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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Medicaid Outpatient Drug Expenditures in Missouri for the Period October 1, 2002, Through September 30, 2004," (A-07-06-04063)

June 13, 2008

PDF FileComplete Text of Report is available in PDF format (664 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


For fiscal years 2003 and 2004, Missouri claimed $2.9 million in Medicaid reimbursement for prescription drugs that were no longer eligible for reimbursement or inadequately documented. The Medicaid drug rebate program generally pays for covered outpatient drugs if their manufacturers have rebate agreements with Centers for Medicare & Medicaid Services (CMS) and pay rebates to the States.  Under the drug rebate program, CMS provides the States with a quarterly Medicaid drug tape, which the States use to verify coverage of the drugs for which they claim reimbursement. 

An additional $1.9 million represented expenditures for drug products that were not listed on the quarterly drug tapes.  Because the State did not verify whether these drugs were eligible for coverage, these expenditures may not have been allowable.  We identified no other errors for the remainder of the $2.09 billion ($1.33 billion Federal share) that the State claimed.

We recommended that the State (1) refund $2.9 million to the Federal Government for drug expenditures that were not eligible for Medicaid coverage, (2) work with CMS to resolve $1.9 million in payments for drugs that were not listed on the quarterly drug tapes and that may not have been eligible for Medicaid coverage, and (3) strengthen internal controls to ensure that claimed Medicaid drug expenditures comply with Federal requirements.  The State disagreed with our findings and recommendations.