February 2026 OIG Work Plan Updates: Pharmacy Controls, Medicaid Financing, and Drug Access in Focus

The HHS OIG added four new items to its work plan in February 2026.

Internal Controls for Nursing Home Pharmacy

As one can imagine, pharmacy services for nursing home residents are a critical part of the care they receive, and nursing homes are required to provide such services. They are also required to implement procedures to ensure that all drugs are accurately acquired, received, dispensed, and administered.

Some specific requirements include the following:

(1) Store all drugs in locked compartments

(2) Permit only authorized personnel to have access to the keys to secured areas

(3) Provide separately locked, permanently affixed compartments for storage of Schedule II controlled drugs.

According to the OIG, during recent complaints and standard health inspections, survey agencies have cited almost half of nursing homes throughout the nation for deficiencies related to pharmaceutical services.

When it comes to opioids there are over 157,000 nursing home residents who could be at risk if ineffective systems and procedures are in place for safe and effective use of medications. Such risks include opioid overuse, misuse, or diversion.

The OIG plans to use this work plan opportunity to determine if selected survey agencies ensured that nursing homes:

(1) Complied with Federal and State pharmacy service requirements to prevent the overuse of opioids by Medicaid and Medicare residents.

(2) Implemented effective internal controls to prevent the misuse or diversion of opioids.

Medicaid Audits

Medicaid is a program funded by both the federal government and states. For some Medicaid beneficiaries categories, there are routes for additional reimbursement from the federal government. One such category is the 1.3 million American Indians and Alaska Natives (AI/ANs) who are enrolled in state Medicaid programs.

Federal law indicates states will receive 100% Federal Medical Assistance Percentage (FMAP) for Medicaid health services provided to eligible AI/ANs through an Indian Health Service (IHS) facility whether operated by IHS or by a Tribe or Tribal organization.

Of course, there are rules and regulations clarifying when this additional financial support is appropriate.

Through claims audits, OIG hopes to determine whether state agencies claimed Medicaid AI/AN services that are eligible for reimbursement at the enhanced 100 percent FMAP rate in accordance with Federal and State requirements.

States’ Use of Health Care-Related Taxes

States historically have used general funds to finance their share of Medicaid expenditures. However, states have increased their use of health care-related taxes to finance their share instead of general funds. According to the OIG, health care-related taxes allow states to grow their Medicaid programs without increasing their general fund contribution.

In general, federal Medicaid coverage is limited to U.S. citizens, U.S. nationals, and qualified noncitizens. Individuals without satisfactory immigration status are not eligible for full-scope Federal Medicaid benefits, but they are eligible for emergency services funded under Medicaid.

States can choose to provide health care coverage beyond emergency services for individuals who do not qualify for Medicaid, including undocumented immigrants, using State-only funds.

The OIG will prepare a data brief to provide information about selected States’ use of Federal Medicaid reimbursement obtained through health care-related taxes. They also plan to identify State-funded health care programs that provide services, in addition to emergency services under Medicaid, to individuals who do not meet Medicaid eligibility requirements.

Access to Drugs for Dual-Eligible Enrollees

Individuals enrolled in both Medicare and Medicaid are known as dual-eligible enrollees. These beneficiaries receive prescription drug coverage under Medicare Part D.

In order for Part D sponsors to include different Part D drugs in their formularies, they must meet certain limitations outlined in 42 CFR § 423.120. The Patient Protection and Affordable Care Act (PPACA), section 3313, requires the OIG to conduct an annual study of the extent to which formularies used by Medicare Part D plans include drugs commonly used by dual-eligible enrollees. According to the OIG, this particular study will focus on Part D Plans' 2026 formularies.

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