Overview
We found that MassHealth paid for 34 durable medical equipment (DME) claims that could not be verified as having been ordered by an eligible provider.
Specifically, in Stratum 1 of our targeted population, we identified 30 DME claims that were missing provider information on the associated DME order forms. Some of these claims were missing the provider’s name, some did not include the provider’s national provider identifier (NPI), and we did not receive some order forms at all. We extrapolated the test results related to these claims to the entire population of Stratum 1 and estimated, with 90% confidence, that MassHealth made overpayments of at least $493,211 for DME that had missing or incomplete provider information on the associated DME order forms. As a result, we were unable to verify with absolute certainty whether the provider listed on the order form was the provider who actually ordered the DME.
Additionally, we calculated an overpayment of $28,315 related to 4 paid DME claims in Stratum 2. We did not extrapolate an estimated overpayment for the claims in Stratum 2 because it was a nonstatistical sample.
When providers submit claims for DME to MassHealth without the relevant information required to identify the ordering provider, MassHealth risks paying for DME that was not ordered by an eligible provider. Unsupported DME claims represent unallowable costs to the Commonwealth, and MassHealth could have used this money to provide additional services to other MassHealth members or reduce the cost of its services to the Commonwealth.
Authoritative Guidance
Section 1902(kk)(7) of the Social Security Act states the following:
The State requires—
(A) all ordering or referring physicians or other professionals to be enrolled under the State plan or under a waiver of the plan as a participating provider; and
(B) the national provider identifier of any ordering or referring physician or other professional to be specified on any claim for payment that is based on an order or referral of the physician or other professional.
Reasons for Issue
MassHealth officials told us that claim denials for missing ordering provider information were paused in March 2020 because of the COVID-19 public health emergency. MassHealth lifted this pause in September 2023 when it again started denying claims that had missing ordering provider information.
Recommendations
- MassHealth should not pay claims for DME that do not have a licensed provider’s name and NPI on the associated DME order form.
- MassHealth should investigate the claims identified in this finding and recoup any overpayments that it deems appropriate.
Auditee’s Response
As announced in MassHealth’s All Provider Bulletin (APB) 286, MassHealth established pre-pay claims edits in September 2019 that denied claims that did not provide an NPI for an ordering, referring or prescribing [(ORP)] provider enrolled with MassHealth. In March 2020, to reduce providers’ administrative burden as much as possible during the COVID-19 Public Health Emergency (PHE), MassHealth temporarily suspended this edit. The edit was reinstated as of July 2023 per MassHealth APB 361. The [Office of the State Auditor’s (OSA’s)] audit period falls within this period of temporary flexibility to reduce provider burden. . . . Going forward, MassHealth’s pre-pay edits will prevent claims from being paid that do not provide an NPI of a MassHealth-enrolled ORP provider.
MassHealth agrees with [Recommendation 1]. MassHealth notes that items (such as a licensed provider’s name and NPI) missing from a DME order form identified on post pay audits performed by our Third Party Administrator (TPA) would result in recoupment of the claim. MassHealth routinely performs these audits of DME providers to ensure providers maintain appropriate documentation associated with DME claims. . . .
MassHealth agrees with [Recommendation 2]. MassHealth will review the claims identified by the OSA and carry out recovery processes as appropriate.
Auditor’s Reply
Based on its response, MassHealth is taking measures to address our concerns regarding this matter. As part of our post-audit review process, we will follow up on this matter in approximately six months.
| Date published: | October 30, 2025 |
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