Medicare Compliance & Reimbursement

There's good news and bad news for drugmakers in new rules on Medicaid rebates. Drugmakers will soon be subject to a three-year time limit for submitting drug pricing changes under the Medicaid rebate program. That's the upshot of a final rule the Centers for Medicare & Medicaid Services released Aug. 29. The rule - which finalizes two provisions of a proposal that's been on the books since 1995 - aims to set up procedural requirements relating to drugmakers' recordkeeping and pricing activities. The procedural changes are designed to ease the administrative burden on state Medicaid agencies. The bad news for drugmakers is the price change limit, which essentially narrows their window of opportunity for submitting pricing changes. The good news, potentially, is a second provision of the rule that requires drugmakers to preserve data on pricing and rebates for a period of three years - as opposed to the apparently indefinite record retention period that currently applies. The only exception to the three-year limit involves instances when drug manufacturers are being audited or investigated by the feds. The rule goes into effect Oct. 1, 2003. To see the rule, go to http://www.access.gpo.gov/su_docs/fedreg/a030829c.html.

Lesson Learned: After years of waiting, drugmakers finally have clear guidance on their record retention obligations under the Medicaid drug rebate program.