Office of Medicaid (MassHealth) Medicaid Claims for Drug Screenings
April 17, 2013 · Office of Medicaid (MassHealth) · Read the full official report (PDF) ↗ · official site ↗
Published April 17, 2013 Audit covers July 1, 2008 – June 30, 2011 Under Suzanne M. Bump · 2011–2023
source
“MassHealth paid for unallowable and excessive member drug testing totaling approximately $9.1 million during the audit period, reflecting (a) unallowable drug testing for residential monitoring and (b) excessive member drug testing.”
Read the plain-English breakdown
This is a State Auditor review of MassHealth payments for Medicaid drug screening claims from July 1, 2008 through June 30, 2011.
“In accordance with Chapter 11, Section 12, of the Massachusetts General Laws, we conducted an audit of MassHealth drug testing claims during the period July 1, 2008 through June 30, 2011.”
Auditors looked at this because health care spending was rising and they wanted to know whether MassHealth was paying only for allowed, necessary, documented drug tests.
“Because of growing concern over increased healthcare expenditures, the Office of the State Auditor (OSA) initiated an audit of MassHealth.”
MassHealth is a very large public program, and a major share of its spending is paid by Massachusetts taxpayers.
“In fiscal year 2011, MassHealth paid healthcare providers more than $11.1 billion, of which approximately 40%1 was funded by the Commonwealth.”
For an ordinary resident, the issue is whether public money is being protected and used for medically necessary care instead of avoidable or improper testing costs.
“MassHealth could save millions of dollars annually by limiting or eliminating coverage of these tests.”
The auditors said better monitoring and stricter rules could have saved millions, especially by limiting very frequent drug testing.
“During our audit period, MassHealth could have saved approximately $7.8 million on drug tests if it had more effectively monitored its laboratory services program.”
MassHealth said it had already started changes, including voiding certain improper claims and considering tighter approval rules for some drug screening services.
“MassHealth told us that it is in the process of voiding the UMMMC claims relating to testing members for residential monitoring purposes.”
The report points to weaknesses in MassHealth controls: the agency did not always have enough claim information or system checks to stop improper payments before they happened.
“However, MassHealth does not gather specific information necessary to adequately monitor and validate the medical necessity of drug tests, including the ordering physician’s name and identification number, the diagnosis code, and the name and identification number of the substance abuse treatment facility (e.g., drug treatment program and hospital).”
“Unbundling” means billing separate charges for parts of a service that should have been billed together under one code, which can make payments higher than allowed.
“Unbundling occurs when multiple procedure codes are billed for a group of procedures that are covered by a single comprehensive code.”
7 figure(s) pending source verification - not shown
What the Auditor checked
- Did not comply Determine whether drug testing claims paid by MassHealth were medically necessary, accurate, supported, delivered, and compliant with applicable laws, rules, and regulations.
What the Auditor found
Why it matters: MassHealth paid approximately $9.1 million for unnecessary or unallowable drug testing, including $1.3 million for residential monitoring and $7.8 million in potential savings from high-frequency testing.
Standard: 130 CMR 401.416 and 130 CMR 401.411(B)(5) ( 130 Code of Massachusetts Regulations 401.416; 130 CMR 401.411(B)(5) )
3 recommendations
- Provide UMMMC with necessary assistance and oversight to reverse the 23,882 improper drug test claims totaling $1,339,352.agency: agreed
- Develop claims system edits to detect and deny drug tests ordered for residential monitoring.agency: agreed
- Develop requirements and monitoring to avoid overuse of laboratory drug testing.agency: agreed
Agency response & Auditor reply
Agency: "MassHealth does agree that more can be done to avoid overutilization of laboratory testing for drug screening by requiring prior authorization for certain drug screening services."
Auditor: "UMMMC and MassHealth have already taken extensive action to address many of the issues we observed during our audit."
Why it matters: The unbundled billing caused approximately $4.5 million in unallowable Commonwealth costs.
Standard: CMS National Correct Coding Initiative Policy Manual; 130 CMR 450.307(B)(2); MassHealth Transmittal Letter PHY-132 ( 130 CMR 450.307(B)(2); MassHealth Transmittal Letter PHY-132 )
1 recommendation
- Recover $4,500,177 in overpayments from Precision Testing Laboratories, Inc.; Lab USA Inc.; and New England Pain Institute.agency: partially agreed
Agency response & Auditor reply
Agency: "MassHealth is reviewing the State Auditor's documentation regarding $4,500,177 in claims from Precision Testing Laboratories Inc., Lab USA Inc., and New England Pain Institute to determine if any of the above identified providers submitted improper claims for quantitative testing billed in conjunction with drug screen services and will initiate recovery if appropriate."
