Office of the State Auditor - Annual Report Medicaid Audit Unit
March 15, 2017 · Read the full official report (PDF) ↗
Published March 15, 2017 Audit covers March 15, 2016 – March 14, 2017 Under Suzanne M. Bump · 2011–2023
source
“This report details findings that identified more than $17.6 million in unallowable, questionable, duplicative, unauthorized, or potentially fraudulent billings—a return of more than $15 for every dollar of funding in the Unit.”
Read the plain-English breakdown
This is the Massachusetts State Auditor's annual report on its Medicaid Audit Unit for March 15, 2016 through March 14, 2017.
“This report, which is being submitted by OSA in accordance with the requirements of Chapter 133, provides summaries of two performance audits involving the following:”
The Legislature required the Auditor to report on MassHealth audit findings, recovery efforts, MassHealth responses, and recommendations to improve recoveries.
“The state’s fiscal year 2016 budget (Chapter 133 of the Acts of 2016) requires that OSA submit a report to the House and Senate Committees on Ways and Means by no later than March 15, 2017 that includes (1) “all findings on activities and payments made through the MassHealth system”; (2) “to the extent available, a review of all post-audit efforts undertaken by MassHealth to recoup payments owed to the commonwealth due to identified fraud and abuse”; (3) “the responses of MassHealth to the most recent post-audit review survey, including the status of recoupment efforts”; and (4) “the unit’s recommendations to enhance recoupment efforts.””
MassHealth is a very large public program, serving about 1.9 million people and taking up a major share of the state budget, so billing mistakes or abuse can involve a lot of taxpayer money.
“Medicaid expenditures represent approximately 39% of the Commonwealth’s total annual budget.”
If you pay taxes, rely on MassHealth, or care about public services, the audits aim to recover misspent money and improve how MassHealth prevents waste and improper payments.
“Auditees reported action or planned action on 84% of our audit recommendations, which will improve operational efficiency and effectiveness.”
The main message is that the Auditor found significant improper billing and MassHealth said it was taking steps to recover money and save more going forward.
“MassHealth stated that it was pursuing up to $17,622,990 in recoveries as a result of the audit work, which will also provide annual savings of $8,629,316.”
MassHealth and audited providers are expected to keep implementing fixes, recoup overpayments where appropriate, and continue work on audits that were still underway.
“It also summarizes 13 MassHealth audits that are currently under way.”
The report is significant because it shows independent oversight finding millions in questionable payments and pushing MassHealth toward stronger controls, recoveries, and system changes.
“Since that time, OSA has maintained ongoing independent oversight of the MassHealth program.”
MassHealth is Massachusetts' Medicaid program; it helps pay for healthcare for eligible low- and moderate-income residents, seniors, people with disabilities, and families.
“The Massachusetts Executive Office of Health and Human Services administers the state’s Medicaid program, known as MassHealth, which provides access to healthcare services annually to approximately 1.9 million eligible low- and moderate-income children, families, seniors, and people with disabilities.”
6 figure(s) pending source verification - not shown
What the Auditor checked
- Did not comply Determine whether MassHealth had sufficient controls to ensure excluded providers did not bill or receive payments from MassHealth.
- Did not comply Determine whether MassHealth paid for AFC and GAFC services in accordance with applicable regulations and guidance.
- Did not comply Determine whether Dr. Singh billed MassHealth using appropriate E/M codes and documented services properly.
- Partially Determine whether dental providers billed and documented appropriate periapical radiographs.
- Did not comply Determine whether Hudson submitted claims for wheelchairs and wheelchair components in accordance with state regulations.
What the Auditor found
Why it matters: MassHealth made unallowable payments and members could receive substandard services, including prescriptions for controlled substances from excluded providers.
Standard: Federal laws and regulations prohibiting excluded providers from participating in Medicaid.
2 recommendations
- Establish adequate controls to ensure excluded-provider lists are current and used effectively.
- Recoup $476,787 in unallowable payments associated with excluded providers.
Agency response & Auditor reply
Agency: "MassHealth reported both recommendations to be in progress."
Why it matters: MassHealth paid for AFC services that duplicated home health services already funded by MassHealth.
Standard: Section 408.437 of Title 130 of the Code of Massachusetts Regulations. ( Section 408.437 of Title 130 of the Code of Massachusetts Regulations )
1 recommendation
- Do not pay for AFC services for MassHealth members who receive similar services while residing in rest homes.
Why it matters: Funds used for improper payments could have been used for medically necessary services for eligible members.
Standard: MassHealth requirements for Prescription for Transportation Forms and Medical Necessity Forms.
1 recommendation
- Recoup funds overpaid to Rite Way.
Agency response & Auditor reply
Agency: "Effective December 2015, MassHealth terminated Rite Way as an agency provider because Rite Way had not provided written 30-day notice to MassHealth that it would be suspending services as required by agency regulations."
Why it matters: MassHealth paid for duplicative services already required to be provided by long-term-care facilities.
Standard: State licensing regulations and MassHealth program rules for AFC and GAFC services.
