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Medicaid Audit Unit Completed Audits, March 15, 2019 - March 14, 2020

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

Table of Contents

Overview

During this reporting period, the Office of the State Auditor (OSA) released eight audit reports on MassHealth’s administration of certain aspects of the state’s Medicaid program and on selected Medicaid service providers’ compliance with state and federal laws, regulations, and other applicable authoritative guidance. These reports identified $1,901,051 in improper payments, as well as deficiencies in MassHealth’s administration of certain program services and other operational activities, 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. Review of Counseling Provided to MassHealth Members Receiving Receiving Treatment for Opioid Use

Audit Number

2016-1374-3M13

Audit Period

January 1, 2011 through December 31, 2015

Issue Date

March 21, 2019

Number of Findings

3

Number of Recommendations

4

Total Improper Payments

N/A—operational issues identified

MassHealth Recouping Payments

N/A

 

Background/Reason for Audit

Given the significant increase in reported incidents of opioid misuse both nationally and within the Commonwealth, OSA had concerns as to whether individuals who were receiving treatment for opioid use disorders (OUDs) had access to, and were receiving, counseling as part of their treatment programs. Our audit focused on OUD counseling provided to MassHealth members who received buprenorphine under any brand or generic name as part of their medication-assisted treatment (MAT)2 for OUDs.

Summary of Findings and Recommendations

OSA reported three findings in this audit:

  1. Twenty-seven percent of MassHealth members who were treated for OUDs did not receive, and/or may not have had access to, recommended counseling.
  2. Some MassHealth members did not receive OUD counseling from healthcare professionals who either were certified or specialized in addiction treatment.
  3. Five prescribers wrote a total of 72 prescriptions for 6 members (for a total of $22,733 paid to pharmacies by MassHealth) for which they did not keep any kind of documentation, such as prescriptions issued or medical services provided.

Our recommendations to MassHealth to address these problems were as follows:

  1. MassHealth should take additional measures to better ensure that prescribers effectively facilitate member participation in OUD counseling.
  2. MassHealth should further investigate the reasons that were provided to OSA during this audit for members’ not having access to counseling and take whatever measures it can to minimize these barriers to access.
  3. MassHealth should collaborate with the Department of Public Health to ensure that OUD counselors have the proper training, skills, and knowledge to provide effective OUD counseling.
  4. MassHealth should conduct a review of the medical documentation of those who prescribe buprenorphine and recover any payments for services that were not properly documented.

MassHealth’s Comments: Implementation of Recommendations

MassHealth agreed with our first finding about the importance of best practices and the need to ensure that members with OUDs receive quality comprehensive care. MassHealth also stated,

MassHealth will continue to invest in behavioral health services, including support for best practices for individuals with OUD and efforts to ensure access to all medically necessary behavioral health services. Furthermore, MassHealth agrees prescribers should offer referrals and follow-up to appropriate behavioral health outpatient counseling services for members who receive MAT services.

However, MassHealth said it disagreed that members should be required to obtain counseling as a condition of obtaining MAT. It also disagreed that specific measures were necessary to address rates of engagement in counseling, as defined by OSA, for members with OUDs who were prescribed buprenorphine.

Regarding our second finding, MassHealth said it agreed that practitioners providing counseling and other services to members with OUDs should be qualified and well trained, but disagreed with our conclusion that some members were not receiving OUD counseling from healthcare professionals who specialized or were certified in addiction treatment. MassHealth did not indicate that it would take any measures to address this problem.

Regarding the third finding, MassHealth stated that it agreed with OSA’s recommendation that an additional review of these five prescribers was warranted based on the apparent lack of medical documentation.

2. Office of Medicaid (MassHealth)—Review of Claims Paid for Pharmacy Drugs

Audit Number

2018-1374-3M1

Audit Period

January 1, 2015 through June 30, 2017

Issue Date

August 29, 2019

Number of Findings

1

Number of Recommendations

1

Total Improper Payments

$982,535

MassHealth Recouping Payments             

N/A—significant operational issues identified

 

Background/Reason for Audit

The MassHealth Pharmacy Program is administered by Commonwealth Medicine, a division of the University of Massachusetts Medical School, pursuant to an Interdepartmental Service Agreement that the Executive Office of Health and Human Services entered into on behalf of MassHealth. Commonwealth Medicine also manages the Pharmacy Online Processing System (POPS), which, during our audit period, was provided under contract with Conduent State Healthcare LLC (formerly Xerox State Healthcare LLC) and was MassHealth’s system for processing pharmacy drug claim data. Drug prescriptions are orders written by state-licensed prescribers and filled by state-licensed pharmacies.

