MassHealth paid for $2,294,369 in unallowable, unbundled drug screens and tests performed on the same day.

Audit calls on MassHealth to recover improperly paid funds and improve its claims processing to prevent future improper payments.

Overview

During our audit period, 260 providers (laboratories) improperly billed MassHealth a total of $2,294,369 for qualitative drug screens and quantitative drug tests provided to the same member on the same day. MassHealth has not allowed this type of billing since 2013 because, in its opinion, it represents a form of unbundling. For example, a provider of treatment for substance use disorders (SUDs) typically orders a less expensive, qualitative drug screen to detect the presence or absence of illicit drugs in the member’s sample. A positive or negative result would suffice in this case. Providers who routinely require members to receive multiple, more expensive quantitative drug tests, or combinations of qualitative drug screens and quantitative drug tests, may be ordering testing that is not needed for a member’s treatment and represents an excessive, unallowable cost to the Commonwealth.

Of these improper payments, 67% involved situations where multiple providers submitted claims for drug screens and drug tests for the same member on the same day. For example, we found many instances in which a laboratory provider submitted a bill to MassHealth for a qualitative drug screen using one billing provider identification number, and then submitted a second bill, for the same date of service and the same member, for multiple quantitative drug tests using a second billing provider identification number. Likewise, on many occasions, referring⁵ laboratory providers submitted bills to MassHealth for qualitative drug screens, and second laboratories (referred to as testing laboratories) submitted bills for multiple quantitative drug tests for the same members and the same dates of service.

Authoritative Guidance

Unbundling is prohibited by Section 450.307 of Title 130 of the Code of Massachusetts Regulations (CMR):

1. No provider may claim payment in a way that may result in payment that exceeds the maximum allowable amount payable for such service under the applicable payment method.
2. Without limiting the generality of 130 CMR 450.307(A), the following billing practices are forbidden. . . .

(2)  Overstating or misrepresenting services, including submitting separate claims for services [in this case, quantitative drug test procedure codes] or procedures provided as components of a more-comprehensive service [in this case, a qualitative drug screen procedure code] for which a single rate of payment is established.

Further, MassHealth has issued Independent Clinical Laboratory Bulletin 9, dated February 2013, to inform providers that billing for both qualitative drug screens and quantitative drug tests on the same day is not allowed and will be denied by newly modified claim payment system edits:

MassHealth has established new claim edits for quantitative drug tests billed on the same date of service (DOS) as a drug screen service effective for dates of service on or after January 1, 2013.

Quantitative drug tests billed on the same DOS as a drug screen service will be denied.

In Transmittal Letters LAB-44, LAB-45, and LAB-46, MassHealth notified laboratory providers that it had updated the original Medicaid Management Information System (MMIS) system edit for unbundled drug tests in response to an official Centers for Medicare and Medicaid Services (CMS) update to the Healthcare Common Procedure Coding System⁶ for drug test procedure codes during the audit period. The MMIS system edit updates were intended to ensure that MMIS would continue to deny payments for quantitative drug test procedure codes billed in combination with qualitative drug screen procedure codes after the CMS code changes.

Reasons for Overpayments

The MMIS system edit established by MassHealth to detect improper, unbundled drug tests is a “report and pay” edit. This type of edit flags each instance of noncompliance, but still pays the unbundled claims. The system edit then generates a report, which requires staff members to research and determine whether recoupment is necessary. MassHealth officials stated that they did not have enough resources to effectively research each reported instance of noncompliance.

Further, the MMIS system edit cannot identify instances of unbundling in which one laboratory bills for a qualitative drug screen and a separate laboratory bills for a quantitative drug test. For this reason, in May 2016, MassHealth created a second system edit—a prepayment system edit—in its predictive modeling software, NetReveal, to detect and deny payment for quantitative drug tests billed on the same day as qualitative drug screens. However, in our additional analysis of the NetReveal prepayment system edit, we found 2,460 instances, totaling, $56,884, in which it appeared to have been switched off, which allowed the payment of unbundled drug tests.

Finally, these overpayments also occurred because MassHealth did not update its MMIS and/or NetReveal system edits for revised CMS procedure codes in a timely manner so that billing irregularities could be detected even when they involved providers using the most recent codes. MassHealth told us that CMS notifications of procedure code changes were not always promptly made available to them and that they were working on ensuring that these changes were implemented in a timelier manner.

