower than both average wholesale price and 

wholesale acquisition cost 

For Medicaid-reimbursed drugs, 

AMP is substantially lower than 

either of the published prices, 

namely, AWP and WAC. The AMP 

is also lower than State estimates of pharmacy acquisition costs, which 

incorporate AWP and WAC. 

At the median, AMP is equal to AWP minus 59 percent; in contrast, States’ 

median estimated acquisition cost formula is AWP minus 12 percent. 

At the median of over 24,000 Medicaid-reimbursed NDCs, AMP is 

59 percent lower than AWP. To illustrate this 59 percent difference, for 

one NDC the AMP is $1.07 per pill, while the AWP is $2.61 per pill for 

the same drug. The median AWP-based State EAC formula is AWP 

minus 12 percent. This median State EAC formula would estimate 

pharmacy acquisition cost at $2.30 per pill for this same NDC. 

Forty-nine States estimate pharmacy acquisition cost using AWP minus 

a discount percentage. However, even with the discount percentage, 

AMP is still lower than these States’ estimates of pharmacy acquisition 

cost. The AWP minus 12 percent is the median and is also the most 

common EAC formula based on AWP. 

For 98 percent of Medicaid-reimbursed NDCs, the median State EAC 

formula based on AWP results in reimbursement amounts higher than 

AMP. In other words, AMP is less than AWP minus 12 percent for 

these NDCs. Conversely, for 2 percent of NDCs, the median State EAC 

formula would reimburse at a price below AMP. 

The relationship between AMP and AWP does not change when claims for dual 

eligibles are excluded. In 2006, the drug coverage for beneficiaries who 

are eligible for both Medicare and Medicaid (i.e., dual eligibles) will be 

transferred from Medicaid to Medicare Part D. Thus, we explored 

whether this shift would impact the relationship between AMP and 

AWP. We compared the average difference between AMP and AWP 

accounting for Medicaid reimbursement for all beneficiaries to the 

average difference accounting for reimbursement claims for non-dual 

eligibles only. Despite differences in drug utilization patterns between 

dual eligibles and non-dual eligibles, the relationship between AMP and 

AWP did not change when we excluded claims for dual eligibles.25 

At the median, AMP is equal to WAC minus 25 percent; in contrast, States’ 

median WAC-based EAC formula is WAC plus 8.5 percent. 

At the median of over 19,000 NDCs, average manufacturer price is 

equal to WAC minus 25 percent.26 To illustrate this 25 percent 

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F I NDING S 

difference, for one NDC, the AMP is $1.59 per pill, while the WAC is 

$2.11 per pill. The median State EAC formula (WAC plus 8.5 percent) 

would estimate pharmacy acquisition cost at $2.29 per pill for this NDC. 

Eight States use WAC to estimate pharmacy acquisition cost.27 All of 

these States add a percentage markup to the WAC price, ranging from 

5 percent to 12 percent. WAC plus 8.5 percent is the median. 

For 96 percent of Medicaid-reimbursed NDCs, the median WAC-based 

State EAC formula results in reimbursement amounts higher than 

AMP. In other words, AMP is less than WAC plus 8.5 percent for these 

NDCs. Conversely, for 4 percent of NDCs, the median State EAC 

formula based on WAC would reimburse at a price below AMP. 

At the median, WAC is 22 percent lower than AWP. While AMP is 

considerably lower than both WAC and AWP, the comparisons make it 

clear that WAC is the lower of the two published prices. This is logical 

if WAC is meant to represent an earlier point in the distribution chain 

(prices paid by wholesalers) than AWP (prices paid by retailers). We 

compared WAC to AWP directly to determine how these published 

prices relate to one another. For over 99 percent of NDCs, WAC is lower 

than AWP. At the median, WAC is 22 percent lower than AWP. 

At the median, the AWP and WAC values in the pricing compendium for 

January 1, 2005, had not been updated in more than 2 years. At the 

median, AWP values were last updated 33 months ago, and WAC values 

were last updated 29 months ago according to First Databank’s 

National Drug Data File.28 Overall, NDCs with higher Medicaid 

expenditures were updated more recently. When weighted by Medicaid 

expenditures, the average timespan since the last AWP update is 

14 months; the unweighted average is 43 months. 

