Office of Inspector General's Partnership Plan - New York State Comptroller Report on Administration of the Medicaid Drug Rebate Program

EXECUTIVE SUMMARY:

This audit was conducted by the New York State Office of the State Comptroller (OSC) as part of our continuing partnership efforts with State auditors to expand audit coverage of the Medicaid program.  The objective of the review was to determine whether the New York State Department of Health (Health) had maximized Medicaid Drug Rebate Program (Program) revenues owed to Medicaid.  The OSC found that Health had not maximized Program revenues; had not properly tracked or pursued rebate revenues; and had essentially relied on drug manufacturers to remit the rebates they owed.  As a result, Health had not recouped between approximately $14 million to $20 million it should have collected during the OSC audit period.  The OSC also concluded that, for all practical purposes, Health did not have a functioning accounting system for the Program.  The OSC recommended financial adjustments and procedural corrections agreed to by Department of Health officials.