Recommendations

1. MassHealth should seek to recover as much of the $2,294,369 in unbundled drug test payments improperly paid to laboratories as it deems appropriate.
2. MassHealth should modify the system edits in MMIS and NetReveal to ensure that they properly identify and deny payment for quantitative drug tests when a member also receives a qualitative drug screen on the same day. Once modifications have been made, MassHealth should test new edits completely to make sure they are functioning correctly.
3. MassHealth should update its MMIS and NetReveal system edits as soon as possible when CMS revises procedure codes or implements new ones.
4. MassHealth should not turn off the NetReveal prepayment system edit that is designed to prevent the payment of unallowable unbundled claims.

Auditee’s Response

MassHealth has been focused on program integrity in this area while ensuring continued access to medically necessary services for MassHealth members.

MassHealth’s response also states that since 2009, it has taken a number of steps to significantly curb overuse and reduce unnecessary expenditures for drug screening and drug testing. Some of these steps included the following:

• Dec 2011: Changed drug screen rate methodology from a per unit (or per drug class tested) payment structure to a service code that paid a single daily fee
• Jan 2013: Established MMIS edits preventing drug screens and quantitative tests being paid [for] the same provider on the same date of service
• Aug 2015: Enhanced MMIS drug screen and quantitative test edits to deny claims submitted by separate providers on the same date of service

MassHealth’s response further noted that the agency agreed with the finding of the Office of the State Auditor (OSA) and would recover any improper payments as applicable.

MassHealth responded specifically to the finding and our recommendations as follows:

After initial review of the claims OSA has characterized as unallowable, MassHealth generally agrees with OSA’s finding and will recover any improper payments once it is appropriate to do so. MassHealth has determined that the improper payments reflected in OSA’s finding occurred during time periods in which system edits were not yet in place, had not been updated to implement coding changes, or were not operating due to system maintenance. . . . MassHealth will continue to individually review and validate the claims comprising this finding and recoup improper payments once it is appropriate to do so. . . .

MassHealth has already implemented MMIS and NetReveal edits to identify and deny payment for quantitative drug tests when a member also receives a qualitative drug screen on the same day.

MassHealth implemented MMIS edits in February 2013, effective for dates of service on or after January 1, 2013, to identify situations in which both a drug screen and a quantitative test were performed on the same date of service by the same provider. Payments to providers in this situation account for $561,171 of OSA’s finding, and likely occurred prior to implementation of code changes or during downtime for system maintenance.

Starting in August of 2015, MassHealth implemented certain drug screen detection edits in NetReveal. MassHealth implemented additional NetReveal edits in May 2016 to specifically identify and deny claims for drug screen and quantitative drug test claims billed by separate providers on the same date of service. Payments to providers in this situation account for $1,733,198 of OSA’s finding. Approximately $904,000 of that total was paid prior to implementation of the NetReveal edits. The remaining payments likely occurred prior to implementation of code changes or during downtime for system maintenance.

The table below identifies the dollar amount of claims NetReveal has denied for different categories of same day testing since 8/1/15.

	08/1/2015-6/30/2017	7/1/2017-1/29/2018
Drug Test Secondary/Primary	$357,704.09	$233,737.31
Same Day Primary and Primary Drug Test	$108,146.89	$81,560.09
Same Day Primary and Secondary Drug Test	$1,545,082.58	$999,236.57
Total	$2,010,933.56	$1,314,533.97*

*   Primary Codes: (G0431, G0434, G0477, G0478, G0479, 80305, 80306, 80307); Secondary Codes: (80154, 80299, 82055, 82145, 82205, 82520, 82570, 82575, 83840, 83925, 83986, 83992, G6030, G6031, G6032, G6034–G6057, G0480–G0483)

Any changes to MassHealth’s claim edits are, and will continue to be, thoroughly tested prior to implementation. . . .

MassHealth will identify claims for code changes that processed without being subject to the MMIS and NetReveal edits and will recover payment as it determines is appropriate. In addition, MassHealth has been reviewing the process used to adopt code changes and will make any changes as needed.

There were three code set changes impacting these drug screen services during the audit period. In order to incorporate code changes, MassHealth has established formal subregulatory processes to ensure that providers have adequate notice of any changes to covered codes, limits and billing rules impacting those codes. These processes include formally adopting the new codes through an administrative bulletin, making changes to the MassHealth coverage list through a transmittal letter, and updating the MMIS and NetReveal systems. MassHealth strives to implement these changes as quickly as possible, but there is an inevitable and unavoidable delay between the date of a code change and the MMIS and NetReveal update that implements the change. The finding identifies claims that would have been subject to certain MMIS and NetReveal edits if not for that delay. MassHealth is exploring how best to address claims paid during a delay. . . .

