From: HHS Office of Inspector General <donotreply@subscriptions.hhs.gov>
Date: Thu, Jun 12, 2014 at 6:14 AM
Subject: OIG posts 2 reports, related podcast, and news about enforcement actions - 6/12
To: iammejtm@gmail.com
Good morning from Washington, DC. Today OIG posts 2 reports, a related podcast and news about enforcement actions. As always, you can use the links provided to go directly to the new material.
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The Republic of Zambia, Ministry of Health, Did Not Always Manage the President's Emergency Plan for AIDS Relief Funds or Meet Program Goals in Accordance With Award Requirements (A-04-13-04004) http://go.usa.gov/8JZT
Through its Global HIV/AIDS Program, the Centers for Disease Control and Prevention (CDC) implemented the President's Emergency Plan for AIDS Relief (PEPFAR), working with ministries of health and other in-country partners to combat HIV/AIDS by strengthening health systems and building sustainable HIV/AIDS programs in more than 75 countries. Through a 5-year cooperative agreement, CDC awarded PEPFAR funds totaling $3.7 million to the Republic of Zambia, Ministry of Health (the Ministry), to implement a coordinated national response to the HIV/AIDS epidemic for the budget period September 30, 2010, through September 29, 2011.
The Ministry did not always manage PEPFAR funds or meet program goals in accordance with award requirements. With respect to financial management, specifically financial transaction testing, $225,000 of the $516,000 reviewed was allowable, but $291,000 was unallowable. Of the 33 financial transactions tested, 16 transactions totaling $225,000 were allowable, but 17 transactions totaling $291,000 were unallowable because they lacked adequate supporting documentation or were related to another cooperative agreement.
Additionally, the Ministry:
(1) Did not maintain accounting records that adequately identified the source and application of PEPFAR funds,
(2) Did not report expenditures for this cooperative agreement on its Financial Status Report (FSR),
(3) Submitted its FSR 1 month late,
(4) Used an undetermined amount of PEPFAR funds to pay value-added taxes (VAT) on expenditures, and
(5) Did not have an annual financial audit completed and the report submitted on time as required by United States Government (Federal) regulations.
Our program management review showed that, of the 81 goals from its cooperative agreement, the Ministry reported accomplishments for 53 in its annual progress report. However, it did not report accomplishments for the remaining 28 goals. Our sample review of 38 reported accomplishments showed that 27 were fully supported by documentation, 4 were partially supported, and 7 were not supported. Also, the Ministry submitted its annual progress report to CDC 1 month late.
The Ministry's policies and procedures were not adequate for managing CDC cooperative agreements. As a result, the Ministry did not exercise proper stewardship to ensure that it properly managed PEPFAR funds or met program goals in accordance with the award requirements.
We recommended that the Ministry:
(1) Refund to CDC $290,575 of unallowable expenditures;
(2) Work with CDC to resolve whether VAT was an allowable expenditure under the cooperative agreement;
(3) Apply for a VAT exemption with the Republic of Zambia Government;
(4) File an amended FSR using expenditures instead of draws from the Payment Management System;
(5) Develop and implement adequate policies and procedures;
(6) Implement a financial management system that complies with Federal regulations, such as adequately identifying the source and application of PEPFAR funds and allocating salary expenses based on detailed payroll records; and
(7) Submit an annual financial audit report on time to the applicable Federal agency.
In comments on our draft report, Ministry officials partially agreed with our findings but did not directly address our recommendations. They also described actions they had taken.
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Podcast: PEPFAR Funds Spending Oversight http://go.usa.gov/8JZm
Mark Wimple, Supervisory Auditor for the Office of Audit Services, is interviewed by Lori Pilcher, Regional Inspector General for Audit Services in Atlanta.
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Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles: 2014 (OEI-05-14-00170) http://go.usa.gov/8JZJ
WHY WE DID THIS STUDY
This memorandum report fulfills the annual reporting mandate from the Patient Protection and Affordable Care Act of 2010 (ACA) for 2014. The ACA requires that OIG conduct a study of the extent to which formularies used by stand-alone prescription drug plans and Medicare Advantage prescription drug plans (referred to jointly as Part D plans) under Medicare Part D include drugs commonly used by full-benefit dual-eligible individuals (i.e., individuals who are eligible for both Medicare and Medicaid and who receive full Medicaid benefits and assistance with Medicare premiums and cost-sharing). Pursuant to the ACA, OIG must annually issue a report with recommendations as appropriate. This is the fourth report that OIG has produced to meet this mandate.
HOW WE DID THIS STUDY
For this memorandum report, we determined whether the 329 unique formularies used by the 3,309 Part D plans operating in 2014 cover the 200 drugs most commonly used by dual eligibles. We also determined the extent to which those commonly used drugs are subject to utilization management tools, which include prior authorization, quantity limits, and step therapy. To create the list of the 200 drugs most commonly used by dual eligibles, we used the 2010 Medicare Current Beneficiary Survey (the most recent available). Of these 200 drugs, 195 are eligible for Part D prescription drug coverage, 3 are excluded from coverage, 1 is no longer prescribed in the form taken by beneficiaries, and 1 is no longer available in the United States.
WHAT WE FOUND
Overall, we found that the rate of Part D plan formularies' inclusion of the 195 drugs commonly used by dual eligibles is high, with some variation. On average, Part D plan formularies include 96 percent of the 195 commonly used drugs. In addition, 64 percent of the commonly used drugs are included by all Part D plan formularies. These results are largely unchanged from our findings from our 2013 mandated annual report.
We also found that the percentage of drugs subject to utilization management tools remained the same between 2013 and 2014. On average, formularies applied utilization management tools to 28 percent of the unique drugs we reviewed in 2014.
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State Enforcement Actions Updated http://go.usa.gov/8d3e ------------------------------------------------------------------------------
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Jeremy Tobias Matthews
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