Audit of the Office of Medicaid (MassHealth) - Review of Capitation Payments with Multiple Identification Numbers Objectives, Scope, and Methodology

An overview of the purpose and process of auditing the Office of Medicaid (MassHealth) - Review of Capitation Payments with Multiple Identification Numbers.

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, 2019 through December 31, 2022.

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 further in the audit report.

Objective	Conclusion
Did MassHealth ensure that capitation payments were not made on behalf of Medicaid beneficiaries who were assigned multiple identification numbers (IDs) in accordance with Sections 450.235(A), 450.237, 450.259(A), and 450.307(B) of Title 130 of the Code of Massachusetts Regulations, and Sections 433.312 and 438.2 of Title 42 of the Code of Federal Regulations?	No; see Finding 1

To accomplish our audit objective, we gained an understanding of the internal control environment relevant to the objective by reviewing applicable policies and procedures and MassHealth’s internal control plan, and by conducting inquiries with MassHealth officials. In addition, we performed the procedures described below to obtain sufficient, appropriate evidence to address the audit objective.

Sample Strategy

To determine whether MassHealth ensured that it did not make capitation payments to managed care organizations (MCOs) on behalf of enrollees assigned more than one member ID, we obtained the capitation payment data file from the Transformed Medicaid Statistical Information System (T-MSIS) provided by the US Department of Health and Human Services Office of Inspector General (HHS OIG). The T-MSIS data file included capitation payments made during the audit period, January 1, 2019 through December 31, 2022.

OSA collaborated with HHS OIG to design a statistically² valid sampling methodology. HHS OIG and OSA chose a sample with a 90% confidence level³ and a 50% expected error rate.⁴ The data was then separated to show instances where MassHealth made at least $100 in MCO capitation payments for 3,678 enrollee matches for the same service month,⁵ totaling $20,474,899, during the audit period. An enrollee match consisted of when more than one member ID was associated with (1) the same Social Security Number (SSN) or (2) the same first four characters of the first name, first five characters of the last name, date of birth, and gender. The data below details the five strata to which each member was assigned for our data analysis purposes. HHS OIG and OSA then selected a random, statistical sample of 115 members out of the total 3,678 enrollee matches in the audit population.

Stratum	Description	Dollar Range per Person in Stratum	Number of MassHealth Members	Population Dollar Value	Sample Size
1	Match by SSN	$100–$5,199	2,221	$   3,500,857	21
2	Match by SSN	$5,200–$18,699	577	5,724,792	25
3	Match by SSN	$18,700–$80,000	156	5,115,932	23
4	Match by select information	$100–$80,000	709	4,241,073	31
5	Any match	Greater than $80,000	15	1,892,245	15
Totals			3,678	$ 20,474,899	115

Multiple IDs

For each of the 115 members with multiple IDs in our sample, we entered each unique member ID in the Medicaid Management Information System (MMIS) to determine whether each unique ID belonged to the same person. We then investigated further as to whether the IDs were linked in MMIS, indicating that the IDs were for the same person. If linkage had occurred, the link history would display the member’s current member ID, whether the ID was active or inactive, and the date processed for the linked IDs. In instances where multiple IDs for the same member had not been linked, we searched MyWorkspace, a web-based system that archives documents used to apply for MassHealth coverage through eligibility systems, such as the Health Insurance Exchange or MA-21. We did this to determine whether the documents retained in the system contained any personally identifiable information that would provide evidence that a person had multiple IDs. Lastly, for members with multiple IDs confirmed and determined to be linked, we requested evidence of any duplicate payments being recouped. 

Data Reliability Assessment

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 was sufficiently reliable for the purposes of this audit.

To determine the reliability of the data pulled from MMIS, we relied on the work performed by OSA in a separate project, completed in 2022, 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 30 capitation payments in MMIS and traced the payment amounts, payment dates, and beneficiary names to data obtained by HHS OIG from T-MSIS. Based on these procedures, we determined that the data obtained was sufficiently reliable for the purposes of this audit.

2.    Auditors use statistical sampling to select items for audit testing when a population is large and contains similar items. Auditors generally use a statistical software program to choose a random sample when sampling is used. The results of testing using statistical sampling, unlike those from judgmental sampling, can usually be used to make conclusions or projections about entire populations.

3.    Confidence level is a mathematically based measure of the auditor’s assurance that the sample results (statistic) are representative of the population (parameter), expressed as a percentage.

4.    Expected error rate is the number of errors that are expected in the population, expressed as a percentage. It is based on the auditor’s knowledge of factors such as prior year results, the understanding of controls gained in planning, or a probe sample.

5.    These matches fall into the eight categories of matches described in the "Medicaid Management Information System and Identity Matches" section of this report.

Date published:	December 31, 2024