MA Auditor Finds More Than $17.6M in MassHealth Fraud

Bump Says Findings Pointing to Persistent Deficiencies in Payment System

BOSTON, MA — Auditor Suzanne M. Bump today announced that during a one year period, her office’s Medicaid Audit Unit identified more than $17.6 million in unallowable, questionable, duplicative, unauthorized, or potentially fraudulent billings at MassHealth. She estimates that corrective actions would save $8.6 million annually.

“The MassHealth program is large, complex, and expensive. It is also too susceptible to improper payments to providers. These audits follow years of audits revealing deficiencies in the agency’s claims administration,” Bump said. “There are far too many provider bills that get paid despite the fact they are duplicative of other payments, lack supporting documentation, or violate regulations governing what is and what is not reimbursable.

It is frankly frustrating to see evidence of so many ways that money is being inappropriately spent. MassHealth administrators need to redouble their efforts to improve their claims review systems and policies. I intend to work with the Legislature to ensure more accountability in the wake of these audits.”

 The report highlights findings from audits released in the past year which demonstrate the claims processing deficiencies at MassHealth, including:

·       Payments to providers prohibited from participating in the program due to violation of federal laws or regulations;

·       Duplicative payments for individuals receiving overlapping adult foster care and group adult foster care services; and

·       Payments to multiple dental providers who provided services that are inconsistent with MassHealth regulations.

 The report also lists audits currently underway at the MassHealth audit unit. One audit, concerning payments for urine drug screenings, is being conducted specifically because MassHealth does not appear to have acted on 2012 audit recommendations to contain costs.  

 In fiscal year 2016, MassHealth paid healthcare providers $14.8 billion for healthcare services for approximately 1.9 million low-and-moderate income individuals. MassHealth is the state’s largest program and accounts for approximately one-third of the state budget.  

 The Medicaid Audit Unit was established by the legislature in fiscal year 2007 to detect fraud, waste and abuse in the MassHealth program. The Unit had a budget of approximately $1.2 million in fiscal year 2017, a slight funding decrease from the previous year. Despite the budget decrease, the Unit increased the number of audits worked on during the period to 24, up from 19 the previous year. The increase in productivity is due to the increased use of data analytics, which allows audits to be conducted more efficiently and in a timelier manner.

 The report is here BUMP2.

 About the Office of the State Auditor

The Office of the State Auditor conducts performance audits of state government’s programs, departments, agencies, authorities, contracts, and vendors. With its reports, the OSA issues recommendations to improve accountability, efficiency, and transparency. The OSA has identified approximately $1.1 billion in unallowable, questionable, or potentially fraudulent spending and saving opportunities for the Commonwealth since 2011. Last year, auditees report implementation of 91 percent of the OSA’s audit recommendations. This year, the office received the Einhorn-Gary Awardfor its success furthering government accountability.