Medicaid Audit Unit Impact and Post-Audit Efforts, March 15, 2020 - March 12, 2021

During this time period, auditees implemented recommendations from the Office of State Auditor Suzanne M. Bump that will save taxpayer dollars and make the MassHealth program work better.

The objectives of the performance audits conducted by the Office of the State Auditor (OSA) at MassHealth and its providers are not only to identify improper payments for Medicaid services, but also to identify and resolve any systemic problems such as deficiencies in internal controls that may exist within the MassHealth system. Consequently, while measures such as referring cases to law enforcement for prosecution, recommending restitution, and taking other remedial actions against individual Medicaid vendors are typical results of OSA audits and serve as a deterrent, the systemic changes made by MassHealth as a result of OSA audits, in many instances, have a more significant effect on the overall efficiency of the operation of Medicaid-funded programs.

To assess the impact of our audits and the post-audit efforts made by auditees to address issues raised in our reports, OSA has implemented a post-audit review (PAR) survey process that is conducted six months after the release of an audit. This process documents the status of the recommendations made by OSA, including any corrective measures taken by the auditee as well as any estimates of future cost savings resulting from changes made based on our recommendations.

During the reporting period, OSA issued, and agencies completed, six PARs for Medicaid audits. This number reflects audits with findings issued at least six months ago for which follow-up surveys have been completed. The self-reported surveys are issued six months after an audit is issued to allow management time to plan and implement its corrective action/s. Because the voluntary surveys are sent to MassHealth six months after the audit ends, not all of the audits conducted from March 15, 2020 through March 12, 2021 are included in this section of the report, as those surveys have not been completed yet.

According to the survey results received, MassHealth and its providers reported that it has acted, or will act, on implementing six of eight recommendations. Summaries of the audit surveys follow.

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

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Audit No.	2018-1374-3M1
Issue Date	August 29, 2019
PAR Survey Date	February 27, 2020
Total Recommendations	1
Fully Implemented Recommendations	1
Recommendations in Progress	N/A
Fiscal Benefit	Cost Savings

Findings from the audit of MassHealth’s paid claims for pharmacy drugs revealed that MassHealth improperly paid 25,144 pharmacy drug claims, totaling $982,535. Specifically, MassHealth paid pharmacies the following amounts:

• $300,863 for 4,332 prescription drug refills that exceeded the number of refills authorized by prescribers
• $526,229 for 5,649 refills of emergency (i.e., non-refillable) prescriptions
• $155,443 for 15,163 over-the-counter drug fills supplied to members living in institutional settings.

In its PAR survey, MassHealth stated that it had fully implemented our recommendation. Regarding system changes, the agency stated,

Claims flagged for “incorrect fill numbers” were set to deny beginning [October 24, 2017] and claims flagged for “inconsistent authorized refill numbers” were set to deny beginning [May 29, 2018]. Similarly, claims where an emergency override is attempted more than once on the same prescription number were set to deny beginning [February 5, 2019]. MassHealth intends to send overpayment notices to pharmacy providers who received payment for claims that were submitted with an emergency override code more than once for the same prescription number when the State of Emergency the Governor has declared has been lifted.

MassHealth has enhanced [its] system capabilities to better prevent improper claims for over-the-counter drugs provided to institutionalized members. Certain drug [National Drug Codes] were coded such that claims for these drugs for members in long-term care were set to deny beginning [December 14, 2017].

2. Claims Paid for Day Habilitation Services Provided by United Cerebral Palsy

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Audit No.	2019-1374-3M1
Issue Date	September 19, 2019
PAR Survey Date	May 28, 2020
Total Recommendations	2*
Fully Implemented Recommendations	1
Recommendations in Progress	N/A
Fiscal Benefit	N/A

*     United Cerebral Palsy disputed one recommendation.

The audit of claims paid for day habilitation services provided by United Cerebral Palsy (UCP) revealed that it did not obtain physician or primary care clinician authorizations to support payments for day habilitation services provided to six MassHealth members.

