Audit: Drug rebate program billings, collections need improvement

TRENTON – A state audit of drug rebate programs found that the timeliness of billings and collections can be improved.

Among other things, the audit found that procedures for reviewing quarterly rebate payments from drug manufacturers should be improved.

As of October, the state Auditor found, the uncollected amount of drug rebates exceeded $60 million for billings through 2009.

The audit stated that approximately $48.5 million is for uncollected amounts from 2005 through 2009.

The programs include the Pharmaceutical Assistance to the Aged and Disabled and AIDS Drug Distribution programs.

According to the audit, a portion of the uncollected balance, about $22 million, is due to the General Assistance Program. Drug manufacturers have agreements with the state, but not with the GA program, the audit states.

The Division is pursuing a court ruling, which could reduce the size of that $60.7 million uncollected balance.

The rest, $38.6 million, may include some disputed amounts, the state said.

The Division of Medical Assistance and Health Services said in part in its response to the audit that it agrees that procedures could be improved.

It states that it has implemented a new accounting system that will improve its ability to manage the program, the Division Director, Valerie Harr, stated in a letter to the Auditor.

“It should be pointed out that the program has collected 98.9 percent  of invoiced amounts of non-General Assistance related balances which are subject to a pending court ruling,” her letter states.

Audit: Drug rebate program billings, collections need improvement