Audit of the Office of Medicaid (MassHealth) - Review of Capitation Payments with Multiple Identification Numbers (December 31, 2024)

This is a state audit of MassHealth payments to managed care organizations from January 1, 2019 through December 31, 2022.

“In collaboration with the US Department of Health and Human Services Office of Inspector General’s Boston office, OSA has conducted an audit of capitation payments made by MassHealth to members with multiple identification numbers (IDs) for the period January 1, 2019 through December 31, 2022.”

Auditors wanted to know whether MassHealth avoided paying managed care plans for members who had been assigned more than one ID number.

“The purpose of this audit was to determine whether MassHealth ensured that it did not make capitation payments to MCOs on behalf of members who were assigned more than one member ID.”

Duplicate IDs can lead to improper payments, meaning public money may be spent on payments that should not have been made.

“Not ensuring that all MassHealth members are assigned only one member ID creates a higher-than-acceptable risk that payments may be improper.”

If this problem is fixed, money that was going to duplicate payments could instead support other MassHealth services or lower costs for the state.

“MassHealth could have used this money to provide additional services to other MassHealth members or reduce the cost of its services to the Commonwealth.”

In the auditors’ sample, MassHealth incorrectly paid for 107 out of 115 members reviewed, with $672,946 identified as overpaid in that sample.

“During the audit period, out of our sample of 115 members, MassHealth incorrectly made capitation payments on behalf of 107 members.”

The Auditor’s Office says it will check back on whether MassHealth recovers the duplicate payments.

“We encourage MassHealth to actively pursue recoupment for these payments and we will follow up in six months.”

Auditors projected the problem was larger than the sample, estimating about $3.8 million in capitation payments tied to members with more than one ID.

“Because we collaborated with the US Department of Health and Human Services Office of Inspector General (HHS OIG) to pull a statistical sample, HHS OIG’s statistician was able to project the results of our testing to the full population and, based on this sample, projected that MassHealth made an estimated $3,813,827 in capitation payments to managed care organizations on behalf of members who were assigned more than one member ID.”

A capitation payment is a set payment MassHealth gives a managed care organization for each enrolled person, whether or not that person gets care.

“MassHealth pays the MCO a capitation payment, which is a set amount of money for each enrolled person assigned to them, per period of time, whether or not that person seeks care.”