Federal Reports

While auditing the Veterans Health Administration’s (VHA) prescription drug return program, the VA OIG determined that VHA is at increased risk for not receiving all drug return credits due before the national drug return vendor—Pharma Logistics—issues final invoices to VA medical facilities. In October 2020, VA ended its contract with Pharma Logistics. The vendor continues to process and issue final invoices to facilities as the drugs they returned become eligible for and receive manufacturer credit. The final invoice process will continue until at least April 2022.VHA medical facility pharmacies lost at least an estimated $2.1 million worth of drug return credits because pharmacy chiefs did not always effectively monitor or review job settlement statements before Pharma Logistics issued final invoices. In addition, although the vendor established a dashboard that provided information on the status of drug return credits at the facility level, it cannot provide a national report on all outstanding credits. This hurt VHA’s ability to maximize potential drug return credits and minimize the risk of lost credits.VHA will continue to be unable to ensure it is receiving all credits for drugs returned by medical facilities if pharmacy chiefs do not routinely monitor preliminary invoices, reconcile job settlement statements to identify outstanding credits, and request extensions to final invoices to allow additional time for credit processing. This risk will persist for any future drug return contract(s)—whether awarded nationally or locally—if the reimbursement structure remains the same.The OIG will continue its oversight work on prescription drug returns within VHA and plans to issue a full report, including specific recommendations. The OIG requests to know what action, if any, VHA takes to mitigate the potential risks identified in this memorandum and the outcome of those actions.

The Veterans Health Administration (VHA) spent about $6.6 billion on prescription drugs in fiscal year (FY) 2019. Most were dispensed to veterans by medical facility pharmacies. VHA pharmacies can return drugs that become damaged or expire before use through a reverse distributor for credit or destruction. In FY 2019, VHA expected to receive about $52 million from drug returns.The VA Office of Inspector General (OIG) audited the prescription drug return program to determine if VHA was effectively overseeing the program to maximize benefits to taxpayers and ensure drugs waiting to be returned are not diverted or otherwise abused.The OIG found VHA pharmacy chiefs did not effectively implement the program and did not follow requirements in VA’s contract with the reverse distributor, Pharma Logistics. These issues increased the risk of drug diversion and ultimately put about $18.1 million at risk. Pharmacy chiefs did not always secure and track drugs held for return or complete required analyses to maximize returns. They also failed to meet contract requirements to return for credit only drugs due to expire within 120 days. VA’s National Contract Service and network contracting officers needed to do more to ensure contract terms were met. The Office of the Deputy Under Secretary for Health for Policy and Services and the Office of the Deputy Under Secretary for Health for Operations and Management did not effectively govern the program or communicate requirements to medical facilities.The OIG made eight recommendations, including ensuring medical facilities are properly securing and accounting for drugs set aside for return, minimizing the number of drugs returned while maximizing the value of returned drugs, and ensuring all offices and positions with defined responsibilities for the program or the administration of any future drug return contracts have the support and the authority to fulfill those responsibilities.

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements

From January 1, 2020, through March 31, 2021, the Raleigh, NC, Processing and Distribution Center (P&DC) reported 7,483 late arriving containers, about 1.44 billion pieces of delayed inventory, and 112,302 delayed dispatch containers. This site was selected based on the high number of delayed dispatch containers during this time period.The Raleigh P&DC is in the South Atlantic Division of the Eastern Processing Region. The facility processes letters, flats, and packages for ZIP Codes throughout NC.A portion of the audit scope and our site observations occurred during the COVID-19 pandemic. The Postal Service experienced decreased employee availability and increased package volume during this time, which impacted operations nationwide.Our objective was to evaluate mail conditions at the Raleigh, NC, P&DC.

The Center Ossipee, East Wakefield, and Conway (all leased) post offices are in the Maine-New Hampshire-Vermont District. The Postal Service is required to maintain a safe and healthy environment for both employees and customers in accordance with its internal policies and procedures and Occupational Safety and Health Administration (OSHA) safety laws. Our objective was to determine if Postal Service management is adhering to building maintenance, safety and security standards, and employee working condition requirements at post offices.

Our objective was to assess the effectiveness of plant load agreements in the New Jersey District. We selected this district based on volume and revenue declines from fiscal year (FY) 2019 to FY 2020 of 32 percent (500 million mailpieces) and 31 percent ($109.8 million in revenue), respectively. This district ranked sixth in the nation for revenue declines.

The State agency is responsible for administering the Medicaid program, including processing and paying claims for behavioral health services. Its goal is to facilitate quality health care services that will produce positive health outcomes for Oklahoma. The Oklahoma Department of Mental Health and Substance Abuse Services (ODMHSAS) has oversight responsibility for behavioral health services in Oklahoma. Its mission is to promote healthy communities and provide the highest quality care to enhance the well-being of all Oklahomans. ODMHSAS is primarily State funded (approximately 71 percent); the rest of its funding comes predominantly from Medicaid for individual beneficiary services (17 percent) and Federal grants (11 percent).The State agency and ODMHSAS have an interagency agreement to ensure that individuals being served by both organizations receive appropriate behavioral health care and to provide reimbursement to ODMHSAS for administrative costs, among other things. The agreement identifies the various roles each organization performs in providing and overseeing behavioral health in Oklahoma.The State agency has four key control activities to ensure that behavioral health services meet State requirements: (1) provider enrollment, (2) behavioral health program integrity audits, (3) claim processing edits, and (4) pharmacy requirements for medications used to treat OUD (OUDdrugs).ODMHSAS also has four key control activities to ensure that behavioral health services meet State requirements: (1) certification of agencies that provide services, (2) annual contract reviews at agencies that provide services, (3) beneficiary prior authorization to receive services, and (4) automated claim analyses to ensure that paid claims meet certain payment rules.Counseling helps people with OUD change how they think, cope, and react, and acquire the skills and confidence needed for recovery. CMS, numerous addiction treatment authorities and nationally recognized evidence-based guidelines, such as the American Society of Addiction Medicine’s (ASAM’s) National Practice Guidelines for the Use of Medications in the Treatment of Addiction Involving Opioid Use, and SAMHSA’s Treatment Improvement Protocol (TIP) 40 indicate that counseling for individuals taking OUD drugs can be helpful in treating OUD.8 SAMHSA’s TIP 63, Medications for Opioid Use Disorders, indicates that although counseling greatly benefits many patients, treatment should target the patient’s needs and, therefore, counseling should not be required.ODMHSAS’s objectives include providing the highest quality care to enhance the well-being of all Oklahomans. To help ensure quality of care and fulfill its oversight role of behavioral health services, ODMHSAS performs annual reviews at outpatient facilities that contract with it to provide the services. During the reviews, ODMHSAS staff evaluate a random sample of 10 non- Medicaid client files to ensure that the facilities appropriately provided and documented their services. ODMHSAS determines whether the services were performed, and it reviews clinical records to determine whether the services were individualized and were client and assessment driven. Review of clinical documentation may include, but not be limited to, screenings, assessments, treatment plans, corresponding progress notes, and other documentation, as necessary.