Audit of the Medicaid Drug Rebate Program in Nevada

EXECUTIVE SUMMARY:

The objective of this review was to evaluate whether the Nevada Division of Health Care Financing and Policy (the State agency) had established adequate accountability and internal controls over the Medicaid drug rebate program.  We found that the State agency had not established adequate policies, procedures, and internal controls over its drug rebate program.  Specifically, we identified weaknesses in the following areas:  (1) accounts receivable system, (2) rebate billings, (3) interest accrual and collection, and (4) dispute resolution.  As a result, the State Agency did not properly report drug rebate information to Centers for Medicare and Medicaid Services nor adequately establish policies, procedures, and internal controls to account for drug rebate program transactions.  In addition, the lack of adequate internal controls increased the risk for delayed collection of drug rebate funds and the potential loss of interest that could have been collected.  The State agency concurred with our findings and recommendations.