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Audit  Audit of Office of Medicaid (MassHealth)—Review of Drug Testing Frequency

Audit of MassHealth calls on the agency to improve its oversight of the frequency and documentation of drug testing claims. The audit examined the period from July 1, 2012 through June 30, 2016.

Organization: Office of the State Auditor
Date published: July 27, 2018

Executive Summary

The Office of the State Auditor (OSA) receives an annual appropriation for the operation of a Medicaid Audit Unit to help prevent and identify fraud, waste, and abuse in the Commonwealth’s Medicaid program. This program, known as MassHealth, is administered under Chapter 118E of the Massachusetts General Laws by the Executive Office of Health and Human Services through the Division of Medical Assistance. Medicaid is a joint federal-state program created by Congress in 1965 as Title XIX of the Social Security Act. At the federal level, the Centers for Medicare & Medicaid Services, within the US Department of Health and Human Services, administer the Medicare program and work with state governments to administer state Medicaid programs.

OSA has conducted an audit of MassHealth’s drug tests for the period July 1, 2012 through June 30, 2016. During this period, MassHealth paid laboratories approximately $39,771,152 to provide drug tests for 240,711 MassHealth members. The purpose of this audit was to review the drug tests that MassHealth paid for during the audit period and determine whether the nature and frequency of testing complied with MassHealth regulations, which allow authorized prescribers treating MassHealth members to order and use drug tests for diagnosis, treatment, or otherwise medically necessary purposes.

The audit was conducted as part of OSA’s ongoing independent statutory oversight of the state’s Medicaid program. A previously issued OSA audit report (No. 2012-1374-3C) disclosed significant weaknesses in MassHealth’s claim-processing system for drug tests, which resulted in millions of dollars in potentially improper payments. As with any government program, public confidence is essential to the success and continued support of the state’s Medicaid program.

Below is a summary of our findings and recommendations, with links to each page listed.

Finding 1

MassHealth may have paid as much as $6.2 million for unnecessary drug tests.


  1. MassHealth should establish controls to ensure that it only pays for drug tests that are used for diagnosis, treatment, and otherwise medically necessary purposes.
  2. MassHealth should ensure that all claim submissions include the referring provider’s identification number. MassHealth should use this information to create a system edit and/or monitor claims to limit payments for drug tests to those ordered by authorized prescribers who are currently treating the members.
  3. MassHealth should require laboratories to send all drug test results directly to the prescribing providers who ordered them.

Finding 2

MassHealth may have paid for improper drug tests provided to members residing in sober homes.


  1. If MassHealth wants to continue to enforce its current regulations and not allow providers to bill for drug tests for residential monitoring, it should work with officials at the Bureau of Substance Abuse Services to ensure that it does not pay for such tests. Sober homes may want to explore the possibility, if practical, of using low-cost drug test kits that can be used on site to provide immediate results rather than having laboratories perform these tests.
  2. MassHealth should perform periodic reviews of laboratory drug test order forms and laboratory result reports to monitor whether laboratories are billing for medically necessary drug tests.

Finding 3

MassHealth paid $21,073 for drug tests that were not supported by proper documentation.


  1. MassHealth should work with drug test laboratories to ensure that they obtain and retain proper documentation of drug test orders and results for each drug test provided to a MassHealth member.
  2. MassHealth should collaborate with the laboratory discussed in this finding to establish a plan for repayment of the $21,073 in overpayments for improper laboratory drug test billings.


A PDF copy of the audit of the Office of Medicaid (MassHealth) - Review of Drug Testing Frequency is available here

List of Abbreviations


Bureau of Substance Abuse Services


Code of Massachusetts Regulations


Centers for Medicare & Medicaid Services


Department of Public Health


evaluation and management


Massachusetts Alliance for Sober Housing


Medicaid Management Information System


National Provider Identifier


Office of the State Auditor


Substance Abuse and Mental Health Services Administration


substance use disorder




(617) 727-3014


Massachusetts State House
Room 230
Boston, MA 02133

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