Follow-Up Audit of the Medicaid Drug Rebate Program in Tennessee

In a follow-up audit of Tennessee's Medicaid drug rebate program, we found that as of June 30, 2006, the State had implemented the recommendations from our prior audit that related to verifying all amounts reported on the Form CMS 64.9R to ensure that those amounts tie directly back to the amounts recorded in the accounting records.  Manufacturers may make their outpatient drugs eligible for Federal Medicaid funding by entering into a rebate agreement with the Centers for Medicare and Medicaid Services and paying quarterly rebates to the States.  We also found that the State had established controls over collecting rebates on single-source drugs administered by physicians.  Therefore, we did not offer any recommendations.