Medicaid Audit Unit Completed Audits, March 15, 2018-March 15, 2019

An overview of the audits conducted by the Medicaid Audit Unit over the past year, and their findings.

Overview

During this reporting period, the Office of the State Auditor (OSA) released seven audit reports on MassHealth’s administration of the Medicaid program and on Medicaid service providers’ compliance with state and federal laws, regulations, and other authoritative guidance. These reports identified millions of dollars in questionable, unallowable, unauthorized, and potentially fraudulent payments and made a number of recommendations to strengthen internal controls and oversight in MassHealth’s program administration. The following is a summary of our Medicaid audit work.

1. Office of Medicaid (MassHealth)—Review of Claims for Drug Test and Drug Screen Services

Audit Number	2017-1374-3M2A
Audit Period	March 1, 2013 through December 31, 2016
Issue Date	April 19, 2018
Number of Findings	3
Number of Recommendations	9
Total Questioned Costs	$4,381,089
MassHealth Recouping Payments	Partially
Potential Fraud Identified	Yes*

*    Given the potential fraud associated with laboratories’ bills for unbundled drug tests, OSA brought this to the attention of officials at MassHealth and the Office of Attorney General’s Medicaid Fraud Division.

Reason for Audit

Using data analytics, OSA found that the claims MassHealth was paying for drug testing, which significantly decreased after OSA issued a critical audit report on this subject on April 17, 2013, began to increase steadily in 2015. OSA decided to perform a follow-up audit in this area to determine whether the system edits that MassHealth stated it had implemented in its claim-processing system to address the issues we identified in our 2013 audit were effectively preventing and denying improper claims (e.g., duplicate and unbundled² drug tests).

Summary of Findings and Recommendations

OSA reported on three findings in this audit. First, OSA found that MassHealth’s system edits did not detect and deny unbundled drug tests that resulted in $2,294,369 in overpayments during the audit period. Second, OSA identified new potential drug test unbundling scenarios totaling $1,888,620. Third, OSA found that MassHealth paid for duplicate drug tests totaling $198,100 during the audit period.

OSA’s primary recommendations called for MassHealth to fix system edits for both duplicate and unbundled drug screening and drug testing and continually monitor drug test claim submissions for new unbundled drug test billing scenarios.

MassHealth Implementation of Recommendations and Recoupment Efforts

OSA provided MassHealth with all the questioned drug test claims that we identified so that MassHealth could process recoupments. MassHealth is fixing its system edits to prevent further improper payments.

2. Office of Medicaid (MassHealth)—Review of Claims by Reen & Reen, DMD, P.C.

Audit Number	2018-1374-3M2
Audit Period	July 1, 2012 through June 30, 2017
Issue Date	June 8, 2018
Number of Findings	2
Number of Recommendations	4
Total Questioned Costs	$0
MassHealth Recouping Payments	No
Potential Fraud Identified	No

Reason for Audit

OSA performed data analytics on approximately $174 million in claims for orthodontic services to identify providers with the highest risk of improper payment compared to their peer orthodontists. Our data analysis showed that claims submitted by Reen & Reen (R&R) were among the highest in frequency and cost compared to other orthodontists, indicating that R&R was a high-risk provider.

Summary of Findings and Recommendations

OSA reported on two findings in this audit. First, OSA found that R&R submitted claims to MassHealth for orthodontic services using the wrong servicing provider identification number, contrary to MassHealth regulations. Specifically, after testing a statistical sample of 180 claims, we found that 82 (46%) were performed by an orthodontist in the group other than the one R&R billed for. Second, OSA determined that 13 (7.2%) of the 180 sampled claims were billed to MassHealth first, before the members’ private insurance, which MassHealth does not allow.

OSA’s primary recommendations called for R&R to bill using the actual servicing provider identification number, indicating the specific orthodontist who provided the services, and to work with MassHealth on proper billing for periodic orthodontic services. Additionally, OSA recommended that R&R only bill MassHealth after it receives explanations of benefits from members’ private insurance.

MassHealth Implementation of Recommendations and Recoupment Efforts

MassHealth is requiring R&R to complete mandatory training on MassHealth billing rules and is coordinating this training with its dental servicing contractor, DentaQuest, to ensure that all parties understand its policies and procedures for submitting claims to MassHealth for periodic orthodontic services and for services when a member has private insurance.

