Executive Office of Elder Affairs - Senior Pharmacy Program
JULY 12, 1999 · Read the full official report (PDF) ↗
Published JULY 12, 1999 Audit covers July 1, 1996 – December 31, 1997 Under A. Joseph DeNucci · 1987–2011
source
“Our audit revealed that the SPP is helping to subsidize the cost of prescription drugs to many senior citizens within the Commonwealth.”
Read the plain-English breakdown
This is a 1999 State Auditor review of Massachusetts’ Senior Pharmacy Program, a five-year pilot meant to help eligible seniors pay for certain prescription medicines.
“The five-year pilot program, commonly referred to as the Senior Pharmacy Program (SPP), began on July 1, 1997 and is to be funded each year, subject to appropriation, in an amount not to exceed $30 million from the Children’s and Seniors’ Health Care Assistance Fund2 by the increase in the state cigarette tax.”
Auditors checked whether the agencies running the program were using the money properly, efficiently, and in line with the law’s purpose.
“Our audit, which covered the period July 1, 1996 through December 31, 1997, assessed the initial implementation and administration of this program by DMA and EOEA to determine whether resources appropriated by Chapter 118E were being used efficiently and effectively and in a manner consistent with the intent of this legislation.”
The program had up to $30 million available, but the audit estimated only about $9 million would be spent, meaning many available dollars were not reaching seniors as intended.
“In fact, of the $30 million appropriated annually for this program, only approximately $9 million will be expended as of June 30, 1998.”
The auditor’s bottom line was that the program had useful goals but was not managed as effectively or efficiently as it should have been.
“As a result, there was inadequate assurance that the SPP was administered in the most effective and efficient manner.”
The auditor recommended better needs assessments, stronger outreach tracking, and possibly broader eligibility for income-eligible seniors.
“In order to ensure that SPP resources are used in the most effective and efficient manner, EOEA and DMA should ensure compliance with the reporting requirements of Chapter 118E, Section 16B.”
This mattered beyond one audit because lawmakers were already considering expanding prescription help, so weak administration could become a bigger problem if more seniors joined.
“Given the fact that, if new legislation is enacted into law, the number of elderly citizens within the Commonwealth who participate in the SPP will likely increase, it is important that the Commonwealth take measures to ensure that the SPP program is properly administered.”
SPP means Senior Pharmacy Program; DMA was the state medical assistance agency, EOEA was the elder affairs agency, HCCs were local home care organizations, and CVU was the unit processing applications.
“The applications are then sent to the CVU for verification and processing.”
6 figure(s) pending source verification - not shown
What the Auditor checked
- Partially Determine whether DMA’s and EOEA’s administration of the SPP met all the objectives of Chapter 118E.
- Partially Assess the effectiveness and efficiency of outreach, enrollment, and program monitoring activities at EOEA, DMA, and selected HCCs.
What the Auditor found
Why it matters: Program resources were underutilized, outreach and application processing costs increased, and income-eligible seniors with prescription drug coverage were excluded.
Standard: Chapter 118E, Section 16B, of the Massachusetts General Laws ( Chapter 118E, Section 16B, of the Massachusetts General Laws )
3 recommendations
- Ensure compliance with Chapter 118E, Section 16B reporting requirements.
- Conduct a formal needs assessment and provide results to the Legislative Joint Committee on Health Care.
- Consider expanding eligibility to include, to some degree, all income-eligible seniors.
Agency response & Auditor reply
Agency: "The fact that there was no formal determination of need study before the SPP was implemented is a legislative issue…"
Auditor: "Although we concur that the SPP was established as a pilot program by the state Legislature, we disagree that the Legislature intended, as DMA and EOEA states in its response, that the implementation of this program was “intended as a determination of need process in itself.”"
Why it matters: There was inadequate assurance that SPP was administered effectively, efficiently, and in compliance with contract terms and state regulations.
Standard: Sound business practices and 801 CMR 21.08 Contract Funding and Compensation ( 801 CMR 21.08 Contract Funding and Compensation )
3 recommendations
- Establish a formal five-year plan for SPP administration.
- Establish performance standards in all SPP contracts and evaluate vendors before recontracting.
- Improve program monitoring and evaluation procedures, including finance department invoice review and backup staffing.
Agency response & Auditor reply
Agency: "The contractor was carrying out the required responsibilities and responded to frequent changes in the SPP eligibility criteria to our satisfaction."
Auditor: "Given the fact that program participation was clearly going to be less than budgeted in this contract and according to the contract no additional services were going to be required, it seemed unreasonable as well as a questionable management decision to significantly increase rather than decrease the funding for this contact."
Verified dollar findings
Money paid out that the audit found should not have been - overpayments, unallowable and nonreimbursable charges, improper claims.