Review of Ryan White Part B Funding and Payer-of-Last-Resort Requirement

Title II (Part B) of the Ryan White Comprehensive AIDS Resources Emergency Act of 1990 provides grants to States and territories to fund the purchase of medications through AIDS Drug Assistance Programs (ADAP) and other health care and support services. Part B grant funds may be used only for individuals determined to meet medical and financial eligibility requirements. Additionally, these grant funds may not be used to pay for items or services that are eligible for coverage by other Federal, State, or private health insurance. This provision is commonly referred to as the "payer-of-last-resort" requirement.

Five of the nine States that we reviewed claimed costs for prescriptions dispensed to individuals who had other health insurance that would have covered the drugs, and two States claimed costs for prescriptions dispensed to clients for whom the respective States did not maintain adequate documentation of ADAP eligibility. The States claimed unallowable costs totaling $33.4 million because they did not have adequate controls to ensure compliance with Part B payer-of-last-resort requirements or did not follow their eligibility procedures.

The Health Resources and Services Administration (HRSA) could improve its oversight to ensure that States comply with payer-of-last-resort and eligibility requirements. We identified best practices in two States that HRSA could use in its outreach efforts to help States improve compliance with the statutory requirement that Ryan White funds not be used when private health insurance can reasonably be expected to pay for an item or service.

We recommended that HRSA (1) require States to work with their State Medicaid agencies to identify Ryan White clients who obtain Medicaid coverage during the period of their Part B coverage; (2) require States to process retroactive Medicaid claims for individuals eligible for Medicaid at the time Ryan White funds were used to pay their claims and credit the Ryan White program for any Medicaid payment; and (3) take steps to ensure that funds are not used to pay for drugs that are eligible for coverage by other Federal, State, or private health insurance. HRSA concurred with our recommendations.