Department of Health and Human Services
Office of Inspector General -- AUDIT
"Follow-Up Audit of the Medicaid Drug Rebate Program in Iowa," (A-07-07-03094)
April 3, 2008
Complete Text of Report is available in PDF format (2.45 mb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.
In a follow-up audit of Iowa’s
Medicaid drug rebate program, we found that, as of June 30, 2006, the State had
generally corrected the control weaknesses
identified in our previous audit. However, the State had not developed adequate
policies and procedures to offer the State’s hearing mechanism for disputes that
were 60 days old or to ensure that interest collections were properly and
accurately reported. As a result, the State had not reported interest totaling
$873 that was collected during our audit period. Finally, the State had
established controls over and accountability for collecting rebates on
single-source drugs administered by physicians. Under the drug rebate
program, manufacturers receive Federal Medicaid funding for covered outpatient
drugs by entering into a rebate agreement with CMS and paying quarterly rebates
to the States.
We recommended that the State (1) develop and follow policies and procedures to offer use of the State’s hearing mechanism to resolve disputes after 60 days; (2) develop and follow policies and procedures to properly report interest collections on the Form CMS-64 summary sheet; and (3) report interest of $873 that was collected, but not reported, during the audit period. The State concurred, either wholly or in part, with all of our findings and recommendations.