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Audit Audit of the Office of Medicaid (MassHealth)—Review of Claims Paid for Pharmacy Drugs

Audit found that the program improperly paid for 25,144 prescription claims, totaling $982,535, during the two-and-a-half-year audit period (January 1, 2015 through June 30, 2017).

Organization: Office of the State Auditor
Date published: August 29, 2019

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 payments for pharmacy drugs dispensed to certain MassHealth members, including those enrolled in its Primary Care Clinician Plan1 and those who receive services paid for by MassHealth’s fee-for-service payment model,2 during the period January 1, 2015 through June 30, 2017. The purpose of this audit was to determine whether MassHealth paid for pharmacy drugs in accordance with its regulations.

This audit was conducted as part of OSA’s ongoing independent statutory oversight of the state’s Medicaid program. Several of our previously issued audit reports have disclosed significant weaknesses in MassHealth’s claim-processing system and improper billing practices by MassHealth providers, which resulted in millions of dollars in potentially improper claim 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 our recommendation, with links to each page listed.

Finding 1a

MassHealth paid pharmacies for unauthorized prescription drug refills totaling $300,863.

Finding 1b

MassHealth paid $526,229 for refills of emergency (i.e., non-refillable) drug fills.

Finding 1c

MassHealth improperly paid $155,443 for over-the-counter (OTC) drugs supplied to members living in institutional settings.

Recommendation

MassHealth should ensure that system controls are developed and implemented in the Pharmacy Online Processing System to prevent payments to pharmacies for unauthorized prescription drug refills, refills of emergency (non-refillable) drug fills, and OTC drugs supplied to members living in institutional settings.

 

A PDF copy of the audit of the Office of Medicaid (MassHealth) - Review of Claims Paid for Pharmacy Drug is available here.

 

1.    This is MassHealth’s statewide managed-care plan for its enrolled members.

2.    This payment model pays healthcare providers for the number of services provided or procedures ordered.

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Contact

Phone

Fax

(617) 727-3014

Address

Massachusetts State House
Room 230
Boston, MA 02133
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