Rebate Programs

Affiliated Computer Services (ACS), operating as Xerox-Pharmacy is the Vendor Drug rebate administrator for the Medicaid, Children's Health Insurance Program (CHIP), Kidney Health Care (KHC) Program, Children with Special Health Care Needs (CSHCN) Services Program, and supplemental rebate programs.

Medicaid Drug Rebates

Created by the Omnibus Budget Reconciliation Act (OBRA) of 1990 and amended by OBRA 1993, the Veterans Health Care Act of 1992, the Deficit Reduction Act of 2005 and the Affordable Care Act of 2010 the Medicaid drug rebate program requires drug manufacturers to sign a rebate contract with the Center for Medicare and Medicaid Services’ (CMS).  Manufacturers must pay rebates to the states based on the number of units of their product that was paid for by the state, and the states in turn, must cover the drug manufacturers' products.

The drug rebates apply to drugs supplied to Medicaid clients either through a contracted pharmacy, or a administered by a contracted physician/clinician.  The Medicaid client can be in either Fee for Service or in managed care.

Supplemental Medicaid Drug Rebates

HB 2292, 7?th Legislative Session created the Supplemental Drug Rebate program in conjunction with the Preferred Drug List (PDL) and Prior Authorizations (PA).  In order for a manufacturer's product to be included on the PDL, a manufacturer must agree to pay an additional, supplemental rebate amount on their products.  Physicians that prescribe a manufacturer's product that is in a reviewed class, but were not selected as the preferred drug are required to get a PA for the non-preferred product.

CHIP Drug Rebate Program
The 76th Texas Legislature directed the Health and Human Services Commission (HHSC) to develop a program under the federally authorized State Children's Health Insurance Program (CHIP) (Title XXI of the federal Social Security Act, 42 U.S.C. §§ 1391aa-1397jj). CHIP is an optional program designed to provide affordable insurance to low- to middle-income families with uninsured children.

Manufacturers wishing to participate in the CHIP rebate program should complete and sign the CHIP Drug Rebate Agreement and return two originals to Provider Synergies, LLC. Please refer questions regarding the CHIP rebate program to the Texas Contract Manager at (513) 774-8500. Signed contracts should be returned to:

Texas Contract Manager
Provider Synergies, L.L.C.
10100 Alliance Rd, Ste 201
Cincinnati, OH  45242

KHC/CSHCN Rebate Programs

Texas Health and Safety Code §§12.025 requires HHSC to establish a voluntary drug rebate program for all drug manufacturers whose products are covered by the Texas Department of State Health Services Kidney Health Care (KHC) and Children with Special Health Care Needs (CSHCN) Services Program. The 77th Texas Legislature General Appropriations Act, TDH Rider 38, authorized KHC and CSHCN to receive and use all rebate monies for client services, and to establish a preference for products from manufacturers who have signed rebate agreements with the program. KHC and CSHCN are committed to ensuring a 100 percent participation rate because of increased drug costs that have significantly impacted program budgets.

The Kidney Health Care program provides wrap-around Part D coverage for eligible clients. CMS has classified this program as a State Pharmaceutical Assistance Plan (SPAP). Manufacturers wishing to participate may download the KHC rebate agreement or CSHCN rebate agreement, complete and sign, and return two copies of each contract. Returned agreements should be addressed to:

Mr. Antoine Nelson
Xerox-Pharmacy Rebate Operations
12365A Riata Trace Parkway
Austin, TX  78727

Rebate Contracts that Require Manufacturer Pricing

If a rebate agreement requires drug manufacturers to provide pricing data to the state on a quarterly basis, the pricing data should be submitted to:

Mr. Antoine Nelson
Xerox-Pharmacy Rebate Operations
12365A Riata Trace Parkway
Austin, TX  78727

Or and

Manufacturer Payments

Drug manufacturers: when issuing a payment for drug rebate invoices, please include the invoice number as found on the invoice.  All payments should be sent to the following address:

Regular Mail: Overnight Mail:

Health and Human Services Commission

Health and Human Services Commission

Attn: ARTS, VDP Drug Rebates
P. O. Box 149055
Austin, Texas 78714-9055

Attn: ARTS, VDP Drug Rebates
1106 Clayton Lane, Ste. 240-E
Austin, Texas 78723

Manufacturer Disputes

Each calendar quarter, Vendor Drug summarizes all of the paid claims data by National Drug Code (NDC) number and bills the drug companies for their products. The drug company pays the invoice but may have questions about the state’s reported utilization. If this occurs, the rebate auditors provided by Vendor Drug's rebate administrator will review the claim level data for that specific NDC.  If necessary, they will contact the  pharmacy that submitted the claim to verify the submitted information.  If a pharmacy omits a decimal  or they rounded the quantity  up to the next whole number then the drug manufacturer disputes the claim.  Please refer to the Pharmacy Provider Procedure Manual, specifically section 4.3 Dispensing Limits and 9. Rebates to ensure you are correctly identifying the correct quantity and how Vendor Drug will adjust incorrect claims.