Audit of the Medicaid Drug Rebate Program in the State of Georgia, A-04-03-06010

DEPARTMENT OF HEALTH AND HUMAN SERVICES Office of Inspector General Office of Audit Services REGION 1V 61 Forsyth Street, S.W., Suite 3T41 Atlanta. Georgia 30303 August 29,2003 Report Number: A-04-03-0601 0 Mr. Gary B. Redding, Commissioner Department of Community Health th2 Peachtree Street, N.W., 40 Floor Atlanta, Georgia 30303-3 159 Dear Mr. Redding: Enclosed are two copies of a U.S. Department of Health and Human Services (HHS), Office of Inspector General report entitled, Audit of the Medicaid Drug Rebate Program in the State of Georgia. The objective of this review was to evaluate whether the Georgia Department of Community Health (DCH) had established adequate accountability and internal controls over the Medicaid drug rebate program. Our audit covered Medicaid drug rebates through June 30,2002. We identified weaknesses in DCH's management of the Medicaid drug rebate program. Specifically, we found billing system procedures were inefficient, supporting records and reports were not accurate, and the dispute resolution process did not conform to Centers for Medicare & Medicaid Services' (CMS) guidelines. Also, we identified an undetermined amount of rebate accounts receivable write-offs that occurred during the transition to a new contractor in 1999. Additionally, the contractor had systems limitations in their billing system. As a result, there is not sufficient assurance that the program has provided CMS with an accurate picture of the drug ...