Drug Manufacturer Manual

Last Updated

M-1. Introduction

M-1.1 Mission Statement

The mission of the Texas Vendor Drug Program is to:

  • Provide statewide access to covered outpatient drugs and quality pharmaceutical care for people enrolled in Medicaid, the Children’s Health Insurance Program (CHIP), the Children with Special Health Care Needs (CSHCN) Services Program, the Healthy Texas Women’s Program (HTW), and the Kidney Health Care Program (KHC), efficiently and cost-effectively;
  • Manage the drug formulary, preferred drug list (PDL), clinicianadministered drug program, and rebate programs, to maximize revenue; 
  • Manage the Texas Medicaid Electronic Health Record Incentive/Promoting Interoperability Program, providing incentive payments to eligible Medicaid providers and hospitals when they adopt and meaningfully-use certified electronic health record technology.

M-1.2 About this Manual

This document assists manufacturers with Texas Medicaid processes for formulary additions, billing, and federal and supplemental rebate programs. Manufacturers are responsible for ensuring compliance with federal and state processes.

M-1.3 Rules and Statutes

Texas Medicaid is subject to federal and state policies, procedures, rules, and regulations, among them:

  • Texas Administrative Code
    • A compilation of all agency rules in Texas
  • Texas Government Code
    • The codification of the state government's general and permanent statutes
  • United States Code of Federal Regulations
    • The codification of the general and permanent rules and regulations published by the executive departments and agencies of the federal government of the United States

Refer to these rules and statutes on the VDP website Rules and Statutes page (txvendordrug.com/about/rules).

M-1.4 Communication

M-1.4.1 Email Notification Service

The HHSC email notification service sends announcements to subscribers about VDP news and information. To receive messages, you must provide the following information:

  • email address
  • delivery preference (immediate, daily, or weekly updates)
  • password (optional)

Subscribers then select the topics of subscriptions they want to receive. After subscribing, the service sends a validation email to your email account. You may change your subscription profile or unsubscribe from any mailing list at any time.

M-2. Contact Information

M-2.1 CHIP

Mailing address

Attn: Texas Contract Manager

RE: CHIP Rebate Program

Magellan Medicaid Administration

11311 Cornell Park Drive, Suite 102

Blue Ash, OH 45242

Telephone

(513) 774-8500

M-2.2 CSHCN Services Program

Mailing address

Office of Primary and Specialty Health

Children with Special Health Care Needs Services Program

P.O. Box 149347, MC 1938

Austin, TX 78714-9347

Overnight address

Office of Primary and Specialty Health

Children with Special Health Care Needs Services Program

1100 W. 49th Street, MC 1938

Austin, TX 78756

M-2.3 HTW Program

Mailing address

HTW Program

Vendor Drug Program, MC 2250

701 W. 51st St., Austin, Texas 78751

Telephone

512-776-7796

M-2.4 KHC Program 

Mailing address

Office of Primary and Specialty Health

Kidney Health Care Program

P.O. Box 149347, MC 1938

Austin TX 78714-9347

Overnight address

Office of Primary and Specialty Health

Kidney Health Care Program

1100 W. 49th Street, MC 1938

Austin, TX 78756

Telephone

1-800-222-3986

M-2.5 Bankruptcy Proceeding Correspondence

Mailing address

Attention: VDP Drug Rebates

Accounts Receivable Tracking System (BH-1470)

Texas Health and Human Services

P.O. Box 149055, Austin, Texas 78714

Overnight address

Attention: VDP Drug Rebates

Accounts Receivable Tracking System (BH-1470)

Texas Health and Human Services

701 W. 51st St., Austin, Texas 78751

M-2.6 Manufacturer Payments

Manufacturers should include the invoice number as found on their invoice when issuing payment.

