Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of the Medicaid Drug Rebate Program in Alaska," (A-10-03-00006)

July 23, 2003


Complete Text of Report is available in PDF format (897 KB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


EXECUTIVE SUMMARY:

The objective of this review was to evaluate whether the Alaska Department of Health and Social Services (the State agency) had established adequate accountability and internal controls over the Medicaid drug rebate program.  We found that the State agency had not established adequate policies, procedures, and internal controls over its drug rebate program.  Specifically, we identified weaknesses in the following areas:  (1) quarterly reporting, (2) accounts receivable system, (3) segregation of duties, (4) interest accrual and collection, and (5) dispute resolution.  Federal regulations require effective control and accountability for all funds, property, and other assets.  As a result, the State agency did not properly report drug rebate information to Centers for Medicare and Services nor adequately establish policies, procedures, and internal controls to account for drug rebate program transactions.  In addition, the lack of adequate internal controls increased the risk for fraud, waste and abuse of drug rebate program funds.  The State agency generally concurred with our findings.