Evidence record
Maryland Department Of Health Pharmacy Services Audit Report
- Jurisdiction
- Maryland
- Publishing agency
- Maryland Office of Legislative Audits
- Publication date
- August 9, 2024
- Source record
- Original document linked
Findings
5
Recommendations
9
Overall conclusion
MDH’s pharmacy services program exhibits governance and control weaknesses across manual claims processing, provider licensure verification, program audits, and MADAP rebates, leading to substantial overpayments and potential noncompliance with regulations. A cybersecurity finding is redacted in the public report. Some prior-year findings were addressed, while others were repeated, and MDH and its programs indicate corrective actions and ongoing improvements.
Scope
The audit is a fiscal compliance examination of the Maryland Department of Health (MDH) pharmacy services for the period July 1, 2019 through December 31, 2022. It covers MDH’s pharmacy programs administered by the Medical Care Programs Administration (MCPA) and Prevention and Health Promotion Administration (PHPA), including the Maryland Medicaid Pharmacy Program (MMPP), Medicaid Managed Care Program (MCPA), Maryland AIDS Drug Assistance Program (MADAP), Breast and Cervical Cancer Diagnosis and Treatment Program (BCCDTP), and Kidney Disease Program (KDP). The audit evaluated claims adjudication and processing, vendor system controls and security, rate setting, program monitoring and audits, and rebate processing for these five programs. It also encompassed the nine Managed Care Organizations (MCOs) and analyzed rebates for both fee-for-service programs and MCOs. The period payments (fiscal year 2022) totaled approximately $631 million in claim payments across the four fee-for-service programs and approximately $711.5 million in capitation payments related to pharmacy services for MCOs. The audit also reviewed the status of findings from the preceding audit (August 2020) and included consideration of the December 2021 ransomware security incident. The public report notes that cybersecurity findings have been redacted in accordance with State law, with related details addressed in an unredacted version.
Findings (5)
Each finding has a stable link.
- F-661
Finding 1 – The Medical Care Programs Administration did not ensure manually processed Maryland Medicaid Pharmacy Program (MMPP) claims were proper, resulting in overpayments of approximately $397,000 related to 11 of the 15 claims tested.
- F-662
Finding 2 – MDH did not have procedures to ensure that prescribing providers were licensed prior to approving pharmacy claims for payment.
- F-663
Finding 3 – MDH did not audit three of the four fee-for-service programs’ pharmacy claims, did not analyze claim reversals, and did not use available drug utilization data to identify improper claims.
- F-664
Finding 4 – MDH did not ensure that drug manufacturers provided timely and proper MADAP drug rebate payments.
- F-665
Finding 5 – Redacted cybersecurity-related finding.
Recommendations (9)
- R-585
Recommendation 1a – MDH should perform independent documented reviews of manually processed claims.
Related finding F-661 - R-586
Recommendation 1b – MDH should recover any overpayments identified, including those noted above.
Related finding F-661 - R-587
Recommendation 2 – Establish procedures to ensure prescribing providers are licensed as required by program regulations prior to paying pharmacy claims (repeat).
Related finding F-662 - R-588
Recommendation 3a – Establish procedures to periodically audit each program’s pharmacy claims on a test basis (repeat).
Related finding F-663 - R-589
Recommendation 3b – Investigate pharmacies with below-average reversal rates and take appropriate follow-up action (repeat).
Related finding F-663 - R-590
Recommendation 3c – Utilize all available data to help identify improper MMPP pharmacy claims including fraud, waste, and abuse (repeat).
Related finding F-663 - R-591
Recommendation 4a – Establish procedures to ensure that all required drug manufacturers pay rebates accurately and timely (repeat), including development of accounts receivable records to monitor outstanding rebates and pursue collection activities.
Related finding F-664 - R-592
Recommendation 4b – Pursue collections of any outstanding rebates (repeat).
Related finding F-664 - R-593
Recommendation 5 – Redacted cybersecurity-related recommendation.
Related finding F-665