In comparison, AMP is calculated and reported to CMS each quarter 

and reflects sales that occurred 6 months prior. As of January 1, 2005, 

only 8 percent of NDCs had AWP values that were updated within the 

prior 6 months. However, these 8 percent of NDCs account for almost 

37 percent of expenditures because the published prices for higher 

expenditure NDCs tend to be updated more frequently than the 

published prices for lower expenditure NDCs. Ten percent of WAC 

values had been updated within the prior 6 months. Similarly, this 

10 percent of NDCs accounted for 37 percent of expenditures. 

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F I NDING S 

Generic drugs exhibit the largest differences 

between average manufacturer price and the 

published prices 

When we analyzed the Medicaidreimbursed NDCs by the three 

drug categories (single source 

brands, multisource brands, and 

generics), we found dramatic differences across the categories. Generics 

demonstrated substantially larger differences between AMP and the 

published prices (AWP and WAC) than either of the brand name drug 

categories. Generic drugs comprise 76 percent of the Medicaidreimbursed NDCs. 

For generic drugs, AMP is 70 percent lower than AWP at the median. 

For generic drugs, AMP is 70 percent lower than AWP at the median. 

In comparison, AMP is 23 percent lower than AWP at the median for 

single source brands and 28 percent lower than AWP for multisource 

brands. Table 1 presents the comparisons of AMP to AWP overall and 

for each drug category. The values indicate the percentage by which 

AMP is lower than AWP. 

Table 1. AMP to AWP Comparisons by Drug Category: AMP = AWP – X%

 Median Average 

Weighted 

Average* 

Single Source Brands 

3,527 NDCs 

23% 25% 24% 

Multisource Brands 

2,356 NDCs 

28% 40% 36% 

Generics 

18,218 NDCs 

70% 65% 74% 

Source: Office of Inspector General, Analysis of Medicaid drug pricing data, 2005. 

*Weighted by Medicaid expenditures. 

The weighted average indicates that, for generic drugs, the disparity 

between AMP and AWP is greater for drugs with higher Medicaid 

expenditures than for drugs with lower Medicaid expenditures. The 

weighted average is weighted by Medicaid expenditures (i.e., NDCs with 

higher Medicaid expenditures count more than those with lower 

expenditures) and thereby links the price differences with Medicaid 

reimbursement. Price and utilization are two important factors that 

may contribute to this pattern for generics. On the one hand, as the 

AWP of a drug increases the reimbursement price based on AWP also 

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F I NDING S 

increases, which could drive expenditures higher. On the other hand, 

high utilization of a drug can lead to both high expenditures on that 

drug and increased incentives to inflate AWP for that drug. 

Notably, brand name drugs do not exhibit this same pattern. For 

brands, the weighted averages are slightly lower than the unweighted 

averages. This indicates that overall the disparities between AMP and 

AWP are not larger for brand name drugs with higher expenditures 

compared to brand name drugs with lower expenditures. 

This is especially true for the top 200 generic drugs by Medicaid 

expenditures. In this subset, AMP is 78 percent lower than AWP at the 

median. In comparison, AMP is 23 percent less than AWP for the top 

200 single source brands, and 28 percent less than AWP for the top 

200 multisource brands. Table 2 displays these comparisons. The 

values indicate the percentage by which AMP is lower than AWP. 

Table 2. AMP to AWP Comparisons for Top 200 NDCs 

by Medicaid Expenditures: AMP = AWP – X%

 Median 

Top 200 NDCs: Single Source Brands 23% 

Top 200 NDCs: Multisource Brands 28% 

Top 200 NDCs: Generics 78% 

Source: Office of Inspector General, Analysis of Medicaid drug pricing data, 2005. 

