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NADHC Did Not Always Properly Document Claims Submitted to MassHealth by Its Billing Agents to Ensure That the Correct ADH Location Was Indicated.

The audit notes that due to these inaccuracies, MassHealth could reject these claims, which would result in a loss of billing revenue.

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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. Specifically, the billing agent indicated that these members received their services from NADHC, but the services were actually provided by Harmony Adult Day Health Center in Lakeville and Mansfield Adult Day Health Center in Mansfield. As a result, MassHealth could reject these inaccurate claims, resulting in a loss of billing revenue for provided services.

Authoritative Guidance

According to 130 CMR 450.301(A), “a claim for a medical service may be submitted only by the provider that provided the service.” In addition, 130 CMR 450.331 states,

Any provider that engages a billing agent [e.g., HealthCare Options and the Aging Services Access Point (ASAP) Bristol Elder Services] . . . is fully responsible to [MassHealth] for all acts by such billing agent.

Reasons for Noncompliance

HealthCare Options bills MassHealth for all three of HealthCare Options’ ADH locations (NADHC, Harmony Adult Day Health Center, and Mansfield Adult Day Health Center). For 52 of the 53 members for whom the wrong location was used, the incorrect bills were submitted by HealthCare Options on behalf of NADHC. In relation to these members, the HealthCare Options controller told us that when HealthCare Options implemented a new billing system in July 2017, the wrong service location identification number was loaded into the system for some members. As a result, HealthCare Options billed MassHealth using NADHC’s service location identification number for services to 52 members even though the services were provided at Harmony Adult Day Health Center. In addition, because NADHC does not have any policies or procedures that require its staff to monitor HealthCare Options’ claim submissions, it did not identify and correct this error.

For one member, the incorrect bill was submitted by the ASAP Bristol Elder Services. In relation to this member, the HealthCare Options controller told us that NADHC does not have any controls in place to monitor claim submissions made by ASAPs for ADH services it provides to members enrolled in senior care organization or accountable care organization plans.


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.

Auditee’s Response

In 2017, we purchased and installed a new billing software application, ADS Data Systems, for our Adult Day Health Centers—Norwood ADHC, Mansfield ADHC, and Harmony ADHC.

The first site to utilize the new software was Harmony ADHC. The July 2017 claims for our Harmony ADH center were batched and uploaded to the MassHealth [Provider Online Service Center, or POSC] on 8/15/17 and 8/25/17 under the Norwood ADH [National Provider Identifier, or NPI] # inadvertently due to a technical error.

During the initial setup with the ADS vendor, the correct Provider ID # and NPI # were both submitted by HealthCare Options, Inc. for the vendor to use in the programs’ database configurations; however, at that time we were unaware that the vendor had incorrectly loaded the Norwood NPI # into the Harmony database. The [MassHealth] POSC acknowledgements all reflected the correct Harmony Provider ID . . . so it all looked correct to the billing uploader.

When the payment remittance advices were extracted from the [MassHealth] POSC sometime in September 2017, we realized that the MassHealth payment for Harmony’s July claims were actually paid to HealthCare Options, Inc. under the Norwood site’s NPI #. No additional/duplicate payment was made for these claims under the Harmony NPI #.

On September 27, 2017, an email was sent to MassHealth’s [Electronic Data Interchange, or EDI] department regarding this error and what was needed to correct the situation, if anything at all. We also immediately contacted our vendor and explained the situation, who suggested we could VOID and rebill the claim. Since the claim was paid, it was not clear if we really needed to do that at all. ADS confirmed the NPI upload error in the database and corrected the problem. ADS then requested that the [MassHealth] EDI department forward instructions to ADS on how to VOID a claim. That is the last documented correspondence on this matter.

In mid-October, a phone conversation followed between HealthCare Options, Inc. and ADS on how to resolve the issue. At that time, the only resolution offered to us was to go into the ADS program and manually mark each claim line as Unbilled. Upwards of 1,500 individual lines of claims were involved. Due to time constraints and lack of manpower, this was not done for the July 2017 claims.

In summary, there was no act of intent to incorrectly bill MassHealth. The mistake was a result of unintentional technical error and our billing department immediately contacted MassHealth to identify the error.

Regarding the auditor’s recommendation that we have policies in place, please note that we do have policies in place. The correct Provider ID# on the [MassHealth] upload acknowledgements for the Harmony claims was verified. The incorrect NPI # in the Harmony database was not visible and corrected immediately by both our organization and the software vendor once it was known to us. Claim submissions are regularly monitored by staff as a general practice. The exception in this case is that the ADS billing software was a new billing program at the time and there was a setup error on the part of the vendor that was not identified by us until the payment was received.

MassHealth’s Response

MassHealth agrees with this recommendation.

Auditor’s Reply

Our report does not state or imply that NADHC intentionally billed MassHealth incorrectly for the services in question. We merely point out that a significant billing error occurred during our audit period and that in our opinion, NADHC needs to improve its controls over this process to better ensure that such billing errors do not occur in the future.

Date published: June 6, 2019

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