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Audit of the Office of Medicaid (MassHealth)—Payments for Hospice-Related Services for Dual-Eligible Members Objectives, Scope, and Methodology

An overview of the purpose and process of auditing the Office of Medicaid (MassHealth)—Payments for Hospice-Related Services for Dual-Eligible Members.

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 MassHealth’s administration of claims for hospice-related services provided to dual-eligible members for the period January 1, 2015 through July 31, 2019.

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 this report.

Objective

Conclusion

  1. Does MassHealth administer payments to non-hospice providers for hospice-related services in compliance with Section 450.316 of Title 130 of the Code of Massachusetts Regulations?

No; see Findings 1, 2, 3a, 3b, and 4

Methodology

To achieve our audit objective, we gained an understanding of the internal control environment related to the objective by reviewing applicable MassHealth and federal regulations and other authoritative guidance, as well as conducting inquiries with MassHealth officials and management at 59 hospice providers. To obtain sufficient, appropriate audit evidence to address our audit objective, we conducted further audit testing as follows.

Hospice Sampling Strategy

Staff members at the United States Department of Health and Human Services’ Office of Inspector General (HHS OIG) gave us a data file of all claims paid by MassHealth for dual-eligible members who received hospice services between January 1, 2015 and July 31, 2019. We then worked with HHS OIG staff members to review the information in this data file and, using a risk-based approach, determined which Medicaid claim types should be tested. This risk-based approach included selecting claim types that had the highest dollar amounts and were typically paid by Medicare instead of MassHealth. We also excluded any professional or inpatient claims that were less than $500 and durable medical equipment (DME) or transportation claims that were less than $50. The claim types selected included ones that were submitted to MassHealth by non-hospice providers and included professional services, inpatient services, DME, and transportation. Professional claims include such things as home health aide services, homemaker services,7 and companion care. Inpatient claims relate to hospital stays. DME includes medical equipment such as wheelchairs, incontinence products, and wound dressings. Transportation claims are incurred when a MassHealth member is transported to a hospital by an ambulance. The table below details the total population of the four claim types, as well as the total amounts paid for these claims during our audit period.

Total Population of Claims

Claim Type

Total Claims

Total Amount Paid

Professional

14,755

$63,771,564

Inpatient

298

433,293

DME

6,015

793,391

Transportation

2,421

287,354

Total

23,489

$65,285,602

 

OSA collaborated with HHS OIG to design the sampling method to select the statistical samples for each of the four claim types. HHS OIG and OSA selected four statistical random samples, totaling 400 of 23,489 paid claims for services provided to dual-eligible members during the audit period.

  • HHS OIG and OSA selected a stratified random sample of 100 claims from the population of 14,755 professional claims. HHS OIG and OSA used an expected error rate of 50%, a desired precision of 18%, and a confidence level of 90%. The population was separated into four strata, based on the dollar value of the individual claims. HHS OIG and OSA randomly selected 25 claims from each stratum, for a total of 100 sampled claims.
  • HHS OIG and OSA selected a stratified random sample of 100 claims from the population of 298 inpatient claims. HHS OIG and OSA used an expected error rate of 50%, a desired precision of 12%, and a confidence level of 90%. The population was separated into two strata, based on the dollar value of the individual claims. HHS OIG and OSA randomly selected 90 claims from the first stratum and 10 claims from the second, for a total of 100 sampled claims.
  • HHS OIG and OSA selected a stratified random sample of 100 claims from the population of 6,015 DME. HHS OIG and OSA used an expected error rate of 50%, a desired precision of 20%, and a confidence level of 90%. The population was separated into three strata, based on the dollar value of the individual claims. HHS OIG and OSA randomly selected 34 claims from the first stratum and 33 claims each from the second and third, for a total of 100 sampled claims.
  • HHS OIG and OSA selected a stratified random sample of 100 claims from the population of 2,421 transportation claims. HHS OIG and OSA used an expected error rate of 50%, a desired precision of 16%, and a confidence level of 90%. The population was separated into three strata, based on the dollar value of the individual claims. HHS OIG and OSA randomly selected 34 claims from the first stratum and 33 claims each from the second and third, for a total of 100 sampled claims.
  • For this audit, HHS OIG and OSA designed our samples so that we would be 90% confident that the actual error rate in the population would be within a specific range of the error rate in our samples. For each claim type, the population was separated into two, three, or four strata based on the dollar value of the individual claims. The table below details each sampling stratum.