Mailing Address

Texas Health and Human Services

HHSC AR MC1470; Attn: Medicaid Drug Rebates

P. O. Box 149055, Austin, TX 78714-9055

Overnight Mailing Address

Texas Health and Human Services

HHSC AR MC1470; Attn: Medicaid Drug Rebates

4601 W. Guadalupe Street, Austin TX, 78751

M-2.7 Manufacturer Pricing

Rebate agreements requiring drug manufacturers to provide pricing data to the state on a quarterly basis.

Medicaid

Manufacturers send revised AMP listings (prior period AMP pricing adjustments from any subsequent quarter) to Magellan Medicaid Administration.

Email

  • Arianna Rhine: rhinea@magellanhealth.com
  • Courtney Creech: crcreech@magellanhealth.com

CHIP, CSHCN Services Program

Manufacturers send the quarterly AMP and best price or the calculated Unit Rebate Amount reporting to Conduent.

Mailing Address

Texas Contract Manager

Conduent Pharmacy Rebate Operations

12365A Riata Trace Parkway, Austin, TX 78727

Email

PCRA-RateFiles@conduent.com

All Programs AMP

Manufacturers send quarterly pricing to HHSC if the AMP pricing was not available at the time of submittal of the electronic Certificate of Information (eCOI) or within 10 days of HHSC’s request.

Email

vdp-formulary@hhsc.state.tx.us

M-2.8 Quarterly Pricing Correspondence

Mailing address

Texas Contract Manager

Conduent Pharmacy Rebate Operations

12365A Riata Trace Parkway, Austin, TX 78727

Email

Antoine.Nelson@conduent.com

PCRA-RateFiles@conduent.com

vdp-rebates@hhsc.state.tx.us

M-3. Drug Approval

M-3.1. Centers for Medicare and Medicaid Services

The Medicaid Drug Rebate Program (MDRP) is an arrangement between Centers for Medicare & Medicaid Services (CMS), state Medicaid agencies, and participating drug manufacturers. The MDRP partially offsets the federal and state costs of most outpatient prescription drugs dispensed to Medicaid beneficiaries. Manufacturers must enroll with CMS and sign agreements to pay rebates on all drugs dispensed to people enrolled in Medicaid before HHSC considers the drug for inclusion on the Texas Medicaid formulary. HHSC requires a CMS-approved National Drug Rebate Agreement (NDRA) to commence the certificate of information process.

Refer to the Medicaid NDRA information at medicaid.gov/medicaid/prescriptiondrugs/medicaid-drug-rebate-program/medicaid-national-drug-rebateagreement/index.html for instructions on participating in the MDRP.

M-3.1.1. Reporting Requirements

To maintain Drug Data Reporting (DDR) status with CMS, manufacturers must report initial product and pricing information to CMS on all covered outpatient drugs within 30 days of the end of the month and quarter of the optimal effective date.

Each month and quarter, manufacturers must submit pricing data to CMS within 30 days of the end of each respective monthly and quarterly period and should be updated as often as necessary. Manufacturers should report or update product data and pricing corrections as soon as they become available to CMS. When a manufacturer markets a new drug, they should submit information to the Medicaid DDR system to ensure the United States Food and Drug Administration (FDA) lists the drug.

Refer to the Federal Register's Announcement of Medicaid Drug Rebate Program National Rebate Agreement (March 2018) (https://www.federalregister.gov/documents/2018/03/23/2018-05947/medicaid-program-announcement-of-medicaid-drug-rebate-program-national-rebate-agreement) to learn more.

M-3.2. Texas Drug Code Index

After completing the Medicaid NDRA with CMS, manufacturers must complete the Texas Drug Code Index (TDCI) Certification of Information (COI to request the addition of the drug on the Medicaid and CHIP formularies.

Refer to 1 TAC Section 354.1921 (Addition of Drugs to the Texas Drug Code Index) on the VDP website "Texas Administrative Code" page for more information.

Beginning April 1, 2021, drug manufacturers must use the browser-based electronic COI portal to submit their requests. Drug manufacturers must register for the ECOI portal using the ECOI Portal Access (HHS Form 1403).

