Medicare Compliance & Reimbursement

OIG finds weak accounting controls on state Medicaid programs.

As states try to improve their Medicaid drug rebate collection systems, pharmaceutical providers' bottom lines could start feeling the pinch.

Forty-five out of 49 states and the District of Columbia have not strengthened their Medicaid drug rebate accounting controls, the HHS Office of Inspector General found in an audit released in July.

Very Few States Were Weakness-Free

Despite states' improvements since the OIG's previous audit in 1993, only four states had no weaknesses in their drug rebate programs' internal controls and accountability, the OIG says.

Thirty-seven states submitted unreliable information on the Medicaid Drug Rebate Schedule to the Centers for Medicare and Medicaid Services. It was also  reported that 27 states used improper accounting for interest accrued on late rebate payments, the OIG notes. Fifteen states had inadequate dispute resolution and collection processes, 17 states had inadequate rebate collection systems and 13 states had other significant problems.

CMS To Heed OIG's Advice

It appears that CMS will try to meet the OIG recommendations. In response to the audit, CMS agreed to ensure that states improve their drug rebate accounting and billing, pursuant to the OIG's instructions.

To read the audit, go to http://www.oig.hhs.gov/oas/reports/region6/60300048.htm.