Institutional Federal Compliance Report 2021

STATE OF NEW YORK

Schedule of Findings and Questioned Costs

Year ended March 31, 2018

Cause The Department attributed the delay in processing of the drug manufacturer rebates due to a programmatic issue causing certain drug-related Medicaid claims submitted by allowable enrollees being inadvertently excluded from the drug utilization data queried for invoicing drug manufacturers from the Department’s Medicaid Management Information System (MMIS). As of April 1, 2017, the Department implemented their corrective actions by identifying allowable drug utilization data within MMIS. The Department subsequently invoiced $204,089,005 outside of the standard 60 days for prior-period claims identified. Possible Asserted Effect Failure to ensure a complete population of covered outpatient drug utilized for Medicaid beneficiaries during the rebate period may result in the added disputes between drug manufacturers and the Department and the need to expend additional resources for all parties that use state drug utilization data. Further, State drug utilization data is also used to calculate the Medicaid portion of the Internal Revenue Service’s (IRS) Branded Prescription Drug (BPD) fee, and therefore, any unedited/inaccurate drug utilization data reported to CMS can cause significant disparities in labeler BPD fees, thereby skewing the amount the labeler owes. Repeat Finding A similar finding was included in the prior year Single Audit Report as finding 2017-027 at page 73. Questioned Costs None. Recommendation We recommend that the Department implement monitoring controls to continually assess the completeness and accuracy of drug utilization data by reviewing the MMIS criteria utilized in the query and actively monitoring changes to drug rebate laws and regulations. We also recommend that the Department ensure that all service changes under the Medicaid program are properly communicated throughout the Department to ensure all necessary updates to system queries are properly and timely made. Views of Responsible Officials The Department accepts the finding and has already taken action to resolve the issue. Reference the corrective action plan for further details.

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