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North Dakota procedure development incomplete

Healthcare Auditing Weekly, May 6, 2008

A follow-up audit revealed that North Dakota had partially implemented procedures for their Medicaid drug rebate program to resolve the weakness relating to billing and tracking $0 unit rebate amounts (URA) that the OIG identified previously, according to an OIG audit.

The OIG also found that ND did not have a method to sufficiently monitor disputed drug rebates and did not have written policies and procedures for the calculation of interest on unpaid balances from drug manufacturers. Finally, although the State had established controls over collecting rebates on single-source drugs administered by physicians, the procedures did not fully comply with the Deficit Reduction Act of 2005 (DRA).

Some of the OIG’s recommendations were that the State:

1. implement procedures to track $0 URA line items and notify manufacturers when they fail to remit proper URA payment;
2. track open and closed disputed drug rebates and make the state's hearing mechanism available to manufacturers; invoice manufacturers for interest when appropriate; and
3. properly report all rebates invoiced, rebate collections, and accounts receivables to ensure that CMS receives accurate drug rebate information.

North Dakota stated that it would write procedures for the drug rebate program and specific to physician-administered drugs, and that it had invoiced manufacturers for single-source, physician-administered drugs.

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