Office of the Utah State Auditor Releases Performance Audit of Medicaid Prescription Drug Controls

The Office of the Utah State Auditor released its Performance Audit of Medicaid Prescription Drug Controls to evaluate the strength of controls that should minimize overutilization of Medicaid-funded prescription drugs.

Medicaid prescription drug controls are administered in Utah by the Division of Health Care Financing (DHCF), which is also referred to as the Division of Medicaid and Health Financing (DMHF).

Insufficient or lacking controls may have allowed improper Medicaid payment for controlled substance prescriptions written and dispensed by ineligible providers. Failure to properly control prescription drug utilization may result in fraud, waste, and abuse of Medicaid services and unnecessary public safety risks. The DHCF should strengthen prescription drug controls to ensure proper Medicaid recipient access to controlled substances.

The audit consists of eight findings and 32 recommendations in two sections that evaluate controls intended to prevent improper use and overutilization. The report also noted weaknesses in DHCF’s Data Warehouse that may impair effective decision making.

Section 1: Pharmacy Claims Data Indicates Control Weaknesses And Database Errors

DHCF final pharmacy claims data appears to reflect both inappropriate payment for prescription drugs and database errors. The three findings from this section include:

  • Finding 1: Pharmacy Claims Data Indicates Payment For Prescriptions Written By Deceased Prescribers
  • Finding 2: Pharmacy Claims Data Indicates Payment For Prescriptions Dispensed To Deceased Recipients
  • Finding 3: Pharmacy Claims Data Indicates Payment For Prescriptions Written By Ineligible Prescribers

The report recommends that DHCF improve controls designed to prevent payment for prescriptions written or dispensed by ineligible providers. Improved controls may decrease overutilization and its accompanying costs and risks.

Section 2: The Client Restriction Program Needs Improvement

The DHCF Client Restriction Program (CRP), which is intended to minimize recipient overutilization, does not always effectively identify and prioritize the review of recipients qualifying for restriction or objectively evaluate client utilization. The five findings from this section include:

  • Finding 4: Pharmacy Claims Data Indicates Payment To Unassigned Providers[1]
  • Finding 5: CRP Reviews Indicate Areas For Improvement
  • Finding 6: Inconsistent Restriction Reviews May Allow Overutilization To Continue
  • Finding 7: Surveillance and Utilization Review System Reports Exclude Some High-Risk Recipients
  • Finding 8: The CRP Does Not Always Review And Restrict High-Risk Recipients

Improving weaknesses in the CRP will enable DHCF to more reliably identify and restrict Medicaid recipients whose behavior demonstrates risks of overutilization.

The Office believes that implementing the audit’s recommendations will improve controls and data integrity to ensure the proper use of Medicaid funds and to decrease the availability of controlled substances dispensed contrary to applicable statutes, rules, and policies.

The full report and accompanying audit brief may be found on the Office’s website, auditor.utah.gov, and the report can be found specifically at 
http://financialreports.utah.gov/saoreports/2016/PA16-02MedicaidPrescriptionControlsHealth,Departmentof.pdf .