| Organization: | Office of the State Auditor |
|---|---|
| Date published: | October 30, 2025 |
Executive Summary
The Office of the State Auditor (OSA) receives an annual appropriation for the operation of a Medicaid Audit Unit to help 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, administers the Medicare program and works with state governments to administer state Medicaid programs.
OSA has conducted a performance audit of MassHealth’s durable medical equipment (DME) providers for the period January 1, 2021 through December 31, 2023. During this period, MassHealth paid $165,475,809 for 2,282,131 DME claims. The purpose of this audit was to determine whether MassHealth monitored billing and authorization practices for DME providers and prescribers and monitored various death records to ensure that DME was not ordered for or prescribed to members who had already passed away.
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 disclosed weaknesses in MassHealth’s claim processing system and improper billing practices by MassHealth providers, which identified millions of dollars in potentially improper payments. As with any government program, public confidence is essential to the success and continued support for public expenditures, such as the state’s Medicaid program. Our audit is designed to identify issues that will help improve the Medicaid program, so taxpayers know that their dollars are spent prudently and that there is a system of continuous improvement to support improved efficiency and service over time.
Below is a summary of our findings, the effects of those findings, and our recommendations, with hyperlinks to each page listed.
| Finding 1 | MassHealth paid an estimated $521,526 for DME that could not be verified as having been ordered by an eligible provider. |
| Effect | When providers submit claims for DME to MassHealth without the relevant information required to identify the ordering provider, MassHealth risks paying for DME that was not ordered by an eligible provider. Unsupported DME claims represent unallowable costs to the Commonwealth, and MassHealth could have used this money to provide additional services to other MassHealth members or reduce the cost of its services to the Commonwealth. |
| Recommendations |
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| Finding 2 | MassHealth paid $31,724 for DME that was ordered by providers who were excluded from participating in Medicaid. |
| Effect | MassHealth members may be put at risk when excluded providers are allowed to continue ordering DME on their behalf because they may be prescribed DME that they do not need by providers who are no longer licensed to prescribe it. Additionally, if MassHealth pays claims for DME prescribed by excluded providers, MassHealth is spending money that could have been used to provide additional services to other MassHealth members or reduce the cost of its services to the Commonwealth. |
| Recommendations |
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| Finding 3 | MassHealth paid providers $27,400 for DME that was ordered for members who were deceased. |
| Effect | By not always identifying deceased members quickly enough, MassHealth risks paying fraudulent claims or overpaying its providers for services that were not rendered. |
| Recommendations |
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