P-17. Audits

All pharmacies enrolled with HHSC are subject to periodic audits. These may result from internal HHSC auditors working with the HHSC Inspector General (IG) or Federal Medicaid Integrity contractors working through the Centers for Medicare and Medicaid Services.

Refer to 1 TAC Section 354.1891 (Vendor Drug Providers Subject to Audit) on the "Texas Administrative Code" page for more information.

Pharmacy claims are sampled and reviewed for accuracy and compliance with state and federal laws and policies governing the pharmacy programs. Any audit findings derived by following procedures developed from accepted and approved audit standards may subject the pharmacy to recoupment. The auditors determine the amount of overpayment in a sample set of claims and then apply a statistical extrapolation formula to estimate the overpayment across the universe of claims the pharmacy provider or supplier submitted over the selected audit period.

Audits determine the pharmacy's compliance with federal and state laws, policies, procedures, and limitations. Auditors will select claims transactions and compare them with documentation on the corresponding prescriptions, invoices, the pharmacy's daily logs, pharmacy delivery logs, etc. Overpayments are considered exceptions subject to restitution to HHSC.