Manufacturers use the ECOI portal when their drug is new to the market, an existing drug on the TDCI has a new formulation, or there are labeler changes. Manufacturers with products on the TDCI are responsible for using the ECOI to report these changes no later than the date the manufacturer schedules the revisions to occur.

Drugs submitted through the ECOI portal should include the manufacturer's name on the label of the container sold to the pharmacy and the NDC of the company holding the drug as its own. All drugs on the TDCI must bear the FDA-defined labeler code, except for licensed full-service drug wholesalers marketing the final sale to the provider.

Texas HHS requires the following information when considering a drug for inclusion on the TDCI:

Refer to the Drug Addition Process for the timelines and processes HHSC staff follow to add drugs to the TDCI and to add clinician-administered drugs through the medical benefit.

M-3.2.1. Acceptance to Medicaid and CHIP

HHSC will review the drugs submitted through the ECOI portal. Refer to the ECOI User Guide for detailed instructions about creating a new COI application, updating the COI after submission, and correct a returned COI application.

We use the National Average Drug Acquisition Cost (NADAC) to calculate pharmacy reimbursement in traditional Medicaid. If a manufacturer leaves a price field blank within the "Pricing Information" section of the ECOI, we will interpret this to mean the product does not have a price. Manufacturers should provide HHSC with their product's average manufacturer price (AMP) at the product's initial launch.  If you do not, we require you to give the AMP within 30 days after the close of the calendar quarter when you calculate the AMP.

Manufacturers must provide pricing for any of the prices below within 10 days upon HHSC's request.

Manufacturers submit the following materials through ECOI portal, if applicable: 

  • FDA new drug application approval letter 
  • FDA abbreviated new drug application approval letter 
  • FDA over-the-counter monograph
  • Copy of package insert 
  • Copy of Certificate of Liability Insurance 
  • Promotional material for physicians, if available
  • Other additional applicable documents supporting responses, if available

Manufacturers must certify all drug information submitted through the ECOI is correct, and the product does not violate federal or state laws.

Manufacturers including false or incomplete information as part of their ECOI submission may be liable for civil or criminal penalties under state law, including Texas Human Resources Code, sections 36.052 and 37.10.  The individual submitting drugs in the ECOI must acknowledge the manufacturer's obligation to update HHSC with changes to formulation, product status, or availability as required by 1 TAC Section 354.1921(c)(2) (Addition of Drugs to the Texas Drug Code Index). Further, the individual submitting through the ECOI must acknowledge the manufacturer's obligation to submit changes to the prices requested in the "Price Certification" section of the ECOI if requested by HHSC, by the tenth business day of the request as required by 1 TAC Section 354.1921(c)(2). Refer to the VDP website Texas Administrative Code page (txvendordrug.com/about/rules/texas-administrative-code) for more information.

The drug review process takes up to 90 days once the submission is complete. If approved, HHSC adds the drug to the Medicaid formulary.  If CHIP policy allows the drug, then we will also add it to the CHIP formulary. We will provide the manufacturer with one of the following responses:

  • We approved your drug and the date we added it to the formulary
  • We denied your drug and an explanation why 

M-3.2.2. Acceptance to CSHCN Services Program

The Children with Special Health Care Needs Services Program is a comprehensive health benefits plan for low-income children with special health care needs. The program has an open formulary like Medicaid and is the payer of last resort for approximately 2,300 eligible people.

Refer to the contact information for questions related to program formulary coverage.

M-3.2.3. Acceptance to Healthy Texas Women Program

The HTW Program provides access to women's health and family planning services at no cost to eligible women in Texas. The program serves approximately 300,000 people annually. Women eligible for the HTW Program are:

  • At or below 200 percent of the federal poverty level Age 15 – 44
  • Not pregnant
  • Texas residents
  • United States citizens or qualified immigrants

The HTW Program is jointly funded by the state and federal governments.