State estimates of pharmacy acquistion cost exceed AMP even among States 

with additional discounts for generics. Of the 49 States that use EAC 

formulas based on AWP, 7 States specify a greater discount off of AWP 

for generic drugs than for brand name drugs. Among these seven 

States, the EAC formulas for generic drugs range from AWP minus 

20 percent to AWP minus 50 percent. Even with these greater 

discounts, the median AMP (equal to AWP minus 70 percent) remains 

lower than States’ estimated acqusition costs for generic drugs. Table 3 

(on the next page) provides a summary of State EAC formulas for all 

49 States that use AWP as well as the separate generic EAC formulas 

specified by 7 of these States. 

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F I NDING S 

Table 3. State Estimated Acquisition Cost Formulas Based on AWP 

State EAC Formula Median Mode Range 

All States’ formulas 

(49 States) AWP - 12% AWP - 12% AWP - 5% to AWP - 50% 

Generic-specific formulas 

(7 States) AWP - 27% AWP - 20% AWP – 20% to AWP - 50% 

Source: Office of Inspector General, Analysis of State estimated acquisition cost formulas, 2005. 

For generic drugs, AMP is 40 percent lower than WAC at the median. 

The differences between AMP and WAC are also much greater for 

generic drugs than either of the two brand name drug categories. For 

generics, AMP is equal to WAC minus 40 percent at the median. In 

comparison, AMP equals WAC minus 4 percent at the median for single 

source brands and WAC minus 8 percent for multisource brands. 

Table 4 presents the comparisons of AMP to WAC overall and for each 

drug category. The values indicate the percentage by which AMP is 

lower than WAC. 

Table 4. AMP to WAC Comparisons by Drug Category: AMP = WAC – X%

 Median Average 

Weighted 

Average* 

Single Source Brands 

3,502 NDCs 4% 7% 6% 

Multisource Brands 

2,116 NDCs 8% 19% 20% 

Generics 

13,857 NDCs 40% 39% 59% 

Source: Office of Inspector General, Analysis of Medicaid drug pricing data, 2005. 

* Weighted by Medicaid expenditures. 

Again, generic drugs with higher Medicaid expenditures demonstrate 

larger differences between AMP and WAC than generics with lower 

expenditures. The weighted average difference between AMP and WAC 

is greater than the unweighted average (59 percent compared to 

39 percent) for generics. In contrast, for brand name drugs the 

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F I NDING S 

disparity between AMP and AWP is not larger for the drugs with higher 

expenditures compared to the drugs with lower expenditures. 

The top 200 generic drugs by Medicaid expenditures illustrate this 

point, as this subset shows a greater disparity between AMP and WAC 

than the full population of Medicaid-reimbursed generic NDCs. For the 

top 200 generics, AMP is equal to WAC minus 59 percent at the median, 

compared to WAC minus 40 percent at the median for all Medicaidreimbursed generics. 

AMP is much lower than WAC-based State EAC formulas for generic drugs 

compared to brand name drugs. Eight States use WAC to estimate 

pharmacy acquisition cost. None specify a lower WAC-based formula 

for generic drugs compared to brand name drugs. These State EAC 

formulas all include a percentage markup of WAC, ranging from WAC 

plus 5 percent to WAC plus 12 percent. Table 5 summarizes these 

formulas. 

Table 5. State Estimated Acquisition Cost Formulas Based on WAC 

State EAC formula Median Mode Range 

All Drugs (8 States) WAC + 8.5% WAC + 5% WAC + 5% to WAC + 12% 

Source: Office of Inspector General, Analysis of State estimated acquisition cost formulas, 2005. 

The median AMP is lower than these EAC formulas for all three drug 

categories. However, this difference is greatest among the generic 

drugs. For generics, AMP is equal to WAC minus 40 percent at the 

median, while State estimated acquisition costs equal WAC plus a 

markup of 5 to 12 percent. 

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Δ CONCLUSION 

The Administration and Congress have expressed interest in changing 

Medicaid drug reimbursement to align more closely with pharmacy 

acquisition cost by using prices based on actual sales rather than the 

published prices currently used. OIG has conducted numerous reviews 

of Medicaid drug reimbursement and has found that Medicaid drug 

reimbursements exceed pharmacies’ actual acquisition costs and exceed 

prices paid by other Federal programs. OIG has recommended that 

Medicaid should base reimbursement on pricing data that more 

accurately reflects actual acquisition costs. 

