Audit of the Office of Medicaid (MassHealth) - Review of Claims Paid for Pharmacy Drugs
August 29, 2019 · Office of Medicaid (MassHealth) · Read the full official report on mass.gov ↗ · official site ↗
Published August 29, 2019 Audit covers January 1, 2015 – June 30, 2017 Under Suzanne M. Bump · 2011–2023
source
“MassHealth improperly paid pharmacies for prescription drugs totaling $982,535.”
Read the plain-English breakdown
This is a Massachusetts State Auditor review of MassHealth pharmacy drug payments from January 1, 2015 through June 30, 2017.
“This report details the audit objective, scope, methodology, findings, and recommendation for the audit period, January 1, 2015 through June 30, 2017.”
The audit checked whether MassHealth followed its own rules when paying for pharmacy drugs.
“The purpose of this audit was to determine whether MassHealth paid for pharmacy drugs in accordance with its regulations.”
MassHealth is a major public program, and mistakes in payments can affect public trust in how taxpayer-funded healthcare dollars are managed.
“As with any government program, public confidence is essential to the success and continued support of the state’s Medicaid program.”
If you are a Massachusetts resident, this matters because MassHealth serves many residents and uses a large share of the state budget.
“MassHealth provides access to healthcare services for approximately 1.9 million eligible low- and moderate-income children, families, seniors, and people with disabilities annually.”
The audit found improper payments in three areas: unauthorized prescription refills, emergency drug refills that were supposed to be non-refillable, and over-the-counter drugs for members in institutional settings.
“We reviewed a total of 43,579,259 prescription drug claims paid by MassHealth, totaling $1,716,217,958, during the period January 1, 2015 through June 30, 2017 and found that MassHealth improperly paid 25,144 of these claims, totaling $982,535, as detailed below.”
The auditor recommended that MassHealth strengthen its pharmacy payment system so these kinds of improper payments are blocked before they happen.
“MassHealth should ensure that system controls are developed and implemented in POPS to prevent payments to pharmacies for unauthorized prescription drug refills, refills of emergency (non-refillable) drug fills, and OTC drugs supplied to members living in institutional settings.”
The report points to a controls problem: MassHealth’s system allowed payments that its rules did not allow, across thousands of claims.
“POPS lacks sufficient system controls to prevent payment to pharmacies for OTC drugs supplied to MassHealth members living in institutional settings.”
MassHealth is the state Medicaid program; POPS is the pharmacy claim-processing system; OTC means over-the-counter drugs; institutional settings here means nursing facilities and skilled nursing facilities.
“Commonwealth Medicine also manages the Pharmacy Online Processing System (POPS), which is provided under contract with Conduent State Healthcare LLC (formerly Xerox State Healthcare LLC) and is MassHealth’s system for processing pharmacy drug claim data.”
1 figure(s) pending source verification - not shown
What the Auditor checked
- Partially Does MassHealth pay for pharmacy drugs in accordance with its regulations?
What the Auditor found
Why it matters: MassHealth paid for refills beyond what prescribers authorized, including drugs with abuse potential.
Standard: Section 406.411(C) of Title 130 of the Code of Massachusetts Regulations prohibits payment for refills that exceed the number authorized by the prescriber and treats prescriptions without refill authorization as nonrefillable. ( Section 406.411(C) of Title 130 of the Code of Massachusetts Regulations )
1 recommendation
- MassHealth should ensure that system controls are developed and implemented in POPS to prevent payments to pharmacies for unauthorized prescription drug refills.agency: disagreed
Agency response & Auditor reply
Agency: "MassHealth does not agree with this finding . . . and believes that a substantial number of the claims identified in this finding were appropriately paid."
Auditor: "However, according to the documentation we reviewed, MassHealth paid some pharmacies for more refills than had been prescribed, and therefore none of the claims in question should have been paid."
Why it matters: Back-to-back emergency fills may put members at risk if their medical condition is not being monitored by a physician.
Standard: 130 CMR 406.411(B) allows payment for at least a 72-hour, non-refillable emergency drug supply. ( 130 CMR 406.411(B) )
1 recommendation
- MassHealth should ensure that system controls are developed and implemented in POPS to prevent payments to pharmacies for refills of emergency non-refillable drug fills.agency: agreed
Agency response & Auditor reply
Agency: "To the extent that OSA is using the term “back-to-back emergency fills” to mean the same prescription number was used for successive emergency fills of a drug, MassHealth agrees with this finding and will recover the identified overpayments."
Auditor: "Therefore, MassHealth improperly paid these claims."
Why it matters: MassHealth overpaid pharmacies for OTC drugs that regulations prohibit it from paying for when supplied to institutionalized members.
Standard: 130 CMR 406.421(B) states that MassHealth does not pay for over-the-counter drugs provided to institutionalized members. ( 130 CMR 406.421(B) )
1 recommendation
- MassHealth should ensure that system controls are developed and implemented in POPS to prevent payments to pharmacies for OTC drugs supplied to members living in institutional settings.agency: partially agreed
Agency response & Auditor reply
Agency: "While MassHealth agrees that some pharmacies were paid for over-the-counter (OTC) drugs prescribed to members living in nursing facilities, and has enhanced system capabilities as of 12/14/17 to better prevent improper claims for OTC drugs provided to institutionalized members, MassHealth believes this finding may be overstated."
Auditor: "Therefore, all of the claims identified in this report as paid to pharmacies for OTC drugs prescribed to members living in nursing facilities or skilled nursing facilities were accurately described as improperly paid."
Verified dollar findings
Money paid out that the audit found should not have been - overpayments, unallowable and nonreimbursable charges, improper claims.
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