Audit of the Medicaid Drug Rebate Program in the State of Georgia

EXECUTIVE SUMMARY:

The objective of this review was to determine whether the Georgia Department of Community Health had established adequate accountability and internal controls over the Medicaid drug rebate program.  The audit covered Medicaid drug rebates through June 30, 2002.  The review identified weaknesses in the State's management of the Medicaid drug rebate program.  We recommended that the State more closely monitor contractor activities, accurately report drug rebate activities, and follow the Centers for Medicare and Medicaid Services's (CMS) guidelines in the collection process.  We also recommended that the amount of any rebate write-offs related to the transition to a new contractor be determined and disposition made in accordance with proper accounting principles and within CMS's guidelines.