Audit of MassHealth Drug Screen and Test Claims Objectives, Scope, and Methodology

An explanation of what this audit examined and how it was conducted.

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 MassHealth for the period March 1, 2013 through December 31, 2016. We expanded our audit testing through June 30, 2017 to determine how effective MassHealth’s use of its NetReveal predictive modeling software was in detecting instances of unbundling before making payments.

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 are our audit objectives, indicating the questions we intended our audit to answer, the conclusion we reached regarding each objective, and where each objective is discussed in the audit findings.

 

Objective	Conclusion
Does MassHealth properly identify and deny the payment of unbundled drug tests?	No; see Findings 1 and 2
Does MassHealth properly identify and deny the payment of duplicate drug tests and screens?	No; see Finding 3

We gained an understanding of the design of the payment process for drug test claims and the related internal controls over this process that we deemed significant to our audit objectives. We also identified and tested key controls over the payment process for drug tests and screens that were significant to our audit objectives and evaluated the design and effectiveness of those controls.

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 that project, OSA reviewed existing information about security policies for data, tested selected information-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 valid data, (4) looking for dates outside specific time periods, and (5) tracing samples of claims stored in the Data Warehouse² to source documents and MMIS. Based on these procedures and other audit procedures to test system edits discussed below, we determined that the data we obtained for this audit were sufficiently reliable for the purposes of this report.

We used data analytics to test all 2,175,397 drug test claims from the audit period for duplicate service payments. Our analysis tested for any instances where MassHealth paid for the same procedure code more than once for the same member on the same day, as well as whether it paid the same billing provider or separate billing providers. Additionally, we performed data analysis on all 2,175,397 drug test claims from the audit period to identify instances of MassHealth members receiving the same drug test on the same day when different procedure codes were billed and paid for. We met with MassHealth’s Provider Compliance Unit (PCU) to understand its process for identifying and recouping duplicate payments. To determine whether PCU had started recoupment efforts on any of the potentially duplicate payments we identified, we performed testing on a nonstatistical sample of 20 out of the 15,510 identified duplicate claims to determine whether MassHealth denied or recouped these improper payments.

To identify drug tests that were billed using unbundling, we used data analytics to identify all instances out of the entire population of 2,175,397 drug test claims from the audit period in which MassHealth paid for a qualitative drug screen for a member who also received a quantitative drug test on that same day. This analysis tested whether the system edit MassHealth established in 2013 for unbundled drug tests effectively denied payments for quantitative drug tests as designed. We performed further data analyses on all 2,175,397 drug test claims to identify new instances of unbundled billing for drug tests and screens. On December 1, 2011, the then–Division of Health Care Finance and Policy³ amended Section 20 of Title 130 of the Code of Massachusetts Regulations to reduce the payment rate for drug screens from $76.64 for up to eight drug classes to $48.78 for an unlimited number of drug classes. Based on this information, we used the newly established rate ($48.78) or the maximum number of covered drug classes (five) for drug screens as a benchmark for identifying further unbundled billings by providers.

We performed additional analyses on all 76,727 unbundled drug test claim exceptions⁴ to determine whether this problem was associated with the same laboratory or two laboratories submitting claims for the same drug tests for the same member on the same day. Since the procedure codes for drug tests changed in January 2015 and again in January 2016, we performed separate reviews and analyses for unbundled drug test billing to determine whether the edits properly denied unbundled drug test claims. We tested a nonstatistical sample of 50 out of 68,185 identified unbundled drug tests from March 1, 2013 through December 31, 2016 to determine whether MassHealth’s system edit properly recorded an adjustment hold on the claim to signify that a recoupment had occurred.

For all tests that used nonstatistical sampling, we did not project any identified errors to the population of drug test claims.

MassHealth created prepayment system edits in 2017 that were intended to deny payment of unbundled drug test claims. To assess whether the NetReveal prepayment system edits denied payment for such claims between January 1, 2017 and June 30, 2017, we performed data analyses on all 191,874 drug tests billed during this period. We found that 8,542 of the billed drug test claims were for unbundled drug tests, totaling $487,863.

 

2. The Data Warehouse is MassHealth’s central repository for Medicaid member identification and claim payment information.

3. The Division of Health Care Finance and Policy was later abolished and its duties distributed among the Health Policy Commission, the Center for Health Information and Analysis, the Office of Medicaid, and the Commonwealth Health Insurance Connector Authority.

4. An exception, in this case, is any instance of a quantitative drug test being billed for the same member on the same day as a qualitative drug screen.

Date published:	April 19, 2018