3 recommendations
- Do not pay for AFC and GAFC services for members receiving similar services while residing in LTC facilities.
- Establish system edits to detect and deny AFC and GAFC claims for members residing in LTC facilities.
- Enact regulations specifically governing the GAFC program.
Agency response & Auditor reply
Agency: "MassHealth reported all three recommendations to be in progress."
Why it matters: MassHealth overpaid for routine or low-complexity cases billed as higher-complexity services.
Standard: Applicable laws, rules, and regulations governing E/M procedure codes and documentation.
2 recommendations
- Collaborate with MassHealth to repay approximately $55,390 in improper payments.
- Develop internal controls to ensure E/M claims are not upcoded.
Agency response & Auditor reply
Agency: "Dr. Singh also said that his practice had developed and implemented policies and procedures to ensure that claims are billed properly."
Why it matters: MassHealth paid for radiographs that were not supported by documented dental problems or allowed full-mouth series requirements.
Standard: MassHealth regulations for periapical radiographs.
2 recommendations
- Collaborate with MassHealth to repay approximately $290,417.agency: already implemented
- Do not bill MassHealth for periapical radiographs as part of routine biannual dental examinations.agency: already implemented
Agency response & Auditor reply
Agency: "Responding to the survey, Hampshire Family Dental and Orchard Family Dental stated that both practices have been taking all steps to ensure that radiographs are only taken in the event of medical necessity."
Why it matters: MassHealth overpaid for wheelchair components compared with prices Hudson charged or accepted from other payers.
Standard: State regulations requiring claims to be based on the lowest price charged or accepted for the same equipment. ( Section 22 of Title 114.3 of the Code of Massachusetts Regulations; 114 CMR 22.03 )
2 recommendations
- Submit claims for wheelchair components based on lowest accepted prices.agency: disagreed
- Develop, maintain, and make available to MassHealth a list of lowest accepted prices.agency: disagreed
Agency response & Auditor reply
Agency: "Hudson disputed five findings from the audit concerning $474,486 of improper billings for wheelchair components that were not billed at the lowest accepted price and $82,520 for wheelchair components that were individually priced."
Why it matters: MassHealth paid for radiographs not supported by documented pain, extractions, infection, change, or anomaly.
Standard: MassHealth regulations for periapical radiographs.
1 recommendation
- Collaborate with MassHealth to repay approximately $267,251.
Why it matters: MassHealth paid for radiographs that were not part of a triennial full-mouth series and lacked documented need.
Standard: MassHealth regulations for periapical radiographs.
1 recommendation
- Collaborate with MassHealth to repay approximately $246,497.
Why it matters: MassHealth paid for radiographs that were routine, unsupported by complete records, or lacked documented clinical need.
Standard: MassHealth regulations for periapical radiographs.
1 recommendation
- Collaborate with MassHealth to repay approximately $79,190 and improve future billing and documentation.
Why it matters: Members may not have a complete dental history if they need to see a new dental provider.
Standard: MassHealth regulations requiring documentation for periapical radiographs.
1 recommendation
- Ensure reasons periapical radiographs are taken are properly documented in member dental records.
Verified dollar findings
Money paid out that the audit found should not have been - overpayments, unallowable and nonreimbursable charges, improper claims.
Funds recovered or repaid to the Commonwealth.
Estimated or sample-projected amounts - shown separately because they are not a hard-identified dollar figure.
Identified dollar findings that do not fall in a named band.
Prior findings revisited
"According to the survey results, MassHealth reported that it has acted, or will act, on implementing 31 of 37 recommendations: 15 are fully implemented and 16 are in progress."
"MassHealth said it had revised its DME and oxygen payment tool as it refers to all repairs of mobility systems, including all components/accessories, to"
"Three recommendations were listed as in progress."
"Two recommendations from the audit were reported as fully implemented."
"MassHealth reported that one recommendation was in progress: it was seeking recoupment of the funds overpaid to Rite Way in the amount of $17,258,633."
"Three recommendations were listed as in progress."
"In response to the post-audit review survey, Asaker Medical Associates stated that it had implemented all five recommendations."
"Cataldo Ambulance Service, Inc. responded that it had implemented three recommendations."
"Two recommendations were reported as in progress."
"Hudson Home Health Care, Inc. responded that it had implemented one recommendation."
"MassHealth reported both recommendations to be in progress."
"Responding to the survey, Hampshire Family Dental and Orchard Family Dental stated that both practices have been taking all steps to ensure that radiographs are only taken in the event of medical necessity."
"MassHealth reported all three recommendations to be in progress."
More audits of this entity
Other Office of the State Auditor reports on Office of the State Auditor - Annual Report Medicaid Audit Unit , including the prior audits referenced above.
- Office of the State Auditor--Annual Report Medicaid Audit UnitMassHealth / Medicaid · March 15, 2016
- Office of the State Auditor-Annual Report Medicaid Audit UnitMassHealth / Medicaid · March 15, 2013
- Office of the State Auditor - Annual Report Medicaid Audit UnitMassHealth / Medicaid · March 13, 2015