This inspection provides additional evidence that published prices are 

higher than prices based on actual sales transactions. We found that 

AMP, which is calculated based on statute and actual sales 

transactions, is substantially lower than either of the published prices 

(i.e., AWP and WAC). As a result, States’ estimates of pharmacy 

acquisition costs, which are based on AWP and/or WAC, are also 

substantially higher than AMP. The differences between AMP and the 

published prices were especially large for generic drugs. 

Our companion report, “Medicaid Drug Price Comparison: Average 

Sales Price to Average Wholesale Price” (OEI-03-05-00200), found 

similar results when comparing ASP, the statutorily defined price used 

for Medicare reimbursement, to AWP. That analysis demonstrated that 

ASP is substantially lower than AWP for the drugs covered by both 

Medicaid and Medicare Part B. 

We intend this inspection to provide useful information to those 

considering the implications of changing Medicaid’s drug 

reimbursement methodology. The substantial disparities between 

prices based on actual sales (AMP and ASP) and the published prices 

currently being used indicate that changing the basis of Medicaid 

reimbursement could have a significant impact on Medicaid 

expenditures. 

Agency Comments 

CMS commented that these companion reports make clear that current 

Medicaid payment rules result in overpayments for drugs and 

emphasize the need for reform. Similar problems with overpayments 

for Medicare drugs led to passage of the MMA provisions that changed 

the basis of reimbursement for drugs from AWP to ASP. CMS 

reiterated that the President’s 2006 budget proposes to solve this 

problem by the use of ASP so Medicaid drug prices will reflect actual 

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C O NCL USIO N 

costs. CMS stated that Congress should enact legislation to ensure that 

Medicaid payment for drugs is related to actual prices paid by 

pharmacies. The full text of CMS’s comments is provided in 

Appendix D. 

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Δ END NOTES 

1 Testimony of Dennis Smith, Director of the Center for Medicaid and 

State Operations, Centers for Medicare & Medicaid Services, on 

Medicaid Prescription Drug Reimbursement before the House Energy 

and Commerce Subcommittee on Oversight and Investigations, 

December 7, 2004. 

2 Centers for Medicare & Medicaid Services. “2003 CMS Statistics.” 

Available online at www.cms.hhs.gov/researchers/pubs/03cmsstats.pdf. 

3 Centers for Medicare & Medicaid Services. “A Strategy for 

Transitioning Dual Eligibles from Medicaid to Medicare Drug 

Coverage.” May 2, 2005. Available online at 

http://www.cms.hhs.gov/medicarereform/strategyforduals.pdf. 

4 Ibid. 

5 United States House of Representatives Committee on the Budget. 

“Analysis of the President’s Budget for FY 2006.” Available online at 

http://www.house.gov/budget/analysisprez021105.pdf. 

6 Testimony transcript available online at 

http://www.oig.hhs.gov/testimony/docs/2004/reeb120704.pdf. 

7 Federal Register Notice. Medicaid Program; Establishment of the 

Medicaid Commission and Request for Nominations for Members. 

CMS-2214-N. 

8 Available online at www.ncsl.org and www.nga.org. 

9 Office of Inspector General reports: “Variations in State Medicaid Drug 

Prices,” OEI-05-02-00681, issued September 2004; “Medicaid 

Pharmacy—Additional Analyses of the Actual Acquisition Cost of 

Prescription Drug Products,” A-06-02-00041, issued September 2002; 

“Cost Containment of Medicaid HIV/AIDS Drug Expenditures,” 

OEI-05-99-00611, issued July 2001. 

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10 Centers for Medicare & Medicaid Services State Medicaid Manual, 

Part 6. Available online at 

http://63.241.27.79/manuals/45_smm/sm_06_6000_to_6400.3.asp. 

11 Centers for Medicare & Medicaid Services State Medicaid Manual, 

Part 6. Available online at 

http://63.241.27.79/manuals/45_smm/sm_06_6000_to_6400.3.asp. 

12 42 CFR § 447.332. 

