Department of Health

Administration of the Medicaid Drug Rebate Program (Follow-Up Review)

Under the Medicaid Drug Rebate Program, the Department of Health can receive rebates from drug manufacturers for prescription drugs provided to Medicaid recipients. In certain circumstances, some drugs are not eligible for rebates, but can be purchased at certain federally mandated discounts. In our prior audit report 2000-S-33, we examined the Departmentís administration of this program and found that the Department was not properly tracking or pursuing the rebate revenue due from drug manufacturers, and was not ensuring that drugs not eligible for rebates were appropriately discounted. As a result, during the 30 months covered by our audit, the Department did not recover rebate revenue and did not realize discounts totaling between $14.1 million and $19.6 million. We recommended that the Department improve its recordkeeping and overall administration of the Medicaid Drug Rebate Program, and take action to ensure that all recoverable revenues were collected. In our follow-up review, we found that a number of actions had been taken by the Department to implement the recommendations contained in our prior report.

For a complete copy of Report 2002-F-52 click here.
For a copy of the 90-day response click here.