Corporate Compliance

GOV’T AUDIT INSIDER: Inadequate controls for drug rebate program in Massachusetts

Healthcare Auditing Weekly, September 14, 2004

The Massachusetts Division of Medical Assistance's computer system was to blame for the incorrectly reported credit balance of $270 million in pending drug rebates, says an OIG audit report. Since the state agency also relied on the drug manufacturers to compute and submit the proper interest with its overdue rebate payments, OIG could not be sure that all funds were properly collected. The Medicaid Drug Rebate Program requires states to fully disclose all rebates and collections, track and report to CMS any interest collected, and offset their federal drawdown by the federal share of collected rebates. The OIG inspected the Massachusetts agency's policies and procedures in effect from July 1, 2001, through June 30, 2003. OIG recommended the state establish procedures for reconciling and ageing its pending drug rebate amounts on the form CMS 64.9R and establish policies and procedures for the proper monitoring and collection for interest due from manufacturers f! or late, disputed, and unpaid drug rebate amounts. During the audit, the OIG did the following:

  • Reviewed billing, collection, and reporting criteria for the rebate program

  • Discussed prior audit work of the program with Massachusetts auditor's office

  • Interviewed state agency officials to determine the policies, procedures, and controls for the rebate program

  • Reconciled the drug rebate collections reported on form CMS 64.9R reports for the fiscal year 2002 to supporting documentation

  • Reconciled the total drug rebate invoices to the total reported on the form CMS 64.9R report for the quarter ended June 30, 2002

    Click here to read the audit report, "Review of Medicaid Drug Rebate Collections Commonwealth of Massachusetts As Of June 30, 2002" (A-01-04-00005), issued August 12.

      • Strategies for Health Care Compliance

    • Strategies for Health Care Compliance

      News and real-life examples to increase the effectiveness of your compliance program. Strategies for Health Care Compliance...

    • Compliance Monitor

      This HTML e-mail newsletter delivers news on Medicare and Medicaid fraud and abuse, as well as recent documents and targets...

    • Medicare Weekly Update

      Each issue of Medicare Weekly Update includes the latest CMS proposed and final rules, CMS manual revisions, and...

    • Medicare Update for Physician Services

      Medicare Update for Physician Services is a free, monthly e-zine that delivers news and information to help physician...

    Most Popular

    Related Articles