During the audit period, January 1, 2015 through June 30, 2017, MassHealth paid pharmacies approximately $1,716,217,958 for 43,579,259 claims for non-compounded drugs prescribed and provided to 1,015,227 MassHealth members. Given the amount of money involved and the decentralized way these prescriptions are prescribed and provided, OSA assessed this area at a high risk of improper payments.

Summary of Finding and Recommendation

OSA reported one three-part finding:

  1. MassHealth improperly paid 25,144 of pharmacy drug claims, totaling $982,535, as detailed below.

    a. MassHealth paid pharmacies a total of $300,863 for 4,332 prescription drug refills that exceeded the number of refills authorized by prescribers.

    b. MassHealth paid pharmacies $526,229 for 5,649 refills of emergency (i.e., non-refillable) prescriptions.

    c. MassHealth improperly paid pharmacies $155,443 for 15,163 over-the-counter (OTC) drug fills supplied to members living in institutional settings.

Our recommendation to MassHealth to address these problems was as follows:

  1. MassHealth should ensure that system controls are developed and implemented in POPS to prevent payments to pharmacies for unauthorized prescription drug refills, refills of emergency (non-refillable) drug fills, and OTC drugs supplied to members living in institutional settings.

MassHealth’s Comments: Implementation of Recommendation

MassHealth did not agree with this finding; it stated that it believed that many of the claims questioned in this finding were appropriately paid. However, it said that it implemented system changes to eliminate potential future concerns similar to those we raised.

3. Office of Medicaid (MassHealth)—Review of Accounts Receivable

Audit Number

2018-1374-3M3

Audit Period

January 1, 2015 through December 31, 2017

Issue Date

October 18, 2019

Number of Findings

1

Number of Recommendations

1

Total Questioned Costs

N/A—operational issues identified

MassHealth Recouping Payments

N/A

 

Background/Reason for Audit

We undertook an audit to determine whether MassHealth effectively managed its accounts receivable with regard to write-offs of uncollectible accounts. During our audit period, MassHealth’s new accounts receivable totaled approximately $625 million; it collected more than $616 million of this amount, but did not remove and write off accounts receivable as uncollectible. Using data analytics, we determined that as of December 31, 2017, MassHealth had 30,948 accounts receivable, totaling approximately $12.76 million, that were more than two years old. Based on this, we determined that there was a high risk that many of these accounts receivable might not be collectible and therefore should not be included in MassHealth’s accounts receivable balance.

Summary of Finding and Recommendation

OSA reported one finding in this audit:

  1. MassHealth does not effectively administer its uncollectible accounts receivable balances: it does not write off uncollectible amounts from its accounts receivable balances even though there are thousands of accounts receivable that are at least 2, and sometimes more than 10, years old and are therefore unlikely to be collected.

Our recommendation to MassHealth to address this problem was as follows:

  1. MassHealth should develop policies and procedures regarding how it will determine when to write off accounts receivable that it has deemed uncollectible, as well as monitoring controls to ensure that these policies and procedures are adhered to.

MassHealth’s Comments: Implementation of Recommendation

MassHealth disagreed that it had not ensured that its accounts receivable balances were accurate and asserted that the balances were accurate except for its uncollectible accounts. However, it agreed with our recommendation that it formalize its policies and procedures for determining when accounts receivable were to be deemed uncollectible and written off. It also said it would implement monitoring controls to ensure adherence to these policies.

4. Review of Claims Submitted by Dr. Frederick Wagner Jr.

Audit Number

2018-1374-3M11

Audit Period

January 1, 2014 through December 31, 2017

Issue Date

September 24, 2019

Number of Findings

2

Number of Recommendations

7

Total Improper Billings

$310,112

MassHealth Recouping Payments             

Yes

 

Reason for Audit

Dr. Wagner is an optometrist, sole business proprietor, and certified MassHealth provider who travels to nursing facilities across the state. Using data analytics, we determined that he was in the top tier of vision care providers in terms of the amount he received from MassHealth in reimbursements: he received a total of $1,045,556 for vision care provided to 3,741 MassHealth members during the audit period. Given the amount he received in reimbursements and his pattern of service delivery (a higher-than-normal frequency of billings and members seen), we determined that there was a high risk of improper billings.

