Department of Health and Human Services

Office of Inspector General -- AUDIT

February 27, 2008

Complete Text of Report is available in PDF format (644 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.

EXECUTIVE SUMMARY:

The objectives of this audit were to determine whether the State agency had (1) implemented the recommendations made in our previous audit of the California drug rebate program and (2) established controls over collecting rebates on single source drugs administered by physicians.  We found that the State agency (1) implemented the prior recommendation related to dispute resolution and (2) established controls over collecting rebates on 81 single source drugs administered by physicians.  However, the State agency did not fully implement the previous recommendation regarding quarterly reporting.

We recommended that the State agency ensure that the system change scheduled for implementation provides documentation to support rebate amounts reported to CMS.  In written comments on the draft report, the State agency addressed our recommendation by stating that it is working on a system change that will enable it to capture and document the data to support rebate amounts reported to CMS quarterly.  The change is scheduled to be implemented by July 15, 2008.