About the Program

The Medicaid/CHIP Vendor Drug Program (VDP) provides statewide access to covered outpatient drugs for clients enrolled in:

Pharmacy providers that want to participate must enroll prior to providing outpatient pharmacy prescription services.  Pharmacies must also be enrolled with VDP prior to participation in any Medicaid or CHIP managed care health plan network.

All fee-for-service outpatient prescription claims are processed through the VDP online, real-time point-of-sale claim system using the latest National Council for Prescription Drug Programs (NCPDP) telecommunication standard format. All claim submission requirements and guidelines are available in the VDP Pharmacy Provider Procedure ManualPayment is posted weekly. Pharmacy staff can also use our electronic eligibility verification tools to obtain outpatient pharmacy eligibility and managed care plan or prescription benefit information.

VDP staff are available to assist pharmacy providers with claim submittal status and information regarding program policies and procedures. VDP also supports a number of continuing education opportunities. Pharmacy staff and other stakeholders receive updates through our quarterly newsletter and email notification service.

The cost for drug prescriptions in the Texas Medicaid program is shared by the federal government and the state. In order for Texas to receive federal funds assistance for prescription claims, any drugs prescribed must be produced by a drug manufacturer that participates in the Centers for Medicare & Medicaid Services (CMS) drug rebate program. In return for having their drugs covered by state Medicaid programs, the manufacturer agrees to pay rebates according to their state and federal contracts. VDP oversees the collection of these rebates from drug manufacturers.

Federal and state-only drug rebate programs in which Texas participates include the Medicaid Drug Rebate Program; the Supplemental Medicaid Drug Rebate Program; the CHIP Drug Rebate Program; the CSHCN Drug Rebate Program; and the KHC Drug Rebate Program.