Audit  Audit of the Office of Medicaid (MassHealth) - Review of Capitation Payments with Multiple Identification Numbers

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 and 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.

In collaboration with the US Department of Health and Human Services Office of Inspector General’s Boston office, OSA has conducted an audit of capitation payments made by MassHealth to members with multiple identification numbers (IDs) for the period January 1, 2019 through December 31, 2022. During this period, MassHealth made approximately $3.2 billion total in capitation payments to its two contracted managed care organizations (MCOs), which were Tufts Health Together and WellSense Essential MCO. These MCOs were responsible for providing healthcare services to members and were paid a fee per person (the capitation payment) for coordinating their care.

The purpose of this audit was to determine whether MassHealth ensured that it did not make capitation payments to MCOs on behalf of members who were assigned more than one member ID. OSA conducted the audit as part of our ongoing independent statutory oversight of the state’s Medicaid program.

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