Dear State Technical and Rebate Contacts,
State Drug Utilization Data (SDUD) continue to be used as part of the methodology for establishing an annual fee on branded prescription drug manufacturers that was enacted by section 9008 of the Affordable Care Act (ACA). While the Department of Treasury is responsible for imposing these fees, the government drug programs specified in section 9008 (Medicaid, Medicare Part B, Medicare Part D, TRICARE, Department of Veterans Affairs (VA), and the Department of Defense (DOD)) are required to report drug sales information to the Department of Treasury each year so that the fees can be accurately calculated.
For purposes of the Medicaid data, CMS does not want to impose a new reporting requirement on the states as part of this process; therefore, the SDUD that are currently reported under section 1927(b)(2)(A) of the Social Security Act (the Act) are being provided to the Department of Treasury as one element of Medicaid’s drug sales information. If a state has not reported its SDUD, these new fees cannot be appropriately calculated; therefore, timely and complete SDUD reporting is essential to this process. In accordance with section 1927(b)(2)(A) of the Act, states are required to submit all Medicaid SDUD, including physician administered drug utilization and managed care organization (MCO) drug utilization, to CMS within 60 days of the end of each quarter.
Additionally, many states are not applying necessary drug unit conversion factors prior to billing the labeler correctly. Since all Medicaid pharmacy programs are required to invoice for drug rebates for covered outpatient drugs (COD) reimbursed via the pharmacy and medical benefit, this may result in differences between provider billed units (National Council for Prescription Drug Programs (NCPDP) units for pharmacy claims or Healthcare Common Procedure Coding System (HCPCS) units for medical claims) and CMS rebate units.
Please review the SDUD that has been submitted for calendar year 2023 to determine whether any additional submissions or corrections are necessary. MDP supports edits either on-line or via direct file upload any time during the quarter.
All 2023 SDUD corrections should be submitted into MDP, and verified/certified by COB December 30, 2024, in order to be included in the December 31st BPD Data snapshot.
States that fail to update or correct overstated or understated SDUD reported to CMS, may result in compliance action being taken to recover the amount the erroneous data submission caused to be calculated or omitted from the calculation of sales owed to the federal government under the branded prescription drug fee program.
Thank you for your cooperation with this effort. If you have any questions, please feel free to contact us via this email resource box, MedicaidBPD@cms.hhs.gov.
Sincerely,
CMS Medicaid BPD Team