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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Summary Report on Reviews of Medicaid Drug Rebate Programs in Five States and the District of Columbia," (A-03-04-00200)

January 30, 2004

Complete Text of Report is available in PDF format (397 KB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The objective of this audit was to determine whether State in Region III had established adequate accountability and internal controls over their respective Medicaid drug rebate programs.  We found that (1) four States (Delaware, the District of Columbia, Pennsylvania, and West Virginia) had not reported accurate or complete information on reports to the Centers for Medicare & Medicaid Services; (2) one state (Virginia) had not reconciled by National Drug Code drug rebates received with the invoices submitted; (3) one State (Pennsylvania) had not kept accurate records of outstanding disputed amounts for each manufacturer and another State (West Virginia) had not resolved disputes timely; and (4) one State (Pennsylvania) had not reviewed quarterly rebates received from drug manufacturers to determine if interest was owed when rebates were received after the due date, nor had it verified the accuracy of interest on disputes either due to or due from drug manufacturers.