Sneak Preview: Puerto Rico’s Drug Payments Process Deemed Faulty

September 22, 2011 | By Jerry Ashworth | Post a Comment

(This post is based on an upcoming article in the Federal Grants Management Handbook.) State health departments providing prescription medications for low-income people with HIV/AIDS should ensure that drug payments cannot reasonably be made under another public or private insurance policy before seeking federal reimbursement under the Ryan White CARE Act’s AIDS Drug Assistance Program (ADAP).

The Department of Health and Human Services Departmental Appeals Board recently upheld a Health Resources and Services Administration disallowance of about $24.3 million in reimbursement sought by the Puerto Rico Department of Health because PRDH did not show that medications reimbursed under ADAP could not reasonably have been covered by other insurance policies. The board added that HRSA correctly relied on statistical sampling and that PRDH did not prove that the sampling method was unsound or that any of the disallowed prescriptions in the sample were eligible for ADAP funding.

In 2006, the HHS Office of Inspector General audited about $73.5 million in ADAP expenditures incurred by PRDH from April 2002 to March 2005. The OIG’s sampling software randomly selected ADAP-funded prescriptions to estimate the unallowable reimbursement, concluding that PRDH was overpaid between $24.3 million and $35.8 million.

Find out more about the Puerto Rico case in the October issue of the Federal Grants Management Handbook newsletter.

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