Institutional Federal Compliance Report 2021

STATE OF NEW YORK

Schedule of Findings and Questioned Costs

Year ended March 31, 2018

Federal Agency:

U.S. Department of Health and Human Services

Federal Program:

Medicaid Assistance Program (93.778)

Federal Award Numbers:

1805NY5MAP, 1705NY5MAP, 51505NY5MAP, 51605NY5MAP, 1805NYINCT, 1705NYINCT, 51305NYINCT, and 51505NYINCT

Federal Award Years:

2015, 2016, 2017, and 2018

State Agency:

Department of Health

Reference:

2018-030

Criteria Title 42 U.S. Code section 1396r-8 (42 USC 1396r-8), Payment for covered outpatient drugs , 42 USC 1396r-8(a)(2)(A), Each State agency under this title shall report to each manufacturer not later than 60 days after the end of each rebate period and in a form consistent with a standard reporting format established by the Secretary, information on the total number of units of each dosage form and strength and package size of each covered outpatient drug dispensed after December 31, 1990, for which payment was made under the plan during the period, including such information reported by each Medicaid managed care organization, and shall promptly transmit a copy of such report to the Secretary. Additionally, Title 45 U.S. Code of Federal Regulations Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards , section 75.303 also states the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition The Department of Health (the Department) did not have effective monitoring and communication controls to ensure the Department’s process over drug utilization reports submitted to drug manufacturers included a complete population of covered outpatient drugs utilized during the rebate period. We reviewed all the “Final Drug Rebate Quarterly Report” for State fiscal year 2018 provided by the Department which summarized the Department’s quarterly drug rebate invoices sent to drug manufacturers. The report included various columns for the current year invoicing activity as well as rebated paid by drug manufactures for the period. The Department had indicated in the “Final Drug Rebate Quarterly Report” for the period October 1, 2017 through December 31, 2017, new invoicing activity sent to drug manufactures for $103,421,796 unbilled at the end of the rebate period over 365 days prior, for $48,665,983 unbilled at the end of the rebate period over 240 days prior, and for $52,001,225 unbilled at the rebate period over 120 days prior. The cumulative amount of $204,089,005 was billed outside of the required 60-day subsequent to the quarter end of the actual incurred period timeframe.

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