HHSC must add the drug to the Medicaid formulary before adding it to the HTW formulary. 

The HTW drug rebate program covers products in the program. Participation in the rebate programs for HTW varies depending on the budget source used to pay for the original claim or encounter eligible for a rebate.

  1. Claims and encounters for clients under 18 (Rebate Programs called TWHP) are paid by the State of Texas General Revenue funding. Participation in this rebate program is voluntary with some exceptions.
  2. Claims and encounters for postpartum clients (Rebate Programs called HTW+) are paid by State of Texas General Revenue funding. Participation in this rebate program is voluntary with some exceptions.
  3. Claims and encounters for clients 18 and over (Rebate Program called HTW) are paid with Federal Funding and are subject to CMS federal rebate rules. Participation in this rebate program is mandated if the manufacturer has signed a National Drug Rebate Agreement with CMS.

Beginning Feb. 18, 2020, HHSC and CMS agreed to provide comprehensive women's health services through a Medicaid demonstration waiver over the next five years.

Refer to the contact information for questions related to program formulary coverage.

M-3.2.4. Healthy Texas Women Plus

The Healthy Texas Women Plus Program is an enhanced postpartum care services package for women in the HTW Program. The state-funded program began on Sept. 1, 2020.

HTW Plus services focus on treating major health conditions recognized as contributing to maternal morbidity and mortality in Texas, including postpartum depression and other mental health conditions, cardiovascular and coronary conditions, and substance use disorders, including drug, alcohol, and tobacco use. Eligible individuals meet the standard HTW eligibility criteria and have been pregnant 12 months before HTW enrollment.

M-3.2.5. Acceptance to Kidney Health Care Program

The Kidney Health Care Program is a CMS-designated State Pharmaceutical Assistance Program (SPAP) providing drug reimbursement for approximately 20,000 kidney dialysis and transplant patients. The program is one hundred percent state-funded. Its formulary is a closed formulary and contains medications related to end-stage renal disease. HHSC gives priority to manufacturers with signed rebate agreements.

Refer to the contact information for questions related to program formulary coverage.

M-4. Federal and State Rebate Invoicing

CMS sends Texas quarterly updates to the Unit Rebate Amounts (URA) for each manufacturer, approximately forty-five days after the end of the calendar year quarter. URAs are computed by CMS based on information submitted by manufacturers. The Texas VDP rebate system loads all drug data and manufacturer information from CMS. 

HHSC computes URAs for the CHIP, CSHCN, HTW, and KHC programs separately, and loads the information into the rebate system from separate files (see section 4). 

HHSC invoices manufacturers for rebates on all fee-for-service (FFS) claims and managed care encounters loaded into the rebate system every quarter. CMS requires the generation and transmission of federal rebate invoices within 60 days after the end of each calendar quarter. Supplemental rebate invoices are generated and transmitted 75 days after the end of each calendar quarter. 

Drug rebate invoices are calculated based on 11-digit NDCs, drug quantity units on paid claims (original, coordinated, and adjusted claims), URA, interest owed, and prior period adjustments (PPA). Manufacturers request claim level detail to confirm utilization by contacting Conduent State Healthcare, the VDP pharmacy claims and rebate administration vendor, at PCRA_CLDandDisputes@Conduent.com. 

An invoice is created for each program. Applicable program names and descriptions are included in the title of the invoice. Refer to the list of program names (as of Sept. 1, 2020).