Auditor: "MassHealth has promptly addressed this issue by restricting unbundled drug testing billing practices by developing system enhancements to its claims edits and by issuing Provider Bulletins."
Why it matters: Limiting or eliminating alcohol, specimen integrity, and confirmatory tests could save approximately $2.3 million annually.
Standard: SAMHSA guidance and medical necessity standards ( SAMHSA Technical Assistance Publication No. 32; SAMHSA TAP No. 32, Clinical Drug Testing in Primary Care 2012 )
1 recommendation
- Establish regulations and system edits disallowing confirmatory drug test claims when performed on the same day as a drug screen.agency: disagreed
Agency response & Auditor reply
Agency: "MassHealth does not agree with the savings projected in this audit recommendation…."
Why it matters: Duplicate billing caused approximately $313,623 in overpayments.
Standard: 130 CMR 450.307(B)(1) ( 130 CMR 450.307(B)(1) )
3 recommendations
- Recover duplicate claim overpayments and determine which claims from different providers should be repaid.agency: agreed
- Review claims system edits to identify and deny duplicate services.agency: agreed
- Notify providers that verification testing using the same specimen or another body fluid is duplicative and not covered.agency: agreed
Agency response & Auditor reply
Agency: "MassHealth's claims processing system currently has duplicate claims logic that denies claims for the same service code when billed by the same provider for the same member on the same date of service."
Auditor: "However, it appears that this system functionality was either not in place or ineffectual during our three-year audit period, since our examination of drug test claims – based on provider identification numbers, member identification numbers, dates of service, and procedure codes – identified 16,441 duplicate claims totaling $313,623."
Why it matters: The delay and incorrect implementation caused $107,309 in overpayments.
Standard: 114.3 CMR 20.00 and 130 CMR 450.259 ( 114.3 CMR 20.00; 130 CMR 450.259 )
2 recommendations
- Develop internal controls to ensure DHCFP pricing and unit changes are instituted promptly.agency: partially agreed
- Recover $107,309 in unallowable overpayments due to rate and unit adjustments.agency: partially agreed
Agency response & Auditor reply
Agency: "As stated above, MassHealth laboratory rates are tied to Medicare laboratory rates."
Auditor: "MassHealth’s response provides an explanation of why the rate and unit change were not implemented in a timely manner."
Why it matters: Hospitals were underpaid $190,010 until MassHealth corrected and reprocessed the claims.
Standard: MassHealth Fee for Service payment methodology for laboratory drug tests
1 recommendation
- Research similar incorrect payment claims, adjust the claims processing system, and adjust hospital payments as necessary.agency: already implemented
Agency response & Auditor reply
Agency: "MassHealth has reprocessed claims for drug screen services billed under procedures codes G0431 and G0434 that were incorrectly paid according to the acute outpatient departments PAPE payment methodology."
Auditor: "As noted in our report, MassHealth took action during the audit to correct the system error that was causing the incorrect payment for G0431 and G0434 claims."
Why it matters: Claims totaling $41,258 were questionable because required laboratory records, orders, test results, or standing order documentation were missing or deficient.
Standard: 130 CMR 410.457, 130 CMR 410.458, and 130 CMR 401.416(B) ( 130 CMR 410.457; 130 CMR 401.416(B) )
3 recommendations
- Ensure CHA and UMMMC develop and maintain documentation in accordance with laboratory service request regulations.agency: agreed
- Ensure UMMMC develops procedures for proper use of standing orders for drug tests.agency: agreed
- Issue a Provider Bulletin restating laboratory documentation and recordkeeping requirements.agency: agreed
Agency response & Auditor reply
Agency: "MassHealth agrees that a reminder Provider Bulletin would be helpful and intends to issue such Bulletin as soon as possible."
Auditor: "We agree with MassHealth’s plan to issue a Provider Bulletin restating the documentation requirements for laboratory services, including drug tests."
Verified dollar findings
Money paid out that the audit found should not have been - overpayments, unallowable and nonreimbursable charges, improper claims.
Identified dollar findings that do not fall in a named band.
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