Objective

To determine the extent of implementation of the five recommendations included in our initial audit report, CVS Health – Accuracy of Drug Rebate Revenue Remitted to the Department of Civil Service (Report 2016-S-41).

About the Program

The New York State Health Insurance Program (NYSHIP), administered by the Department of Civil Service (Civil Service), provides health insurance coverage to over 1.2 million active and retired State, local government, and school district employees and their dependents. The Empire Plan is the primary health benefits plan for NYSHIP, covering 1.1 million members. Civil Service contracted with CVS Health to administer the Empire Plan’s prescription drug program for the period January 1, 2014 through December 31, 2018. In accordance with the contract, CVS Health was required to negotiate agreements with drug manufacturers for rebates and remit the rebate revenue to Civil Service.

Our initial audit report, issued on January 28, 2019, sought to determine if CVS Health invoiced and remitted commercial rebate revenue related to Empire Plan drug utilization in accordance with its contract with Civil Service. Our audit covered the period January 1, 2014 through June 30, 2017. We reviewed the rebate revenue generated from agreements with six drug manufacturers and found that CVS Health did not always properly invoice drug manufacturers for rebates (either in a timely manner, accurately, or at all) or remit all rebate revenue to Civil Service that it collected. As a result, Civil Service was due $2,052,653 in rebates.

Key Findings

CVS Health has made progress in correcting the problems we identified in the initial report, having implemented two recommendations and partially implemented three recommendations.

Key Recommendation

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