Summary of Findings and Recommendations

OSA reported two findings in this audit:

  1. Dr. Wagner had inadequate documentation to support at least $301,936 in vision care claims.
  2. Dr. Wagner submitted improper claims for eyeglass dispensing and fitting services totaling $8,176.

Our recommendations to Dr. Wagner to address these problems were as follows:

  1. Dr. Wagner should collaborate with MassHealth to repay the $301,936 discussed in the first finding.
  2. Dr. Wagner should document the chief complaint or reasons for the services provided in members’ medical records.
  3. Dr. Wagner should properly document the required patient medical history, as well as details about the exam and medical decision-making, when billing for vision care using evaluation and management codes; otherwise, he should bill using eye exam codes.
  4. Dr. Wagner should submit claims to MassHealth using the actual dates on which vision care is provided to members.
  5. Dr. Wagner should collaborate with MassHealth to repay the $8,176 discussed in the second finding.
  6. Dr. Wagner should only submit claims for dispensing services after he fits new eyeglasses to a MassHealth member.
  7. Dr. Wagner should maintain proper documentation for dispensing services, including documenting a consultation with the nursing facility, measurements, and evidence that he fitted the eyeglasses to the individual.

MassHealth’s Comments: Implementation of Recommendations

MassHealth stated that it had previously identified a number of potential issues with this provider through its own audit and that it generally agreed with our findings and would recoup any overpayments.

5. Review of Claims Paid for Services Provided by Norwood Adult Day Health Center

Audit Number

2018-1374-3M10C

Audit Period

January 1, 2016 through December 31, 2017

Issue Date

June 6, 2019

Number of Findings

2

Number of Recommendations

3

Total Questioned Costs

$92,644

MassHealth Recouping Payments

Yes

 

Reason for Audit

MassHealth pays for adult day health (ADH) services provided to eligible MassHealth members who receive required authorizations. Using data analytics, we determined that during the audit period, MassHealth paid Norwood Adult Day Health Center (NADHC) approximately $1,854,494 to provide ADH services for 150 MassHealth members. This placed NADHC in the tier of ADH providers that received the highest amount in reimbursements during this period. We believed this was a high risk factor. The purpose of this audit was to determine whether NADHC obtained the required physician orders and clinical authorizations for ADH services for each MassHealth member.

OSA reported two findings in this audit:

  1. NADHC did not obtain physician orders to support as much as $92,644 of ADH services provided to three MassHealth members.
  2. NADHC did not always properly document claims submitted to MassHealth by its billing agents to ensure that the correct ADH location was indicated. During our audit period, NADHC’s billing agent HealthCare Options, Inc. used the wrong location for services provided for 53 out of 150 MassHealth members.

Our recommendations to NADHC to address these problems were as follows:

  1. NADHC should collaborate with MassHealth to determine how much of the $92,644 discussed in the first finding should be repaid.
  2. NADHC should develop policies and procedures to ensure that completed and authorized physician orders are in place before it provides ADH services to MassHealth members.
  3. NADHC should enhance its policies and procedures to make sure that it properly monitors claims submitted to MassHealth by its billing agents to ensure that all the claims they submit indicate the locations where services were provided.

MassHealth’s Comments: Implementation of Recommendations

MassHealth agreed with our findings and recommendations and said our audit identified the need for it to conduct its own audit of this provider.

6. Review of Claims Paid for Services by ActiveLife Adult Day Care, Inc.

Audit Number

2018-1374-3M10A

Audit Period

January 1, 2016 through December 31, 2017

Issue Date

November 14, 2019

Number of Findings

1

Number of Recommendations

2

Total Questioned Costs

$34,137

MassHealth Recouping Payments

Yes

 

Reason for Audit

MassHealth pays for ADH services provided to eligible MassHealth members who receive the required authorizations. During the audit period, MassHealth paid ActiveLife Adult Day Care, Inc. approximately $2,365,604 to provide ADH services for 108 MassHealth members. This placed ActiveLife in the tier of providers that received the highest amount in reimbursements during this period. We believed this was a high risk factor. The purpose of this audit was to determine whether ActiveLife properly billed for ADH services provided to MassHealth members (i.e., whether it billed for services that were properly authorized and documented).

Summary of Finding and Recommendations

OSA reported one finding in this audit:

  1. ActiveLife did not obtain a physician order for $34,137 of services for one MassHealth member.

Our recommendations to ActiveLife to address these problems were as follows:

  1. ActiveLife should collaborate with MassHealth to determine how much of the $34,137 discussed in this finding should be repaid.
  2. ActiveLife should develop policies and procedures to ensure that completed and authorized physician orders are in place before it provides ADH services to MassHealth members.