Sampling Strata

Claim Type

Stratum

Sample Size

Population Claim Count

Claim Total

Dollar Range of Claims in Stratum*

Professional

1

25

9,395

$10,855,610

$500–$3,056.20

Professional

2

25

2,504

    14,267,759

$3,065.46–$10,086.49

Professional

3

25

1,802

    19,854,002

$10,089.40–$13,615.20

Professional

4

25

1,054

    18,794,193

$13,632.30–$55,530.00

Total

 

100

14,755

$63,771,564

 

Inpatient

1

90

288

$355,296

$503.70–$1,974.00

Inpatient

2

10

10

           77,997

$2,680–$22,176.65

Total

 

100

298

$433,293

 

DME

1

34

3,746

$315,945

$50.00–$133.00

DME

2

33

2,043

         352,760

$133.20–$273.60

DME

3

33

226

         124,686

$274.20–$4,964.28

Total

 

100

6,015

$793,391

 

Transportation

1

34

1,562

$100,172

$50.14–$96.40

Transportation

2

33

567

           88,925

$97.36–$245.58

Transportation

3

33

292

           98,257

$250.22–600.06

Total

 

100

2,421

$287,354

 

Grand Total

 

400

23,489

$65,285,602

 

*     To show the specific strata we used in our sampling method, we did not round these dollar amounts.

Hospice Expenditure Testing

To review the documentation for the 400 claims in our sample, OSA conducted in-person or virtual site visits at 59 of the 81 hospice providers8 that served MassHealth members during our audit period (see Appendix). During our site visits, we reviewed the healthcare files of the members who received the services in the sampled claims and determined whether all required forms were properly completed in accordance with MassHealth and Medicare regulations. For each file, we also reviewed each member’s plan of care to determine whether the service in the sampled claim was listed in the member’s plan of care and therefore should have been paid for by the hospice provider and not MassHealth. We also sent examples of scenarios from our sample to the Centers for Medicare & Medicaid Services (CMS) and asked CMS for further clarification regarding who should have paid the claim. Based on the results of the testing of our sampled claims, we projected a statistically valid estimate of the dollar amounts that we found to be improper. We conducted interviews with hospice provider staff members to get a better understanding of the hospice benefit and to clarify any questions we had about the documentation provided.

Hospice Enrollment Testing

For the 400 claims in our sample population, we reviewed each member’s Medicare or MassHealth Hospice Election Form to verify that it was accurately completed and submitted to Medicare and MassHealth. We compared the information in a data file provided to us by HHS OIG, which listed all members who had chosen to receive hospice care as reported by hospice providers to Medicaid, to the members who had chosen to receive hospice care as reported in MassHealth’s Medicaid Management Information System (MMIS) to determine whether MMIS accurately reflected that the members associated with the 400 claims had chosen to participate in hospice.

In our testing, we found that for 223 of the 400 claims in our sample, although the members had chosen to receive hospice services, MassHealth was unaware of this fact (see Finding 1). We provided the results of our testing to MassHealth for its review.

Data Reliability

We obtained data from MMIS for testing purposes. To test the reliability of the data, we relied on the work performed by OSA in two separate projects completed in 2015 and 2019 that tested certain information system controls in MMIS. As part of that work, 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, and (3) looking for dates outside specific periods. Based on these procedures, we determined that the data obtained were sufficiently reliable for the purposes of this report.

HHS OIG obtained data from the Transformed Medicaid Statistical Information System (TMSIS), a data system used by CMS for testing purposes. To test the reliability of the data, HHS OIG performed validity and integrity tests on all the claim data it provided to us, including (1) performing electronic testing, (2) reviewing existing information about the data and the system that produced them, and (3) tracing a random sample of claims from TMSIS to MMIS. OSA reviewed HHS OIG’s reliability assessment of the TMSIS data and agreed with the methodology and with the evaluation of the Medicare datasets. Therefore, we agree with the HHS OIG conclusion that the data are reliable.

For the claims in the data file provided to us by HHS OIG as stated above, we performed validity and integrity tests on the data provided, including (1) testing for missing data, (2) testing for duplicates, (3) looking for dates outside specific periods, and (4) tracing our test sample of data we received from HHS OIG to data we obtained from MMIS. Based on these procedures, we determined that the data obtained were sufficiently reliable for the purposes of this report.

For our hospice enrollment testing, MassHealth provided us with a data extract of all members whose MMIS records included the code HSPC, indicating that they had chosen to receive hospice care during the period January 1, 2015 through December 11, 2020 (the date the information was extracted from MMIS). We performed validity and integrity tests on the data provided, including (1) testing for missing data, (2) testing for duplicates, (3) testing for data validity errors (specifically character fields that contained invalid printable characters or date and time fields that contained invalid dates and times), and (4) tracing a sample of data back to MMIS. Based on these procedures, we determined that the data obtained were sufficiently reliable for the purposes of this report.

At the end of our audit fieldwork, we gave the Executive Office of Health and Human Services (EOHHS) a copy of our draft report for its review, comments, and concurrence. We then collaborated with HHS OIG in developing replies to EOHHS’s comments, which are included in this report.

7.     Homemaker services consist of help preparing meals, shopping for groceries, picking up medications, and performing housekeeping duties.

8.     There were 81 providers as of January 2021.

Date published: July 20, 2021

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