Review of Management Controls Over the Medicaid Prescription Drug Rebate Program

This final report points out that the Health Care Financing Administration (HCFA) has not ensured that States have established adequate accountability and controls over the Medicaid drug rebate program. At the eight States we reviewed, we noted that (1) proper accountability had not been established over billing and collection of rebates, (2) six of the States did not have policies and procedures for settling disputes within the required time frame, (3) conflicting HCFA guidelines caused confusion regarding what a State is required to bill drug manufacturers, and (4) internal controls had not been established over rebate program funds. The HCFA concurred with our recommendations for corrective action.