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Nebraska's Medicaid drug rebate program weaknesses found

Healthcare Auditing Weekly, April 29, 2008

The OIG determined that Nebraska had not corrected all of the weaknesses found in a previous audit of the state’s Medicaid drug rebate program, according to an OIG report.

By entering into a rebate agreement with CMS and paying quarterly rebates, manufacturers can make their drugs eligible for funding. Nebraska had addressed the previously reported weakness, but failed to create a subsidiary accounts receivable system that listed all drug rebate transactions, among other issues. According to the report, the State agency also did not establish controls over and accountability for collecting rebates on physician-administered, single-source drugs.

The OIG recommended that the State agency create and adhere to policies and procedures that include

1. ensuring that all adjustments are traceable to the subsidiary accounts receivable system
2. reconciling the general ledger account to the subsidiary accounts and to the Form CMS-64.9R using actual adjustments supported in the system
3. documenting procedures for reconciling the quarterly cash receipts log to the Form CMS-64.9R
4. estimating and accruing interest on all overdue rebate balances
5. reporting interest received on the Form CMS-64 Summary Sheet instead of as a rebate receivable

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