13 Centers for Medicare & Medicaid Services. “Medicaid Prescription 

Reimbursement by State, Quarter Ending March 2005.” Available at: 

http://www.cms.hhs.gov/medicaid/drugs/pre0305.pdf. 

14 Centers for Medicare & Medicaid Services State Medicaid Manual, 

Part 6. 

15 Centers for Medicare & Medicaid Services. “Medicaid Prescription 

Reimbursement by State, Quarter Ending March 2005.” 

16 Three other drug price compendia are Multim, Gold Standard, and Red 

Book. 

17 Public Law 108-173, Section 303(c)6(B). 

18 Budget of the United State Government, Fiscal Year 2006. Available 

online at http://www.whitehouse.gov/omb/budget/fy2006. 

19 42 U.S.C. § 1396r-8(k)(1). 

20 Ibid. 

21 Government Accountability Office. “Medicaid Drug Rebate Program: 

Inadequate Oversight Raises Concerns about Rebates Paid to States.” 

GAO-05-102. February, 2005. 

22 42 CFR § 414.804(a). 

23 Office of Inspector General. “Variation in State Medicaid Drug Prices.” 

OEI-05-02-00681. September 2004. 

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24 Ibid. 

25 We compared the weighted average price differences based on all 

claims to weighted averages based on claims for non-dual eligibles only 

and found no difference. Weighting by expenditures on non-dual 

eligibles only, AMP is 33 percent lower than AWP on average. 

Likewise, weighting by expenditures on the full Medicaid population, 

AMP is 33 percent lower than AWP on average. 

26 Only 19,475 of the 24,101 NDCs included in the AMP to AWP analysis 

had WAC values listed in the pricing compendium. 

27 Six of these States use WAC in combination with AWP, e.g., “the lesser 

of AWP minus 12 percent or WAC plus 8 percent.” 

28 We rounded to the nearest full month increment. List prices can be 

updated at any time including multiple times within a month. 

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Δ APPENDIX ~ A 

KEY TERMS AND ACRONYMS, DRUG DISTRIBUTION CHART 

Box 1: KEY TERMS AND ACRONYMS 

Average manufacturer price (AMP): The average unit price paid to manufacturers by 

wholesalers for drugs distributed to the retail class of trade minus customary promt pay 

discounts. The AMP is statutorily defined and calculated from actual sales transactions. 

Manufacturers must report AMP to CMS quarterly for the Medicaid drug rebate program. 

Average wholesale price (AWP): A price published in national drug pricing compendia 

issued by private companies such as First Databank and Medi-Span, based on pricing 

information provided by manufacturers. Its calculation is not defined in statute or 

regulation. It is generally considered a price for retailers. 

Estimated acquisition cost (EAC): The State Medicaid agency’s “best estimate” of the price 

generally and currently paid by providers for the drug. Within Federal parameters, each 

State establishes its own EAC formula in its State plan. 

Multisource brand drugs: Innovator multisource drugs. Brand name drugs that have 

generic equivalents. 

National drug code (NDC): The 11-digit code that Medicaid uses to identify unique 

formulations of each drug, including the manufacturer, strength, and package size. 

Generic drugs: Non-innovator multisource drugs. 

Single source brand drugs: Single source drugs. Brand name drugs that have no generic 

equivalents. 

Wholesale acquisition cost (WAC): A price published in national drug pricing compendia 

issued by private companies such as First Databank and Medi-Span. It is now statutorily

defined as the manufacturer’s list price for the drug to wholesalers or direct purchasers in 

the United States, not including prompt pay or other discounts, rebates or reductions in 

price, as reported in wholesale price guides or other publications of drug pricing data. 

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• 

APP E N D I X ~A 

The following chart is a simplified depiction of a typical Medicaid drug 

distribution chain meant to illustrate the relationships among the various 

drugs prices. It is not meant to capture the full complexity of the drug 

distribution chain. 

