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Audit of the Office of Medicaid (MassHealth)—Review of Estate Recovery Objectives, Scope, and Methodology

An overview of the purpose and process of auditing the Office of Medicaid (MassHealth)—Review of Estate Recovery.

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 claims for estate recovery for the period July 1, 2016 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 the objective, and where the objective is discussed in this report.

Objective

Conclusion

  1. Does MassHealth ensure that estate recovery activities do not create financial hardships for low- and middle-income families?

see Finding 1

Methodology

We gained an understanding of the internal controls we deemed significant to our audit objective through inquiries. In addition, we performed the following procedures to obtain sufficient, appropriate audit evidence to address the objective.

  • We obtained data from MassHealth, which gave us a list of estate recovery receipts from July 1, 2016 through December 31, 2018, obtained from Sohema. As part of obtaining the data, OSA interviewed knowledgeable agency officials about the data. We performed validity and integrity tests on the data provided, which included testing for blank fields, scanning for duplicate records, and looking for dates outside the audit period. We tested a sample of the estate recovery receipts to verify that the receipt totals agreed with members’ Medicaid Management Information System (MMIS) All Services Reports, which track and total all Medicaid expenses paid for members for which MassHealth seeks reimbursement. Based on these procedures, we determined that the data obtained were sufficiently reliable for the purposes of this report.
  • We obtained data from MMIS for testing purposes. To test the reliability of the data, we relied on 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. As part of our current audit, we performed validity and integrity tests on all claim data, which included testing for blank fields, scanning for duplicate records, and testing for dates outside the audit period. Based on these procedures, we determined that the data obtained were sufficiently reliable for the purposes of this report.
  • We determined the number of estate recovery cases and the total cash receipts collected from the information provided. During the audit period, there were a total of 16,474 cases (14,338 closed and 2,136 active), for which the cash receipts totaled $82,737,594. Individual receipts ranged from $19 to $719,866. Of these cases, 7,650 were for nominal cash receipts (amounts of $25,000 or less), which totaled $3,430,026. Cash receipts for the remaining 8,824 cases totaled $79,307,568. 
  • We calculated the number of undue-hardship waiver cases from the information provided. We determined that there were a total of 152 undue-hardship waiver cases, with a total reported claim amount of $19,804,056. Of these waivers, 30 were pending decision, 31 were granted, 38 were rejected, and 53 were withdrawn by the estates.
  • We analyzed data from members’ MMIS All Services Reports to determine whether they agreed with the MassHealth claim amounts. From our calculation, we determined that in 6 (14%) of the instances we reviewed, the two amounts agreed without exception. In 21 (49%) of the instances, the MMIS All Services Report amount was greater than the MassHealth claim amount, and in 16 (37%), the MMIS All Services Report amount was less than the MassHealth claim amount.
Date published: June 28, 2021
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