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, 2018 through September 30, 2021.
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.
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Objective |
Conclusion |
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No; see Finding 1 |
To achieve our audit objective, we gained an understanding of the internal control environment related to the objective by reviewing applicable policies and procedures and MassHealth’s internal control plan and by conducting interviews with MassHealth officials. In addition, we performed the following procedures to obtain sufficient, appropriate audit evidence to test the objective.
Capitation Payment Sampling Strategy and Information Analysis
To determine whether MassHealth ensured that it did not make capitation payments to MCOs on behalf of ineligible members who resided outside of Massachusetts, we obtained a capitation payment data file from the Transformed Medicaid Statistical Information System (T‑MSIS) provided by the United States Department of Health and Human Services’ Office of Inspector General (HHS OIG). The T-MSIS data file included capitation payments for all 50 states, the District of Columbia, and the United States territories made during the audit period. We sorted the capitation payment data to identify those instances in which MassHealth made at least five consecutive monthly capitation payments to MCOs for members who concurrently had capitation payments made to MCOs on their behalf by the Medicaid program of another state or United States territory.
To determine our test population, we ranked each state and territory based on the total dollar value of the concurrent payments and then selected the nine states and one territory that had the highest dollar value of concurrent capitation payments made during the audit period. Our final population included the following: California, Florida, Georgia, New Hampshire, New Jersey, North Carolina, Ohio, Pennsylvania, Rhode Island, and Puerto Rico.
OSA collaborated with HHS OIG to design a statistically valid sampling methodology. HHS OIG and OSA chose a sample with a 90% confidence level and a 50% expected error rate. We separated the data into four strata based on the total dollar value of capitation payments made concurrently with another state or territory. Strata one, two, and three included members who had at least 5 months of consecutive concurrent capitation payments made by another state, and stratum four included members who had concurrent capitation payments made by another state or territory for all 45 months of the audit period. HHS OIG and OSA then selected a random, statistical sample of 100 members out of a total of 31,720 members in the audit population. The table below details each of the four strata to which each member was assigned for our data analysis purposes.
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Stratum |
Dollar Range of Stratum |
Sample Size |
Number of MassHealth Members |
Population Dollar Value |
|
1 |
$1,000–$5,400 |
28 |
21,422 |
$ 56,105,828 |
|
2 |
$5,401–$14,991 |
30 |
7,989 |
68,145,683 |
|
3 |
$14,992–$114,847 |
27 |
2,142 |
53,024,450 |
|
4 |
$2,090–$162,154 |
15 |
167 |
2,002,643 |
|
Total |
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100 |
31,720 |
$ 179,278,604 |
For the 100 members in our sample, we contacted Medicaid officials in the nine states and Puerto Rico and sent them a questionnaire in a Microsoft Excel spreadsheet to complete. This questionnaire was designed to validate the accuracy of the T-MSIS information we used in our analysis and help OSA determine each member’s actual place of residency during our audit period. We used this questionnaire to collect information such as the date on which the member enrolled in the other state’s or territory’s Medicaid program, the length of time that the other Medicaid program made capitation payments for each member, the dollar amount of capitation payments made on behalf of each member by their Medicaid program, and whether the member received any healthcare services in the other state or territory during the time MassHealth made capitation payments on the member’s behalf.
Once we completed our analysis, we held follow-up meetings with Medicaid officials in each state or territory, as necessary, to discuss the results of our analysis and to ask follow-up questions about the data. We also reviewed capitation payments and healthcare service data in MassHealth’s data warehouse, called the Medicaid Management Information System (MMIS), to confirm the accuracy of the MassHealth data for the 100 members in our sample.
We then requested and analyzed the following information from MassHealth:
- documentation supporting whether a member was referred to MassHealth by another public assistance agency, such as the Social Security Administration or Department of Transitional Assistance;
- copies of any request for information letters that MassHealth sent to the members in our sample regarding their residency status and the members’ responses to the requests;
- results from National Change of Address (NCOA) database and Public Assistance Reporting Information System (PARIS) data matches that were performed during our audit period; and
- a list of any members in our sample who were removed from their managed care programs and were either moved to the fee-for-service model or had their MassHealth coverage terminated during the audit period.
Using information from MMIS, we generated a report containing all medical services for each of the 100 members in our sample who were covered by MassHealth during the audit period.
Once we received this information, we assessed MassHealth’s residency eligibility verification process as follows:
- We reviewed and analyzed the annual eligibility renewals for each member in the sample.
- We determined whether any members in the sample appeared in MassHealth’s NCOA database or PARIS data matches.
- We determined whether MassHealth removed members from the Managed Care Program if the members did not complete annual eligibility renewals, did not respond to request for information letters, or appeared in either NCOA database or PARIS data matches by either moving each ineligible member to the fee-for-service model or terminating their MassHealth coverage.
- We determined whether members received any healthcare services in Massachusetts during the period of time they were concurrently enrolled in MassHealth and the Medicaid program of another state or territory.
Data Reliability
For the T-MSIS data file provided to us by HHS OIG, we performed validity and integrity tests on the data, including (1) testing for blank fields, (2) testing for duplicates, (3) looking for dates outside the audit period, and (4) checking data fields for validity errors. Based on these procedures, we determined that the data obtained were sufficiently reliable for the purpose of this audit.
To determine the reliability of the data from MMIS, we relied on the work performed by OSA in a separate project, completed in 2020, that tested certain information system controls in MMIS. As part of that work, OSA reviewed existing information, tested selected system controls, and interviewed knowledgeable MassHealth officials about the data. As part of our current audit, we selected a random sample of 25 capitation payments obtained by HHS OIG from T-MSIS and traced the payment amounts, payment dates, and member names to MMIS. Based on these procedures, we determined that the data obtained were sufficiently reliable for the purpose of this audit.
| Date published: | June 28, 2023 |
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