Chart 1. Medicaid Drug Distribution Chain Example 

Manufacturers 

• Sales-based Price: AMP 

• Published Price: WAC 

Wholesalers 

• Pharmacy’s Actual Acquisition Cost 

• Published Price: AWP 

Retail Pharmacies 

• Reimbursement: EAC (plus dispensing fee) 

Medicaid Agencies 

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Δ APPENDIX ~ B 

ADDITIONAL DATA POPULATIONS: MEDICAID-COVERED 

DRUGS 

In addition to Medicaid-reimbursed drugs, we analyzed the price 

comparisons for the population of Medicaid-covered drugs, including 

those with no reimbursement from January 1 through June 30, 2004. 

The population of Medicaid-covered drugs includes 28,557 NDCs, while 

Medicaid-reimbursed drugs includes 24,101 NDCs. 

We found similar patterns of price differences between AMP and the 

published prices for Medicaid-covered drugs as compared to Medicaidreimbursed drugs. For Medicaid-covered drugs, AMP is 57 percent 

lower than AWP at the median, compared to 59 percent for Medicaidreimbursed drugs. The AMP is 24 percent lower than WAC for 

Medicaid-covered drugs and 25 percent lower than WAC for 

Medicaid-reimbursed drugs. Table 6 displays these results. 

Table 6. Medicaid-covered drugs vs. Medicaid-reimbursed drugs 

AMP = AWP – X% 

Median 

AMP = WAC – X% 

Median 

Medicaid-covered Drugs 57% 24% 

Medicaid-reimbursed Drugs 59% 25% 

Source: Office of Inspector General, Analysis of Medicaid drug pricing data, 2005. 

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Δ APPENDIX ~ C 

ADDITIONAL MEASURES: RANGES AND INTERQUARTILE 

RANGES 

In addition to the median, average, and weighted average, we calculated 

the range and interquartile range for each price comparison. While the 

range measures the difference between the two ends of a distribution, 

the interquartile range measures the difference between the 25th and 

75th percentile of the distribution, i.e., the middle 50 percent of the 

distribution. Table 7 displays these measures for the AMP to AWP 

comparsions, and Table 8 displays results of comparing AMP to WAC. 

Table 7. AMP to AWP Comparisons: AMP = AWP – X%

 Range* Interquartile Range 

All Medicaid-reimbursed Drugs 

24,101 NDCs 

0% to 98% 28% to 83% 

Single Source Brands 

3,527 NDCs 

0% to 65% 22% to 27% 

Multisource Brands 

2,356 NDCs 

0% to 96% 22% to 56% 

 Generics 

18,218 NDCs 

0% to 98% 47% to 87% 

Source: Office of Inspector General, Analysis of Medicaid drug pricing data, 2005. 

* We excluded 3 percent of NDCs at the high and low ends of the distribution. See methodology for details. 

Table 8. AMP to WAC Comparisons: AMP = WAC – X%

 Range* Interquartile Range 

All Medicaid-reimbursed Drugs 

19,475 NDCs (-869%) to 98% 4% to 57% 

Single Source Brands 

3,502 NDCs (-28%) to 57% 2% to 9% 

Multisource Brands 

2,116 NDCs (-86%) to 95% 2% to 29% 

Generics 

13,857 NDCs (-869%) to 98% 14% to 64% 

Source: Office of Inspector General, Analysis of Medicaid drug pricing data, 2005. 

* A negative difference indicates an AMP value greater than WAC. This occurred for 9 percent of NDCs. 

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Δ APPENDIX ~ D 

AGENCY COMMENTS 

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APP E N D I X ~D 

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A APP P PEN E N DD I X ~A I X ~ D

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Δ ACKNOWLEDGMENTS 

This report was prepared under the direction of William C. Moran, 

Regional Inspector General for Evaluation and Inspections in the 

Chicago regional office, and Ann Maxwell, Assistant Regional Inspector 

General. Other principal Office of Evaluation and Inspections staff who 

contributed include: 

Erin Lemire, Project Leader 

Tom Komaniecki, Senior Program Analyst 

Louise Schoggen, Intern 

Linda Boone Abbott, Program Specialist 

Tricia Davis, Director, Medicare and Medicaid Branch 

Technical Assistance 

Scott Horning, Program Analyst 

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