Quarterly Utilization Report (CMS-R-144)

Section 7: Invoice Process
Within 60 days of the end of a calendar quarter, states are required to send rebate invoices to
each labeler Invoice Contact for any rebate-eligible drugs the states paid for during that quarter.
The established invoice format is the Office of Management and Budget (OMB) approved Form
CMS-R-144. Form CMS-R-144 includes various data fields for each drug and requires states to
separately identify Fee-For-Service (FFS) units from managed care organization (MCO) units.
States may choose to include both FFS and MCO units on one invoice, or they may opt to submit
one invoice containing all FFS units and a second invoice containing MCO units. In addition,
states may opt to send invoices in a paper or electronic format; however, each invoice should be
made available in paper format for those labelers that cannot utilize an electronic format. Please
note that CMS does not have the authority to mandate electronic submission of invoices. For
each NDC, the state’s invoice will report the following information:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.

Record ID
State Code
Period Covered
Labeler Code
Product Code
Package Size Code
Drug Name
Unit Rebate Amount
Units Reimbursed
Rebate Amount Claimed
Number of Prescriptions
Medicaid Amount Reimbursed
Non-Medicaid Amount Reimbursed
Total Amount Reimbursed
Correction Flag

For various reasons, the quarterly CMS files sometimes contain zero URAs and states should
include each zero URA on their invoices to labelers. Labelers are responsible for calculating a
URA for all zero URAs on the invoice, multiplying the URA by the number of units reported by
the state, and sending a rebate payment with updated totals along with the ROSI, Form CMS304. The next quarterly CMS files should contain a valid (i.e., non-zero) URA for any NDC that
had a zero URA on the previous files. In the event that a state does not receive a valid (i.e., nonzero) URA on the next quarterly CMS files, the state may contact the labeler directly to inform
the labeler that its URA is missing. States may include CMS on that email. If the labeler does
not indicate that it will correct the issue that resulted in the zero URA, the state should contact
CMS at [email protected].
States that wish to bill labelers for rebates for new drugs that are not included on the CMS file
should ensure that such drugs are rebate-eligible prior to authorizing provider dispensing of these
drugs. States may check DDR to determine whether a labeler has reported a product as a
covered outpatient drug for inclusion in the MDR program.

All changes to URAs are reflected as PPAs on the quarterly files. While states may attach a PPA
list to their quarterly invoice for informational purposes, they are not to include PPAs on the
current quarter invoice as PPAs should appear on a separate invoice.

7.1 Alternate Invoice Process
Per the National Drug Rebate Agreement, in the rare event that CMS is unable to transmit
quarterly URAs timely, states may send a list of NDCs and units in place of the standard invoice
form (i.e., Form CMS-R-144). Labelers are responsible for paying these alternate invoices
within 37 days of receipt, the same way they are with traditional invoices.

7.2 Quarterly Rebates Paid in Full
If a labeler’s review of a quarterly state invoice determines that no disputes or adjustments are
necessary and that the total quarterly rebate amount can be paid as reflected on the invoice, the
labeler should pay the total invoiced amount in full with identifying documentation about the
payment for the state’s records. Such documentation may include, for example, the labeler code, the
labeler name, the quarter and applicable federal program(s) covered by the payment, or any other
such pertinent information that would help a state identify from whom the rebate payment is being
sent and for which quarter and federal program the payment applies.

7.3 Unit Conversion Factor
When preparing quarterly invoices, please note that there may be some differences in the
standards used by the MDR program compared to those used by pharmacies. In those instances
where the reimbursement standard used by pharmacies may be different from the rebate
standard, states should perform conversions prior to invoicing labelers. Alternatively, states may
make the labeler aware of the conversion factor used and have the labeler perform the conversion
prior to rebate payment. However, if the state chooses this option, they should notify the labeler
in writing and should remain consistent in applying the conversion factor.

7.4 Tolerances
If the total invoice for an individual labeler code is $50 or less for a calendar quarter, states may
choose to forego sending an invoice to that labeler. However, if the $50 tolerance is applied,
CMS expects states to maintain documentation of the NDCs, applicable quarters, etc. In
addition, states that apply this tolerance are expected to notify participating labelers of this
practice.

7.5 Reconciliation of State Invoice (ROSI) (Form CMS-304)
In the event that labelers disagree with the utilization data submitted by states, or need to adjust
the utilization billed on the current state invoice as agreed-upon, labelers are required to
complete and submit a ROSI with their invoice payment. To keep the ROSI consistent with the
information reported on the state invoice, Form CMS-304 also includes a “FFS/MCO Record
ID” column. Labelers should use this column to separately identify each record as either FFS

utilization or MCO utilization when the ROSI is being submitted along with a state’s quarterly
rebate payment. The ROSI is used for both unit adjustments and disputes and CMS expects
labelers to pay the portion of the invoice for which there is no disagreement with the state. If a
labeler has not paid an invoice in full and has not properly completed the ROSI to account for all
unpaid invoice units, the state should consider the labeler to be out of compliance with its rebate
payment requirements. Therefore, states should track those outstanding rebates owed as late
payments with interest due. Labelers that fail to comply with their rebate payment obligations
may be subject to penalties, such as termination from the rebate program.

7.6 Prior Quarter Adjustment Statement (PQAS) (Form CMS-304a)
Once the current invoice cycle has passed, labelers may discover unit adjustments and/or
disputes from a previous quarter. In these instances, labelers complete and submit a PQAS as
official notification of the discrepancy. To keep the PQAS consistent with the information
reported on the state invoice, Form CMS-304a also includes a “FFS/MCO Record ID” column.
Labelers should use this column to separately identify each record as either FFS utilization or
MCO utilization when the PQAS is being submitted along with state’s quarterly rebate payment.
Except for its use for prior quarter adjustments and disputes, the PQAS functions the same as the
ROSI. Labelers that fail to comply with their rebate payment obligation may be subject to
penalties, such as termination from the rebate program, etc.