Audit of the Office of Medicaid (MassHealth) - Review of Capitation Payments (June 28, 2023)
June 28, 2023 · Office of Medicaid (MassHealth) · Read the full official report on mass.gov ↗ · official site ↗
Published June 28, 2023 Audit covers January 1, 2018 – September 30, 2021 Under Diana DiZoglio · 2023–present
source
“MassHealth made an estimated $84,832,094 in capitation payments on behalf of members who were residing outside of Massachusetts.”
Read the plain-English breakdown
This is a state audit of MassHealth payments to managed care organizations from January 1, 2018 through September 30, 2021.
“In collaboration with the HHS Office of Inspector General’s Boston office, OSA has conducted an audit of capitation payments1 made by MassHealth under its Managed Care Program for the period January 1, 2018 through September 30, 2021.”
Auditors checked whether MassHealth was paying managed care plans for people who were not eligible because they lived in and received Medicaid benefits from another state or territory.
“The purpose of this audit was to determine whether MassHealth ensured that it did not make capitation payments to MCOs on behalf of ineligible members who were residing and receiving benefits in other states or territories.”
MassHealth is a major part of the state budget, so payment mistakes can involve public money at a large scale.
“Medicaid expenditures represent approximately 40% of the Commonwealth’s total fiscal year 2021 budget.”
If MassHealth avoids improper payments, that money could support care for eligible members instead.
“MassHealth could have used this money to provide additional services to other MassHealth members.”
The auditor says MassHealth’s checks for member residency were not strong enough and led to estimated overpayments.
“MassHealth does not have effective controls to ensure that an individual meets its residency eligibility requirement.”
The report recommends stronger follow-up when data suggests a member is enrolled in another state’s Medicaid program.
“MassHealth should investigate and resolve all instances where its data matches indicate that a member is enrolled in another state’s Medicaid program.”
The estimated financial impact was large: auditors said the overpayment estimate was $84.8 million.
“By not ensuring that all MassHealth members enrolled in MCOs meet its residency eligibility requirement, we estimate that MassHealth overpaid MCOs by $84,832,094.”
A capitation payment is a fixed monthly payment MassHealth sends to a managed care organization for an enrolled member, instead of paying each medical bill one by one.
“Medicaid programs make fixed monthly payments to managed care organizations for members enrolled in its Managed Care Program.”
What the Auditor checked
- Did not comply Does MassHealth ensure that it does not make capitation payments to managed care organizations (MCOs) on behalf of ineligible members who reside and receive benefits in another state or territory, in accordance with Section 517.002 of Title 130 of the Code of Massachusetts Regulations and Sections 431.211, 431.213(e), and 435.403(a) and (j) of Title 42 of the Code of Federal Regulations?
What the Auditor found
Why it matters: MassHealth overpaid managed care organizations and could have used the money to provide additional services to other MassHealth members.
Standard: Section 517.002 of Title 130 of the Code of Massachusetts Regulations and Section 435.403 of Title 42 of the Code of Federal Regulations ( Section 517.002 of Title 130 of the Code of Massachusetts Regulations; Section 435.403 of Title 42 of the Code of Federal Regulations )
4 recommendations
- MassHealth should revise its policies and procedures regarding its data matches for member eligibility.agency: partially agreed
- MassHealth should investigate and resolve all instances where its data matches indicate that a member is enrolled in another state’s Medicaid program.agency: agreed
- MassHealth should provide members with written instructions during the annual enrollment process on how to unenroll from MassHealth if they move outside of Massachusetts.agency: agreed
- MassHealth should consult with the Centers for Medicare and Medicaid Services to see if it can gain access to T-MSIS, which MassHealth can use in its eligibility detection and residency verification process.agency: agreed
Agency response & Auditor reply
Agency: "EOHHS disagrees with the auditor’s conclusion on the basis that it is overly broad."
Auditor: "EOHHS misinterpreted the audit objective."
Verified dollar findings
Estimated or sample-projected amounts - shown separately because they are not a hard-identified dollar figure.
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