3. Office of Medicaid (MassHealth)—Review of Vision Care Claims Submitted by Dr. Khuong Nguyen

Audit Number	2017-1374-3M3
Audit Period	July 1, 2011 through December 31, 2016
Issue Date	July 16, 2018
Number of Findings	3
Number of Recommendations	6
Total Questioned Costs	$135,421
MassHealth Recouping Payments	Yes
Potential Fraud Identified	No

Reason for Audit

Using data analytics, OSA identified Dr. Khuong Nguyen as an outlier in terms of the amount he billed to MassHealth during the analyzed period for members residing in Department of Youth Services facilities and members in Department of Children and Families programs.

Summary of Findings and Recommendations

OSA reported on three findings in this audit. First, OSA found that Dr. Nguyen did not keep adequate medical records at his office that MassHealth requires to support services he provided to youths residing in state-run facilities and programs. Second, Dr. Nguyen submitted $108,166 in questionable claims for dispensing services in that he primarily mailed eyeglasses to the members rather than dispensing them in person. Finally, Dr. Nguyen did not keep adequate medical documentation as required by MassHealth, including documentation of comprehensive medical exams or comprehensive medical histories related to $27,255 in claims that he billed using certain procedure codes.

OSA’s primary recommendations called for Dr. Nguyen to maintain at his office all documentation for services he provided to members in state-run facilities and programs and to bill MassHealth for dispensing services only after he fits eyeglasses to a member’s face. In addition, OSA recommended that Dr. Nguyen keep adequate medical records when billing higher-complexity codes.

MassHealth Implementation of Recommendations and Recoupment Efforts

MassHealth agreed with OSA’s findings and is working with OSA to determine the appropriate amount it will recoup for each of the three findings.

4. Office of Medicaid (MassHealth)—Review of Drug Testing Frequency

Audit Number	2017-1374-3M2
Audit Period	July 1, 2012 through June 30, 2016
Issue Date	July 27, 2018
Number of Findings	3
Number of Recommendations	7
Total Questioned Costs	$6,962,694
MassHealth Recouping Payments	Yes
Potential Fraud Identified	Yes*

*    Given the potential fraud associated with sober homes billing for drug tests for residential monitoring purposes, OSA brought this to the attention of officials at MassHealth and the Office of Attorney General’s Medicaid Fraud Division.

Reason for Audit

After completing a 2013 audit on drug testing, OSA determined that another review of MassHealth payments for drug tests that may not have been ordered and used by the member’s physician could allow MassHealth to reduce wasteful spending on unnecessary member drug testing.

Summary of Findings and Recommendations

OSA reported on three findings in this audit. First, OSA found that MassHealth might have paid more than $6.2 million for drug testing for members who were not receiving or had not received any other medical services to warrant the testing. According to its regulations, MassHealth only pays for drug testing when ordered by a physician who will use the testing to diagnose or treat the member. Second, OSA found that MassHealth improperly paid at least $741,621 for drug tests for 1,753 members for residential monitoring purposes, which MassHealth does not allow. Finally, MassHealth paid laboratories for $21,073 in drug testing that did not have accompanying physician orders.

OSA’s primary recommendations called for MassHealth to establish controls to ensure that it only paid for medically necessary drug testing used by an ordering physician actively treating members, as well as to work to enforce its current regulation of not allowing laboratories to bill for drug testing for residential monitoring purposes. OSA also recommended that MassHealth conduct periodic site audits of laboratories to ensure that it only pays for medically necessary drug tests.

MassHealth Implementation of Recommendations and Recoupment Efforts

MassHealth disagreed with OSA’s methodology for analyzing drug testing claims and identifying members living in sober homes who were only receiving drug testing and no other services. However, MassHealth is working with the Department of Public Health to ensure that it does not pay for drug testing ordered by sober homes for residential monitoring purposes.

5. Office of Medicaid (MassHealth)—Review of Claims Submitted by Dr. Ileana Berman

Audit Number	2017-1374-3M7
Audit Period	January 1, 2014 through December 31, 2016
Issue Date	November 14, 2018
Number of Findings	5
Number of Recommendations	10
Total Questioned Costs	$359,926
MassHealth Recouping Payments	Yes
Potential Fraud Identified	No

Reason for Audit

This audit was initiated based on the amount that Dr. Ileana Berman, a MassHealth certified psychiatrist, billed MassHealth during the period under review.   

