Evidence record
Medicaid Program: Improper Payments for Drugs Without a Federal Drug Rebate Agreement
- Jurisdiction
- New York
- Publishing agency
- Office of the New York State Comptroller, Division of State Government Accountability
- Audit organization
- Office of the New York State Comptroller
- Publication date
- February 23, 2024
- Source record
- Original document linked
Findings
4
Recommendations
4
Overall conclusion
The audit found that the Department’s oversight of Medicaid drug payments and the capitation rate adjustment process were inadequate, resulting in a substantial amount of improper MCO payments for drugs from manufacturers without an NDRA; the Department should revise the rate adjustment methodology and pursue recovery of identified improper payments, with emphasis on including all applicable encounter claims and physician-administered drugs.
Scope
Period covered: January 2017 through March 2023. Assessed the Department of Health’s oversight of Medicaid managed care drug payments, capitation rate adjustments, and related data systems (MDW and eMedNY). Analyzed encounter claims for prescription drugs, OTC drugs, compound drugs, and physician-administered drugs from manufacturers without an active NDRA. Excluded some post-March 2023 data until the rate adjustment process was completed.
Findings (4)
Each finding has a stable link.
- F-1293
The Department lacked adequate oversight of Medicaid managed care payments for drugs, which led to improper MCO payments for drugs from manufacturers without an NDRA at the time of service.
- F-1294
Flaws in the Department’s managed care capitation rate adjustment methodology intended to offset improper managed care payments for drugs from manufacturers without an NDRA, resulting in a significant number of encounter claims not being included in the rate adjustments.
- F-1295
Identified nearly $50.3 million in improper MCO payments for drugs from manufacturers without NDRAs at the time of service that were not included in the rate adjustments, including 2.5 million encounter claims totaling over $41.7 million for prescription, OTC, and compound drugs and 84,554 encounter claims totaling nearly $8.6 million for physician-administered drugs.
- F-1296
Rate adjustments did not include physician-administered drugs and OTC drugs were included only for the first two years; MDW data limitations prevented identification of all NDCs and many NDCs without an active NDRA were not on the MDW table.
Recommendations (4)
- R-1141
Review the $50.3 million in managed care encounter claims for drugs from manufacturers without an NDRA, and determine the appropriate course of action to maximize recoveries.
Related finding F-1295 - R-1142
Review the capitation rate adjustment process to ensure all applicable encounter claims for prescription drugs, OTC drugs, and compound drug ingredients from manufacturers without an NDRA are incorporated.
Related finding F-1294 - R-1143
Include physician-administered drug encounter claims for drugs from manufacturers without an NDRA in the capitation rate adjustments.
Related finding F-1296 - R-1144
Continue adjusting capitation rates for encounter claims for drugs from manufacturers without NDRAs for all service dates prior to the effective date of the requirement for Medicaid recipients to receive prescription drugs through FFS (April 1, 2023).
Related finding F-1296