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Audit of the Office of Medicaid (MassHealth)—Review of Accounts Receivable Objectives, Scope, and Methodology

An overview of the purpose and process of auditing the Office of Medicaid (MassHealth)—Review of Accounts Receivable.
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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 certain activities of MassHealth for the period January 1, 2015 through December 31, 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. Is MassHealth effectively managing its accounts receivable with regard to write-offs of uncollectible accounts receivable?

No; see Finding 1

Methodology

We gained an understanding of the internal controls over recording accounts receivable and writing off uncollectible accounts receivable that we deemed significant to our audit objective through inquiries with MassHealth officials. In addition, we performed the following procedures to obtain sufficient, appropriate audit evidence to address our audit objective. 

We obtained a list of accounts receivable as of December 31, 2017 from MassHealth officials and performed the following procedures to assess the reliability and validity of the list: (1) testing for missing data, (2) scanning for duplicate records, (3) looking for dates outside specific time periods, (4) tracing a sample of entries to source documents, and (5) reconciling the list of accounts receivable to the Maintenance Management Information System (MMIS). To do so, we selected from MMIS a nonstatistical judgmental sample of 194 accounts receivable and reconciled fields such as original amount owed, recoupment amount, and outstanding balance to the December 31, 2017 accounts receivable list. For the data obtained from MMIS, we relied on the work performed by OSA in a separate project that tested certain information system controls, and we interviewed knowledgeable agency officials about the data. Based on these procedures, we determined that the data obtained were sufficiently reliable for the purposes of this report.  

MassHealth management told us that the agency had not written off any accounts receivable during the audit period. We analyzed the length of time accounts receivable had not been received in full and identified those that might be uncollectible.

Date published: October 18, 2019

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