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Audit of the Office of Medicaid (MassHealth)—Review of Claims Submitted by Dr. Joseph O’Connor Objectives, Scope, and Methodology

An overview of the purpose and process of auditing the Office of Medicaid (MassHealth)—Review of Claims Submitted by Dr. Joseph O’Connor

Table of Contents


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 claims by Dr. Joseph O’Connor for the period January 1, 2015 through December 31, 2018.

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 our objective, and where the objective is discussed in the audit findings.



  1. Did Dr. O’Connor correctly bill for services provided to MassHealth members?

No; see Finding 1


We gained an understanding of the internal controls we deemed significant to our audit objective through inquiries. We also collaborated with our office’s Bureau of Special Investigations, which initially identified potential billing irregularities regarding Dr. O’Connor. In addition, we performed the following procedures to obtain sufficient, appropriate audit evidence to address our audit objective.

  • We obtained data from MassHealth’s Medicaid Management Information System (MMIS) for testing purposes. To test the reliability of the data, we relied on the work performed by OSA in a separate project 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, (3) testing for values outside a designated range, (4) looking for dates outside specific periods, and (5) tracing a sample of claims queried to source documents. Based on these procedures, we determined that the data obtained were sufficiently reliable for the purposes of this report.
  • We selected a statistical, random sample of 180 out of 33,383 paid physical therapy claims from the audit period, using an expected error rate of 50%, a desired precision of 15%, and a confidence level of 95%, to determine whether Dr. O’Connor properly billed MassHealth for these claims. The expected error rate is the anticipated rate of occurrence of the error of improper billing for services; 50% is the most conservative. Desired precision is a measure of how precise the actual error rate is. Confidence level is the numerical measure of how confident one can be that the sample results reflect the results that would have been obtained if the entire population had been tested. For this audit, we designed our sample so that we would be 95% confident that the actual error rate in the sample of 180 claims would be within a range of +/- 7.5%, or 15%, of the error in the population of 33,383 claims.
  • To determine whether Dr. O’Connor properly billed MassHealth for physical therapy, we reviewed information in members’ medical records for the sampled claims to determine who provided the services to the members. We accomplished this by reviewing a Daily Note/Billing Sheet, which details a member’s personal information, diagnosis, referring physician, procedure codes to be billed, and assessment of short- and long-term goals to recover from injury. It is signed by the provider/s who treated the patient on that particular visit. We compared the servicing provider name in our data from MMIS to that of the provider who physically signed each Daily Note/Billing Sheet to determine whether the name in our data matched that of the provider who provided the service.
  • In addition, after this initial review, for all providers who signed the Daily Note/Billing Sheet, we researched MMIS and the records of the Division of Professional Licensure to determine the time period when each provider was licensed and eligible to treat MassHealth members and bill MassHealth for services. We then compared these time periods with the date of service for each claim in our sample to determine whether each provider was eligible to treat MassHealth patients and bill MassHealth for services when s/he treated each patient. Providers are not allowed to treat MassHealth patients if they are not licensed and eligible to participate in MassHealth, so through this research we determined whether the providers treated the patients without a license and without eligibility.
Date published: January 13, 2020