While the new Affordable Health Care law provides a variety of funding
opportunities for states, one provision in the health law that could
shift billions of dollars from cash-strapped states to the federal
government. Under the
National
Medicaid Drug Rebate Program created by the Omnibus Budget
Reconciliation Act of 1990, drug manufacturers are required to enter
into agreements that provide rebates for Medicaid purchased drugs,
establishing a 15% minimum level of rebates. Up until now, the rebates
were divided between the states and the federal government. But under
the new health reform law, a significant portion of the rebates will go
solely to Washington beginning this year.