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Audit of Claims Submitted by Reen & Reen, DMD, P.C. to MassHealth Objectives, Scope and Methodology

An overview of the purpose and process of auditing the claims submitted to MassHealth by Reen & Reen, DMD, P.C.

Table of Contents

Overview

In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor (OSA) has conducted a performance audit of Reen & Reen, DMD, P.C. (R&R) for the period July 1, 2012 through June 30, 2017.

We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Below is our audit objective, indicating the question we intended our audit to answer, the conclusion we reached regarding the objective, and where the objective is discussed in the audit findings.

Objective

Conclusion

  1. Did R&R properly bill MassHealth for orthodontic services and maintain documentation in member dental records to support these services?

No; see Findings 1 and 2

Auditee Selection

During our audit period, MassHealth paid orthodontists approximately $173.9 million for orthodontic services. To identify the orthodontists that represented the highest risk, we performed data analytics on all orthodontic claims paid during the audit period to identify (1) the frequency and cost of orthodontic services performed by providers and (2) service trends and billing anomalies that indicate potentially improper claims. Our data analytics identified high orthodontic costs and a high frequency of orthodontic services associated with certain providers. Based on the results of this analysis, we selected R&R for audit.

Methodology

We evaluated the design of R&R’s billing processes for orthodontic services and the related internal controls over these processes that we deemed significant to our audit objective.

We obtained data from MassHealth’s Medicaid Management Information System (MMIS) for testing purposes. To test the reliability of these data, we relied on the work performed by OSA in a separate project that tested certain information system controls in MMIS, which is maintained by the Executive Office of Health and Human Services. As part of the work performed, OSA reviewed existing information, tested selected system controls, and interviewed knowledgeable agency officials about the data. Additionally, we performed validity and integrity tests on all claim data, including (1) testing for missing data, (2) scanning for duplicate records, (3) testing for values outside a designated range, (4) looking for dates outside specific periods, and (5) tracing a sample of claims queried to source documents. Based on these procedures, we determined that the data obtained were sufficiently reliable for the purposes of this report.

We requested, and received when available, the following documentation from R&R:

  • member dental records
  • an employee list and job descriptions
  • orthodontists’ work schedules
  • members’ appointment histories
  • office locations and business hours
  • orthodontists’ certifications from an advanced education program approved by the Commission on Dental Accreditation

We selected a statistically random sample of 180 out of 35,725 paid orthodontic claims from the audit period, using an expected error rate of 50%, a desired precision of 15%, and a confidence level of 95%, to determine whether R&R properly billed MassHealth for these services. The expected error rate is the anticipated rate of occurrence of the error of improper billing for services; 50% is the most conservative. Desired precision is a measure of how precise the actual error rate is. Confidence level is the numerical measure of how confident one can be that the sample results reflect the results that would have been obtained if the entire population had been tested. For this audit, we designed our sample so that we would be 95% confident that the actual error rate in the sample of 180 claims would be within a range of +/- 7.5%, or 15%, of the error in the population of 35,725 claims. This 15% represents what is called the point estimate for this sample. For all tests that used statistical sampling, we did not project any identified errors to the population of orthodontic services because for Finding 1, there was no financial impact, and for Finding 2, the range of the actual error (7.2%) compared to the point estimate (+/- 7.5%) was too low.

To determine whether R&R properly documented and billed MassHealth for orthodontic services, we reviewed information in the members’ dental records for the sampled claims, including the servicing providers’ names, servicing providers’ credentials, billing notes, appointment histories, and requests for prior authorization. We also reviewed the parameters of prior authorization and determined whether each member had private insurance; if they did, we requested explanations of benefits or denials.

We used the Executive Office of Health and Human Services’ website to determine the statuses of licenses held by R&R’s orthodontists during the audit period. We also reviewed MMIS and MassHealth provider contracts to determine whether the orthodontists at R&R were properly certified as MassHealth providers.

We met with MassHealth officials to discuss our preliminary findings and to further our understanding of the prior-authorization process for orthodontic services.

Date published: June 8, 2018
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