MassHealth stated that it agreed with our recommendations and would conduct its own audit of UCP. However, in its PAR survey, UCP stated, “UCP disputes that its policies and procedures were inadequate or non-compliant with applicable rules and regulations during the audit period.” UCP denied that it failed to obtain the required prior authorizations. UCP also stated that it had “reviewed its policies and procedures to ensure that they are compliant with current rules and regulations” to the best of its knowledge.

3. Office of Medicaid (MassHealth)—Review of Claims Submitted by Dr. Frederick Wagner Jr.

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Audit No.	2018-1374-3M11
Issue Date	September 24, 2019
PAR Survey Date	May 28, 2020
Total Recommendations	1*
Fully Implemented Recommendations	N/A
Recommendations in Progress	N/A
Fiscal Benefit	N/A

*     MassHealth disputed one recommendation.

Findings from the audit of claims submitted to MassHealth by Dr. Frederick Wagner Jr. revealed that Dr. Wagner had inadequate documentation to support at least $301,936 in vision care claims and had submitted improper claims for eyeglass dispensing and fitting services totaling $8,176.

MassHealth did not agree with the recommendation to pay a per-facility-per-day rate. In its PAR survey, MassHealth stated,

Prior to 2007, MassHealth paid once per nursing facility per day, and in 2007 MassHealth changed its methodology to a per-member per-day rate. The reason for the change was in fact to enhance program integrity because MassHealth’s [Medicaid Management Information System, or MMIS] cannot enforce a per-facility-per-day methodology, but it can enforce a per-member-per-day methodology and includes edits to ensure that this limit is not exceeded. If MassHealth were to revert to the old methodology, it would have to address operational and systems challenges that may carry significant additional cost. Therefore, MassHealth does not concur that it would be more cost-effective to pay a per-facility-per-day rate.

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

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Audit No.	2018-1374-3M3
Issue Date	October 18, 2019
PAR Survey Date	May 29, 2020
Total Recommendations	1
Fully Implemented Recommendations	0
Recommendations in Progress	1
Fiscal Benefit	N/A

Findings from the audit of MassHealth’s accounts receivable revealed that MassHealth did not effectively administer its uncollectible accounts receivable balances. Specifically, it did not write off uncollectible amounts from its accounts receivable balances even though there were thousands of accounts receivable that were at least 2, and sometimes more than 10, years old and were therefore unlikely to be collected.

Based on our recommendation, MassHealth stated in its PAR survey that it was “actively working to develop policies and procedures to determine when to write off uncollectible accounts receivable.” According to its PAR survey, it has taken the following steps while creating a write-off policy:

• [MassHealth officials] met with the Office of the Comptroller to inform them of the audit finding and to discuss best practices for writing off uncollectible accounts receivable.
• [MassHealth] created a collection worksheet which reviews each step of the collection process. The worksheet utilizes all available collection tools and will be used to ensure all collection opportunities have been exhausted prior to submitting an accounts receivable for write off.
• [MassHealth] created the MMIS write off reason codes, which went into Production on [November 13, 2019].
• [MassHealth] worked with its MMIS vendor, DXC, to create a weekly write off report that cumulatively lists all MMIS write offs. This report will be used to confirm that overdue receivables that have met the write off criteria have been written off. Additionally, the report was designed so that it can be used by MassHealth credentialing in the event a MassHealth Provider with a previously written off accounts receivable tries to re-enroll in the program. The write off report was tested and enhanced with the final version going into Production on [May 15, 2020].
• On February 21, 2020, [MassHealth] posted a “Collections Specialist” position within the MassHealth Accounts Receivable Unit. The incumbent of this position will take the primary role in reviewing aged accounts receivable to ensure all collection avenues are pursued and uncollectible accounts receivables are written off timely. [MassHealth] reviewed resumes and [has] a list of potential candidates; however, [it has not] yet held interviews due to the pandemic. [It is] monitoring the situation and will review the need for virtual interviews as well as the need to repost the position.

5. Office of Medicaid (MassHealth)—Review of Claims Paid for Services by ActiveLife Adult Day Care,

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Audit No.	2016-1374-3M10A
Issue Date	November 14, 2019
PAR Survey Date	June 1, 2020
Total Recommendations	2
Fully Implemented Recommendations	1
Recommendations in Progress	1
Fiscal Benefit	N/A

The audit of ActiveLife Adult Day Care, Inc. revealed that ActiveLife did not obtain a physician order for $34,137 of services for one MassHealth member.

