Audit of the Medicaid Drug Rebate Program in Utah

The audit objective was to evaluate whether the Utah Department of Health, Division of Health Care Financing (DHCF), had established adequate accountability and internal controls over the Medicaid drug rebate program.  We found that the DHCF lacked sufficient internal controls with regard to the Medicaid drug rebate program as required by federal rules and regulations.  As a result, drug rebate receivables were perpetually understated and it is likely that the DHCF did not receive all drug rebates and interest on disputed or late rebate payments due from manufacturers.  Moreover, the lack of sufficient internal controls increased the risk for fraud, waste, or abuse of drug rebate program funds.