Program Name Program Description
TXMED Fee-for-Service Medicaid pharmacy claims
TXSUPP Supplemental Fee-for-Service Medicaid pharmacy claims
TXEFMAP Fee-for-Service Medicaid pharmacy claims based on special grant requirements
TXEFMAPSUP Supplemental fee-for-service Medicaid pharmacy claims based on special grant requirements
TXMCO Managed care Medicaid pharmacy claims
TXMCOSUP Supplemental Medicaid managed care pharmacy claims
TXMCOEFMAP Managed care Medicaid pharmacy claims based on special grant requirements
TXMCOEFMAPSUP Supplemental Medicaid managed care pharmacy claims based on special grant requirements
TXJCODE Drugs extracted from fee-for-service Medicaid medical claims
TXMCOJCOD Drugs extracted from Medicaid managed care medical claims
TXEFMAPJCOD Drugs extracted from Medicaid Fee-for-service Medical Claims based on Special Grant Requirements
TXMCOEFMAPJC Drugs extracted from Medicaid managed care medical claims based on special grant requirements
CNSF Children’s Health Insurance Program (CHIP) Not State Funded
BCCP Fee-for-service breast and cervical cancer pharmacy claims
KHC Kidney Health Care Program
CSHCN Children with Special Health Care Needs Services Program
TWHP Texas Women’s Health Program.  The state-funded portion of the Healthy Texas Women’s Program serving women under 18 years of age.
TXMCOBCCP TXMCOBCCP
HTW Healthy Texas Women Program.  The federally funded portion of the Healthy Texas Women’s Program subject to CMS rebate rules serving women 18 years of age and older.

M-5. Payment of Invoices and Dispute Resolution

Once a manufacturer has received an invoice, payment is due to HHSC within 38 days from receipt of the invoice, to avoid incurring interest. Two CMS forms are required when submitting payment or disputing an invoice:

  • Reconciliation of State Invoice (Form CMS-304)
  • Prior Quarter Adjustment Statement (Form CMS-304a)

Both forms are submitted with payment to identify where the payment is applied in the rebate system. Refer to the Rebate Administration forms for copies of the forms.

M-5.1 Reconciliation of State Invoice

Use the ROSI to respond to Texas when: 

  • Disputing invoiced units
  • State invoice contains zero URAs
  • Documenting invoice(s), program(s) and amount(s) to be paid, even if the state invoice contains zero URAs

Manufacturers must remit accurate rebate payments, and the current URA must be applied to the units paid. 

M-5.2 Prior Quarter Adjustment Statement

Use the PQAS to uniformly explain prior quarter payments or disputes. The PQAS may accompany the ROSI or submitted separately.  Submit both forms with rebate payments or payment adjustments for all prior quarters.

The PQAS is used for reporting all prior quarter actions, including invoiced unit changes, prior disputed unit adjustments, and other information. Complete a separate quarter-specific PQAS for each prior quarter reconciled and submit the completed PQAS with the payment/credit for all prior quarters.

If the manufacturer completes and submits the PQAS with the ROSI, the amount of the remittance must equal the total remittance shown on the ROSI, plus or minus the total remittance on the PQAS. An explanation of any interest payment must accompany the submission.

A PQAS is submitted in the required format, in paper form or electronically, depending on the manufacturer’s capabilities. No additional information is entered on the form itself and all information must be included unless instructed in the data definitions found on the form.

Payment packages received from a manufacturer are allocated to the respective 11digit NDCs invoiced for all rebate programs. Invoices are compared to the ROSI and/or PQAS forms returned by the manufacturer with the payment to identify which NDC 11-digit line items are different from the invoice or are in dispute.

The Medicaid Drug Rebate Data Guide for Manufacturers has complete instructions for ROSI and PQAS submittal and reporting requirements for manufacturers participating in the CMS MDRP.  

The guide is part of the DDR for Medicaid System and accessible after registering with CMS and signing an NDRA. Contact CMS at DRP@cms.hhs.gov for access to the DDR system or questions about the ROSI or PQAS forms.

Refer to the Manufacturer Payments section for contact information. Payments must include the invoice number, as indicated on the invoice.

M-5.3 Dispute Resolution

Manufactures submitting a check for payment of their current invoice must include a ROSI documenting the invoice, program, and amounts to be applied. A PQAS should also accompany the payment when the prior quarter is paid.