Summary of Findings and Recommendations

OSA reported on five findings in this audit. First, OSA found that Dr. Berman made significant changes to her business operations and did not notify MassHealth as required. Second, Dr. Berman billed MassHealth $76,641 in drug tests whose results were improperly documented in member medical records, and as a result, her medical decision-making may have been based on inaccurate information when she was writing prescriptions for Suboxone. Third, Dr. Berman did not document detailed medical exams or members’ medical histories as required by MassHealth for any of the 129 sampled claims she billed using certain evaluation and management (E/M) service procedure codes. Fourth, Dr. Berman did not maintain any documentation supporting $31,287 in E/M services and drug tests billed. Finally, Dr. Berman improperly billed MassHealth $75,261 for unbundled drug tests, which MassHealth does not allow.

OSA’s primary recommendations called for Dr. Berman to maintain proper documentation in accordance with MassHealth regulations for all services, including drug testing, and to repay MassHealth for claims billed for services that either were unallowable, such as unbundled drug tests, or were not properly documented. OSA also recommended that Dr. Berman work with MassHealth regarding the changes she made to her organizational structure to determine whether the business was properly certified.

MassHealth Implementation of Recommendations and Recoupment Efforts

MassHealth agreed with OSA’s findings and is working with OSA to determine the appropriate amount it will recoup for each of the five findings.

6. Office of Medicaid —Review of Claims For Services Provided by Liberty Adult Day Health

Audit Number	2018-1374-3M10D
Audit Period	January 1, 2016 through December 31, 2017
Issue Date	March 2019
Number of Findings	2
Number of Recommendations	3
Total Questioned Costs	$412,664
MassHealth Recouping Payments	Yes
Potential Fraud Identified	No

Reason for Audit

Using data analytics, OSA’s Medicaid Audit Unit identified Liberty Adult Day Health Center (Liberty) to audit because it was as an outlier among adult day health (ADH) providers.

Summary of Findings and Recommendations

OSA reported on two findings in this audit. First, OSA found that Liberty did not properly obtain the required physician order for one member before providing services to that member during the audit period. Second, OSA found that some physician orders did not include the necessary details, such as activities of daily living (ADLs) and/or skilled nursing services, for Liberty to develop its care plans.

OSA’s primary recommendation called for Liberty to implement controls to ensure that it obtained detailed physician orders from members’ physicians before performing any services. In addition, OSA recommended that Liberty work with MassHealth to repay any amounts it determined should be repaid.

MassHealth Implementation of Recommendations and Recoupment Efforts

MassHealth agreed with OSA’s finding on the missing physician order and is planning to conduct its own audit of this provider. MassHealth did not agree with OSA that physician orders should include details on why a member needs to receive ADH services, such as ADLs and/or skilled nursing services. However, Liberty did agree with this finding and has already changed its physician order forms to ensure that it obtains this information so that its nursing staff members can develop care plans that coordinate with physician orders and provide members with the medical services they need.

7. Office of Medicaid (MassHealth)—Review of Claims Paid for Services Provided by Cozy Corner Adult

Audit Number	2018-1374-3M10B
Audit Period	January 1, 2016 through December 31, 2017
Issue Date	March 2019
Number of Findings	1
Number of Recommendations	3
Total Questioned Costs	$955,587
MassHealth Recouping Payments	Yes
Potential Fraud Identified	No

Reason for Audit

Using data analytics, OSA identified Cozy Corner Adult Day Health Center (Cozy Corner) to audit because it was an outlier among ADH providers.

Summary of Findings and Recommendations

OSA found that Cozy Corner did not properly obtain the required signed physician orders for 43 members, or the required clinical authorizations for 4 members, before providing services to them during the audit period.

OSA’s primary recommendations called for Cozy Corner to implement controls to ensure that it obtained physician orders and clinical authorizations before providing ADH services to MassHealth and to contact MassHealth for guidance and clarification regarding any unclear requirement of MassHealth regulations. OSA also recommended that MassHealth determine how much of the $955,587 discussed in this finding should be repaid and seek reimbursement.

2. Unbundling is billing for medical services using multiple procedure codes rather than one comprehensive code designed for them. MassHealth does not pay unbundled claims.

Date published:	March 15, 2019