Audit of the Office of Medicaid (MassHealth) - Review of Claims for Drug Test and Screen Services
April 19, 2018 · Office of Medicaid (MassHealth) · Read the full official report on mass.gov ↗ · official site ↗
Published April 19, 2018 Audit covers March 1, 2013 – December 31, 2016 Under Suzanne M. Bump · 2011–2023
source
“Based on our audit, we have concluded that MassHealth overpaid as much as $4.38 million for drug tests and screens provided to its members.”
Read the plain-English breakdown
This is a 2018 performance audit by the Massachusetts State Auditor looking at MassHealth payments for drug testing services.
“OSA has conducted an audit of MassHealth’s payments for drug tests and screens for the period March 1, 2013 through December 31, 2016.”
Auditors checked whether MassHealth was catching and refusing claims that were duplicates or were billed in a way that split one service into multiple charges.
“The purpose of this audit was to determine whether MassHealth properly identified and denied payment for both duplicate and unbundled drug tests.”
MassHealth is a major public program, and weak controls can waste taxpayer money that could otherwise support healthcare services.
“To ensure that claims for drug tests and screens are paid properly, MassHealth must have effective controls in place, including program regulations, operating policies and procedures, control activities, claim-processing system edits, monitoring activities, and enforcement actions.”
If you are a Massachusetts resident, this affects how public healthcare dollars are protected and whether MassHealth has enough safeguards against improper payments.
“MassHealth provides access to healthcare services to approximately 1.9 million eligible low- and moderate-income children, families, seniors, and people with disabilities annually.”
The audit found three main problems: improper same-day drug screen and test payments, possible unbundled drug test payments, and duplicate drug test payments.
“Below is a summary of our findings and recommendations, with links to each page listed.”
The auditor recommended that MassHealth recover improper payments where appropriate and strengthen its computer edits so bad claims are denied before payment.
“MassHealth should seek to recover as much of the $2,294,369 in unbundled drug test payments improperly paid to laboratories as it deems appropriate.”
This audit is significant because MassHealth is a large part of the state budget, so even billing-control problems in one service area can involve millions of dollars.
“Medicaid expenditures represent approximately 39% of the Commonwealth’s total annual budget.”
“Unbundling” means billing several separate codes when one combined code should cover the service, which can lead to higher payments.
“Unbundling occurs when multiple procedure codes are billed for a group of procedures that are covered by a single comprehensive code.”
2 figure(s) pending source verification - not shown
What the Auditor checked
- Did not comply Does MassHealth properly identify and deny the payment of unbundled drug tests?
- Did not comply Does MassHealth properly identify and deny the payment of duplicate drug tests and screens?
What the Auditor found
Why it matters: Providers may have ordered testing that was not needed for member treatment, creating excessive and unallowable costs to the Commonwealth.
Standard: Section 450.307 of Title 130 of the Code of Massachusetts Regulations and MassHealth Independent Clinical Laboratory Bulletin 9. ( Section 450.307 of Title 130 of the Code of Massachusetts Regulations; Independent Clinical Laboratory Bulletin 9 )
4 recommendations
- MassHealth should seek to recover as much of the $2,294,369 in unbundled drug test payments improperly paid to laboratories as it deems appropriate.agency: agreed
- MassHealth should modify the system edits in MMIS and NetReveal to ensure that they properly identify and deny payment for quantitative drug tests when a member also receives a qualitative drug screen on the same day.agency: already implemented
- MassHealth should update its MMIS and NetReveal system edits as soon as possible when CMS revises procedure codes or implements new ones.agency: agreed
- MassHealth should not turn off the NetReveal prepayment system edit that is designed to prevent the payment of unallowable unbundled claims.
Agency response & Auditor reply
Agency: "After initial review of the claims OSA has characterized as unallowable, MassHealth generally agrees with OSA’s finding and will recover any improper payments once it is appropriate to do so."
Auditor: "As noted above, during our audit period, problems still existed in this area, resulting in millions of dollars in improper payments."
Why it matters: Funds used for potentially unbundled drug tests could have been used to pay for other medical services to MassHealth members.
Standard: 130 CMR 450.307 and MassHealth Transmittal Letter PHY-132. ( 130 CMR 450; Transmittal Letter PHY-132; Transmittal Letter LAB-45 )
2 recommendations
- MassHealth should determine how much it should recover of the $1,888,620 that we identified in potential unbundled drug test payments improperly paid to laboratories and should take the necessary measures to recoup funds as appropriate.agency: partially agreed
- MassHealth should monitor claim activity to identify unacceptable billing practices related to unbundled drug tests and should program system edits in MMIS and/or NetReveal to deny any unbundled claims billed.agency: agreed
Agency response & Auditor reply
Agency: "MassHealth reviewed the methodology and data used by OSA, and determined that $1,869,004.83 of the $1,888,620 OSA identified in its finding did not constitute improper payment for unbundled services."
Auditor: "Based on this definition and the design of our audit testing, we determined that during our audit period MassHealth paid 148 providers as much as $1.8 million for drug tests that might represent unbundling."
Why it matters: MassHealth paid more than once for the same drug test service, resulting in overpayments.
Standard: 130 CMR 450.307(B)(1). ( 130 CMR 450.307(B)(1) )
3 recommendations
- MassHealth should determine how much it can recover of the $198,100 that we identified in duplicate drug test and screen payments and should take the necessary measures to recoup these funds.agency: agreed
- MassHealth should ensure that its Claims Operations staff members research its suspect-duplicates report for duplicate drug tests paid for and make recoupments for such tests.agency: agreed
- MassHealth should update its NetReveal system edit to deny payment for duplicate drug tests and screens, including those that are billed by two different laboratories that are not for emergency hospital drug tests.agency: agreed
Agency response & Auditor reply
Agency: "For instances in which a provider was paid for the same service code on the same date of service, MassHealth will recoup any payments determined to be duplicate payments."
Verified dollar findings
Money paid out that the audit found should not have been - overpayments, unallowable and nonreimbursable charges, improper claims.
Prior findings revisited
"In a previous audit (No. 2012-1374-3C), OSA identified significant weaknesses in MassHealth’s claim-processing system for drug tests and screens that resulted in millions of dollars of improper claim payments."
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