The NetReveal system is occasionally shut down for system maintenance or upgrades that are necessary for enhancement and development. MassHealth has taken steps to minimize the number of missed claims, by having downtime scheduled later in the day and working with its vendor to minimize downtime.

Auditor's Reply

We acknowledge that over the past several years, MassHealth has taken measures to reduce the overall costs associated with drug screens and tests; however, our audit focused on determining whether MassHealth properly identified and denied payment of unbundled billings for these services. As noted above, during our audit period, problems still existed in this area, resulting in millions of dollars in improper payments. Based on its response, MassHealth is taking measures to address many of our concerns in this area.

MassHealth states in its response that $561,171 of improper payments cited in our report occurred before it implemented system edits in February 2013. However, this is not the case. Our audit period begins on March 1, 2013 and did not include any payments made before that date. The entire $2,294,369 represents improper drug testing payments made by MassHealth after March 1, 2013, as illustrated below.

Period	Amount Improperly Paid	Number of Claims
March 1, 2013–December 31, 2013*	$417,036	17,167
2014	$440,806	17,113
2015	$327,032	22,594
2016	$621,632	11,311
January 1, 2017–June 30,2017	$487,863	8,542

*     Edits were first implemented on February 1, 2013.

 

We found that one of the main reasons these improper payments occurred was that until May 2016, MassHealth used “report and pay” edits rather than edits that would simply deny improper payments. “Report and pay” edits would detect potential improper billings and flag them for review. However, according to MassHealth officials, resources were not available to research all the questionable claims identified by the system edits to determine whether they were appropriate, and therefore they were eventually paid. 

Also, in its response, MassHealth states that it was necessary to shut down NetReveal occasionally for system maintenance, enhancement, and development. Although this may be true, OSA believes that in order to avoid improper payments, MassHealth either should not process any claims that are subject to the NetReveal or MMIS edits during this shutdown or should reprocess all claims that were processed during the shutdown once all the edits are back online.

MassHealth states that it sometimes experiences unavoidable delays when adopting new coding changes from CMS. We do not dispute that there may sometimes be reasons for delaying the implementation of new procedure codes, but during our audit, we found that some of these delays appeared to be excessive, as illustrated below.

Effective Date of New Codes per CMS	Date of MassHealth Transmittal Letter / System Edit Implementation	Number of Days Delayed
January 1, 2015	July 2015	181
January 1, 2016	April 2017	456
January 1, 2017	April 2017	90

 

In some cases, when MassHealth does not implement new CMS codes promptly, it appears to allow providers to bill using codes that are no longer valid well after the codes’ expiration dates. For example, according to data in MMIS, MassHealth processed and paid 3,680 claims submitted by laboratories using codes 80100 and 80101 for five years after CMS discontinued these codes on January 1, 2010. Therefore, we again recommend that MassHealth update its MMIS and NetReveal system edits as soon as possible when CMS revises procedure codes or implements new ones. This will not only facilitate the timely processing of bills submitted by MassHealth providers but also ensure that any system edits that MassHealth has established to detect improper billings will function properly, because they will be based on the procedure codes that are currently used by its providers.  

In its response, MassHealth also provided a table illustrating improper claim submissions for which NetReveal denied payment, totaling $2,010,934 since August 1, 2015. However, it should be noted that OSA identified an additional $1,124,374 in improperly paid claims for drug testing from this period, which indicates that there are still deficiencies in MassHealth’s claim-processing system that need to be addressed.  

Finally, MassHealth states that in May 2016, it implemented new NetReveal system edits to identify and deny drug screen claims and quantitative drug test claims billed for the same date of service by the same provider or different providers. However, these system edits do not appear to be fully effective in addressing this problem: in the first half of calendar year 2017, they did not detect and deny the 8,542 drug tests, totaling $487,863, shown in the table above.

5. A referring laboratory is a laboratory that cannot perform all necessary laboratory services and refers some of the testing to a testing laboratory.

6. The Healthcare Common Procedure Coding System, which contains procedure codes, can be revised by CMS to tell providers which procedure codes are currently covered by Medicare or Medicaid.

Date published:	April 19, 2018