Purpose

To determine the extent of implementation of the four recommendations made in our initial audit report, Medicaid Payments for Pharmacy Claims – Joia Pharmacy and a Related Prescriber (Report 2013-S-4).

Background

Pharmacies that are enrolled in the Medicaid program dispense prescription drugs to Medicaid beneficiaries. During the period January 1, 2008 through December 31, 2012, the Department of Health (Department) paid Joia Pharmacy, Inc. (Joia) more than $7.7 million for 50,060 claims on behalf of 706 Medicaid recipients. One particular doctor (herein referred to as “the Doctor”) was listed as the prescriber on 31,351 (63 percent) of the 50,060 claims.

We issued our initial audit report on June 27, 2017. The audit objective was to determine whether Medicaid made proper payments to Joia and the Doctor in compliance with applicable Medicaid laws and regulations, and the rules and policies set forth by the Department and the State Education Department. Our audit covered the period January 1, 2008 through December 31, 2012. We also reviewed updated information pertaining to the Doctor’s prescribing activity for the period January 1, 2013 through June 30, 2016. Our audit found that, based on a statistical projection of the audit sample results, the Department made improper payments totaling approximately $1.5 million to Joia for pharmacy claims that did not comply with Medicaid laws, rules, regulations, and policies. Further, our audit identified other practices of both Joia and the Doctor that warranted further review.

We recommended that the Department review the Medicaid payments made to Joia and recover any improper payments, as warranted; formally review the factors that led to Joia’s submission of improper claims; follow up on all other matters we reported, including having a Department physician review the issues involving the Doctor; and assess the appropriateness of the providers’ future participation in the Medicaid program.

Key Finding

Department  officials made progress in addressing the problems we identified in the initial audit report. Of the report’s four audit recommendations, three were implemented and one was partially implemented.

Key Recommendation

Officials are given 30 days after the issuance of the follow-up report to provide information on any actions that are planned to address the unresolved issues discussed in this report.

Other Related Audit/Report of Interest

Department of Health: Medicaid Payments for Pharmacy Claims – Joia Pharmacy and a Related Prescriber (2013-S-4)