MassHealth’s Comments: Implementation of Recommendations

MassHealth agreed with our recommendations and stated that it would follow through with its own audit of ActiveLife.

7. Review of Claims Paid for Day Habilitation Services Provided by United Cerebral Palsy

Audit Number

2019-1374-3M1

Audit Period

April 1, 2015 through July 31, 2018

Issue Date

September 19, 2019

Number of Findings

1

Number of Recommendations

1

Total Questioned Costs

$122,357

MassHealth Recouping Payments

Yes

 

Reason for Audit

MassHealth covers day habilitation (DH) services for eligible MassHealth members based on properly authorized member service plans that set forth measurable goals and objectives and prescribe integrated programs of activities and therapies necessary to reach them. A service-needs assessment must be completed in order for a member to receive DH services. This is a compilation of evaluations by qualified professionals who determine the member’s functioning level, needs, and strengths and make specific recommendations for DH services to address identified needs. During the audit period, MassHealth paid United Cerebral Palsy (UCP) $4,505,326 to provide DH services for 111 MassHealth members. This placed UCP in the tier of providers that received the highest amount in reimbursements during this period. We believed this was a high risk factor. The purpose of this audit was to determine whether UCP obtained the required authorization from a physician or primary care clinician for DH services for each MassHealth member.

Summary of Finding and Recommendations

OSA reported one finding in this audit:

  1. UCP did not obtain physician or primary care clinician authorizations to support payment for DH services provided to six MassHealth members.

Our recommendations to UCP to address this problem were as follows:

  1. UCP should collaborate with MassHealth to determine how much of the $122,357 discussed in this finding should be repaid.
  2. UCP should update its policies and procedures to require its staff to ensure the completion of physician or primary care clinician authorizations before it provides DH services for MassHealth members.

MassHealth’s Comments: Implementation of Recommendations

MassHealth stated that it agreed with our recommendations and would conduct its own audit of UCP.

8. Review of Claims Submitted by Dr. Joseph O’Connor

Audit Number

2019-1374-3M3

Audit Period

January 1, 2015 through December 31, 2018

Issue Date

January 13, 2020

Number of Findings

1

Number of Recommendations

3

Total Improper Billings

$359,266

MassHealth Recouping Payments

Yes

 

 

Reason for Audit

MassHealth pays for physical therapy services provided to eligible MassHealth members. Dr. Joseph O’Connor is a therapist and the owner of Advance Physical Therapy & Sports Rehabilitation. During the audit period, Dr. O’Connor received a total of $568,988 for physical therapy provided to 1,129 MassHealth members. The audit was initiated as the result of a referral from OSA’s Bureau of Special Investigations (BSI). BSI is charged with investigating potential fraudulent claims or wrongful receipt of payment or services from public assistance programs. BSI conducted data analytics of Dr. O’Connor that identified potential improper payments. The purpose of this audit was to determine whether physical therapy provided to MassHealth members was properly supported by documentation and allowable in accordance with MassHealth regulations.

Summary of Finding and Recommendations

OSA reported one finding in this audit:

  1. Dr. O’Connor improperly billed MassHealth for $359,266 in physical therapy provided by physical therapy assistants. Specifically, in many instances he submitted claims to MassHealth using his own billing provider identification number for physical therapy that was provided by physical therapy assistants. This is not allowed by MassHealth regulations, even if the services are provided under the supervision of a licensed therapist.

Our recommendations to Dr. O’Connor to address this problem were as follows:

  1. Dr. O’Connor should collaborate with MassHealth to establish a plan to repay the $359,266 in overpayments he received from improper physical therapy billings.
  2. Dr. O’Connor should bill MassHealth using his billing provider identification number only for services he personally provides.
  3. Dr. O’Connor should periodically review all the billing requirements in MassHealth’s regulations, as well as updates to these regulations that are described in MassHealth’s transmittal letters and provider bulletins, and ensure that he knows and adheres to these requirements when he bills for services provided to MassHealth members.

MassHealth’s Comments: Implementation of Recommendations

MassHealth stated that it agreed with our recommendations and would conduct its own audit of Dr. O’Connor to determine the amount to be repaid.

2. According to the federal Substance Abuse and Mental Health Services Administration, medication-assisted treatment for OUDs consists of a combination of prescription medication and outpatient OUD counseling to provide patients with behavioral coping skills to treat their disorders.

Date published: March 13, 2020

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