Once received, check amounts are allocated at the NDC 11-digit level by the drug rebate system. If the check is not fully allocated then the rebate system lists the line items in dispute. Next, an extract from the rebate system is pulled containing claim details for disputed NDCs and automatically provided to the manufacturer. It is the manufacturer’s responsibility to review the claim detail extract and provide any additional information to resolve the dispute. When resolving disputes, the manufacturer must:

  • Contact CMS to correct any discrepancies in the URA submitted to CMS  
  • Correct the ROSI or PQAS form and resubmit it to Conduent if there are any discrepancies in the URA 

Discrepancies regarding units dispensed are resolved on a case-by-case basis by Conduent in collaboration with the manufacturer. Direct questions involving dispute resolution to Conduent.

M-6. Rebate Programs

M-6.1 Supplemental Rebate Program

HHSC created the Supplemental Drug Rebate Program in conjunction with the Preferred Drug List (PDL). The PDL is a list of medications recommended by the Texas Drug Utilization Review (DUR) Board and approved by the HHSC Executive Commissioner. The DUR Board considers the drug’s efficaciousness, clinical significance, cost-effectiveness, and safety when making recommendations to add drugs to the PDL. The PDL is published in January and July of each year. Medications designated as non-preferred on the PDL require prescribing providers to obtain prior authorization.

The DUR Board meets quarterly to develop criteria and standards impacting Texas Medicaid, including:

  • Developing and submitting recommendations to the PDL
  • Suggesting clinical prior authorizations on outpatient prescription drugs
  • Recommending educational interventions for Medicaid providers
  • Reviewing drug utilization across the Medicaid program

The HHSC PDL vendor notifies manufacturers of drug classes scheduled for review before each quarterly DUR Board meeting. A solicitation list is created using all the branded products on the drug class list, as well as some generic exceptions, and manufacturers' contact information is obtained from signed supplemental rebate contracts.  

Submit the Manufacturer Contact Form to request an addition to the solicitation list. The HHSC PDL vendor distributes the solicitation list to manufacturers approximately 3 months before each DUR Board meeting. This provides an opportunity for manufacturers to submit a supplemental rebate offer based on a Guaranteed Net Unit Price (GNUP), valid for 12 months. Download the form at txvendordrug.com/resources/downloads.

  • GNUP is equal to the Wholesaler Acquisition Cost (WAC) price per unit minus the Federal Unit Rebate Amount (FURA) minus the Supplemental Unit Rebate Amount (SURA).

Once HHSC makes a final decision on PDL composition, contracts are forwarded to the manufacturers for signature. HHSC signs and executes the completed contracts received from manufacturers.

M-6.2 CHIP Drug Rebate Program

Complete the CHIP Drug Rebate Agreement (HHS Form 1337) and return two originals to the Texas Contract Manager to participate in the rebate program. Drug manufacturers must submit quarterly pricing data to HHSC as stated in their signed agreements.

M-6.3 Healthy Texas Women Program

The HTW program determines which Medicaid drugs are included as part of the HTW and HTW Plus formulary.  HHSC undertakes a quarterly formulary review, the results of which are submitted to the HTW Program. HTW program staff review the list of drugs and identifies those for inclusion on the HTW formulary. 

Participation in the rebate programs for Healthy Texas Women varies depending on the budget source used to pay for the original claim or encounter eligible for a rebate.

  1. Claims and encounters for clients under 18 (Rebate Programs called TWHP) are paid with State of Texas General Revenue funding.  Participation in this rebate program is voluntary with some exceptions.
  2. Claims and encounters for postpartum clients (Rebate Programs called HTW+) are paid with State of Texas General Revenue funding.  Participation in this rebate program is voluntary with some exceptions.
  3. Claims and encounters for clients 18 and over (Rebate Programs called HTW) are paid with federal funding and are subject to CMS Federal rebate rules.  Participation in this rebate program is mandated if the manufacturer has signed a National Drug Rebate Agreement with CMS. 