MassHealth agreed with our recommendations and completed its own audit of ActiveLife. In its PAR, ActiveLife stated that it was still awaiting that audit’s report and findings; however, it had taken action to ensure that it had the physician order in question. Further, ActiveLife noted that it spoke to “the referring doctor to get the original document from her office for the client in question” and obtained a new physician order.

6. Office of Medicaid (MassHealth)—Review of Claims Paid for Services by Old Colony Elder Services

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Audit No.	2020-1374-3M2B
Issue Date	June 29, 2020
PAR Survey Date	December 22, 2020
Total Recommendations	1
Fully Implemented Recommendations	1
Recommendations in Progress	0
Fiscal Benefit	N/A

The audit of Old Colony Elder Services (OCES) found that OCES provided adult foster care (AFC) to MassHealth members without submitting annual prior authorizations.

In its PAR survey, OCES stated,

During the period of May 5, 2017 through December 31, 2018, we were unable to submit Prior Authorizations (PA) on the [Long-Term Services and Supports, or LTSS] Provider Portal. The Portal was implemented by MassHealth on April 16, 2019 and we immediately started submitting [prior authorizations] as required in the regulations. We have continued this practice and will do so going forward to maintain compliance with the Adult Family Care Regulations.

7. Office of Medicaid (MassHealth - Claims Paid for Services by Somerville-Cambridge Elder Services

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Audit No.	2018-1374-3M2C
Issue Date	June 29, 2020
PAR Survey Date	December 22, 2020
Total Recommendations	1
Fully Implemented Recommendations	1
Recommendations in Progress	0
Fiscal Benefit	N/A

The audit of Somerville-Cambridge Elder Services (SCES) found that SCES provided AFC to MassHealth members without submitting annual prior authorizations.

In its PAR survey, SCES stated, “For the period January 1st, 2016 through December 31st, 2018, Approval for the AFC Program was done through [prior management] Coastline Elder Services, Inc.” SCES also noted, “As of April 2019—The Prior Authorization system was implemented. All AFC [prior authorizations] are current.”

8. Office of Medicaid (MassHealth)—Review of Claims Paid for Services by WestMass ElderCare, Inc.

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Audit No.	2020-1374-3M6
Issue Date	July 21, 2020
PAR Survey Date	January 29, 2021
Total Recommendations	1
Fully Implemented Recommendations	1
Recommendations in Progress	0
Fiscal Benefit	N/A

The audit of WestMass ElderCare, Inc. (WMEC) found that WMEC provided AFC to MassHealth members without submitting annual prior authorizations.

In its PAR survey, WMEC stated,

During the period of May 5, 2017 and April 16, 2019, [WMEC] was not able to submit Prior Authorizations via the LTSS Provider Portal. . . . MassHealth instructed all AFC Providers to begin using the LTSS Portal to submit requests for prior authorizations effective April 16, 2019. WMEC’s AFC program has continued to submit Prior Authorizations via the LTSS Provider Portal and will continue to follow this submission method.

9. Office of Medicaid (MassHealth)—Review of Claims Paid for Services by Boston Senior Home Care

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Audit No.	2018-1374-3M2E
Issue Date	July 20, 2020
PAR Survey Date	January 29, 2021
Total Recommendations	1
Fully Implemented Recommendations	1
Recommendations in Progress	0
Fiscal Benefit	N/A

The audit of Boston Senior Home Care (BSHC) found that BSHC provided AFC to MassHealth members without submitting annual prior authorizations.

In its PAR survey, BSHC stated,

BSHC AFC staff participated in the Prior Authorization (PAs) portal trainings conducted by MassHealth, and we have been submitting annual PAs via the on line portal since April 16, 2019. To ensure ongoing compliance with MassHealth requirements, we created standard operating procedures for annual PA submissions, as well as a process to track approved prior authorization periods for all AFC MassHealth members.

Date published:	March 11, 2021