Legal Matters

HHS Tightens Scrutiny of Compliance With Medicaid Drug Rebate Program Regulations (Part 1 of 6)

From Drug Benefit Trends®Posted 02/12/2004

By Diane Ung, JD; George Kenny, JD



The US Department of Health and Human Services (HHS) Office of Inspector General (OIG) is nearing its goal to audit each state's Medicaid drug rebate program by the end of 2003. This is being done to ensure that rebates due from pharmaceutical manufacturers have been properly computed and collected. The OIG audits have uncovered accounting and reporting weaknesses, which have heightened concerns about fraud and abuse in an area (pharmaceuticals) in which government expenditures have increased tremendously.

In addition, federal agencies and Congress have been investigating pharmaceutical manufacturers' compliance with Medicaid drug rebate reporting policies. Several manufacturers have already paid large sums to settle allegations of fraudulent Medicaid rebate practices, and other manufacturers and even some health care providers have come under federal scrutiny. In an attempt to streamline and simplify matters, the Centers for Medicare and Medicaid Services (CMS) recently published a "final rule" that modifies the reporting and record-keeping requirements imposed on pharmaceutical manufacturers.

Ms Ung is a partner in the Los Angeles office of Foley & Lardner, the nation´s 10th largest law firm, which has a nationally recognized health care practice. Mr Kenny is an associate in the San Francisco office of Foley & Lardner.

Drug Benefit Trends 16(1):16-18, 2004. © 2004 Cliggott Publishing, Division of CMP Healthcare Media

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