Manufacturers with questions related to program formulary coverage, refer to Table 5 for contact information. 

M-6.4 Kidney Health Care Program

The KHC Program is mandated by the Legislature to have a rebate agreement with the manufacturer before a drug is added to the formulary

Manufacturers participating in the MDRP as an approved SPAP can exclude prices to SPAPs from their Medicaid Best Price calculations. This allows the State to use the full CMS rebate rate to simplify the paperwork for both the State and the manufacturer. All rebate money collected for KHC drug claims is returned to the program for client services.

Complete the KHC Program Drug Rebate Agreement (HHS Form 1329) and return two originals to the KHC program to participate in the rebate program. 

M-6.5 CSHCN Services Program

Complete the CSHCN Services Program Drug Rebate Agreement (HHS Form 1343) and return two signed original copies to the CSHCN Services Program to participate in the rebate program.

Drug manufacturers must submit quarterly pricing data to HHSC as stated in their signed agreements (see Table 7).

M-7. Value-Based Agreements

HHSC can enter into a value-based agreement by written agreement with a drug manufacturer, based on outcome data or other metrics to which HHSC and the drug manufacturer agree in writing. The value-based agreement is a written agreement linking payment for a drug or product to its value and is consistent with federal and state law and approved by CMS as part of the Medicaid state plan. Agreements may include things of value, including, but not limited to:

  • Rebates
  • Discounts
  • Price reductions
  • Contributions
  • Risk sharing
  • Reimbursements
  • Payment deferral or installment payments
  • Guarantees
  • Patient care
  • Shared savings payments
  • Withholds
  • Bonuses

Refer to the Value-Based Agreement Concept (HHS Form 1402) to submit a proposal.

M-8. 340B Program

Section 340B of the Public Health Services Act (42 U.S.C-256b) requires drug manufacturers to provide outpatient drugs to eligible healthcare organizations or covered entities at significantly reduced prices. This program enables covered entities to purchase drugs at discounted prices and use the remaining funds to provide comprehensive services to eligible people. This policy also allows insurers, including Medicaid, to share in the savings generated by the 340B Program.

To prevent duplicate discounts and ensure manufacturers are not invoiced for claims submitted using 340B drugs:

  • Outpatient pharmacies submit a value of “2Ø” (340B / Disproportionate Share Pricing/Public Health Service) in the “Submission Clarification Code” field (42Ø-DK) for all pharmacy claims
  • Prescribers submit a Healthcare Common Procedure Coding System (HCPCS) code, 11-digit NDC, NDC unit of measure, NDC quantity, and modifier value of “U8” for medical claims including clinician-administered drugs 

Only claims submitted with these values are excluded from the drug rebate system invoicing process. If claims are not submitted with these values and HHSC invoices for rebates, then contracted entities such as pharmacies or medical facilities must resolve the dispute with the manufacturer.

HHSC does not approve alternative arrangements for preventing duplicate discounts. The drug rebate system relies on the correct submitted values to identify claims excluded from the rebate invoicing process.  

Refer to the “340B Providers” page on the VDP website at txvendordrug.com/providers/340b-providers.

M-9. Bankruptcy

HHSC pursues collection efforts when CMS terminates a manufacturer’s drug rebate agreement because of bankruptcy. Manufacturers should notify us within 10 business days of filing bankruptcy proceedings.

Refer to the Bankruptcy Proceeding Correspondence section to notify HHSC.

M-10. Documents and Forms

M-10.1.2. Forms

HHSC uses forms for pharmacy enrollment, registering for special system access, requesting prior authorization for drugs, and conducting other business. Refer to the pages in this section for lists of forms by topic.  Each form has unique completion and submission instructions.

Refer to the File Viewing Information (hhs.texas.gov/file-viewing-information) if you have difficulties viewing or downloading forms.

M-10.1.2.2. Drug Rebate Agreements