The Catastrophic Illness in Children Relief Fund Reimbursed Applicants $24,455 for Medical Expenses Without Required Documentation.

Without documentation, there is inadequate assurance that these were qualified medical expenses and were calculated at the correct value under state law.

Overview

During the audit period, the Catastrophic Illness in Children Relief Fund (CICRF) reimbursed applicants $24,455 for medical expenses that did not have the required documentation that should have been used to determine whether they were qualified expenses and to complete a sliding fee scale that would determine the allowable amount. As a result, there is inadequate assurance that these were qualified medical expenses and were calculated at the correct value under state law.

Authoritative Guidance

CICRF's "Eligibility Policy" and "Procedures fir Fund Staff" require that documentation be provided to determine whether an expense meets the eligibility criteria (that it be medically necessary and that there be no other available payer) to be a qualified expense.

Section 5(d) of Chapter 111K of the Massachusetts General Laws requires CICRF to use sliding fee scales that are based on family size and income to determine the amount of allowable reimbursement.

Reasons for Issue

CICRF did not have monitoring controls to ensure that its staff had all required documentation before reimbursing medical expenses.

Recommendation

CICRF should develop monitoring controls to ensure that its staff has all required documentation before reimbursing medical expenses.

Auditee’s Response

CICRF is committed to obtaining all required documentation prior to approving any reimbursements to a family. CICRF acknowledges that documentation was missing from four paper files out of the 120 sample files the program pulled for review for this audit and concluded after a thorough debrief that the required documentation was present at the time these four payments were reviewed and approved, the expenses were all qualified medical expenses, payments were paid appropriately according to Fund sliding scales, and the missing documentation was later misfiled.

[The Department of Public Health, or DPH] has determined that CICRF has the appropriate monitoring controls in place to ensure that staff have all required documentation before expenses are approved for reimbursement and funds are disbursed in accordance with Fund policies.

CICRF has been involved in a multi-year initiative to reduce paper-based files and is actively in the development phase of a Customer Relationship Management (CRM) system that will reduce loss or misfiling of critical documents.

Standard Operating Procedures: The process for reviewing and approving applications for payment once an applicant’s package is completed is as follows:

1. CICRF staff reviews all documentation and calculates income and the amount of eligible expenses to determine eligibility and amount of reimbursement following Fund policies.
2. The CICRF Director or designee reviews and approves all documentation and calculations to ensure that Fund policies and procedures have been followed.
3. The CICRF Director approves the payment packet and submits it to the Bureau of Family Health and Nutrition’s Administration & Finance (A&F) Unit for review and approval adhering to their monitoring controls.
4. The A&F staff enters the payment into the Massachusetts Management Accounting and Reporting System (MMARS) and submits the payment packet including expense documentation to the DPH Accounting Office to process payment of approved expenses for this application.

Analysis of Missing Documentation: Regarding the four cases cited, CICRF is confident that staff had sufficient and appropriate documentation to determine that the reimbursed expenses were qualified medical expenses under Fund policy. The expenses in question were for Family Support (assistance with the cost of visiting/transporting a child/youth to the hospital) and a wheelchair-accessible van which are two of the most frequently reimbursed expenses paid by the Fund. CICRF provided [the Office of the State Auditor, or OSA] with copies of the payment packets that had been submitted to A&F and Accounting; the packets included receipts and proof of payment from families for expenses being reimbursed.

CICRF staff have reviewed the correspondence, hospital medical record releases, [CICRF] Commission case review and spreadsheets in the four electronic case files. Review of the spreadsheets verify that family reimbursement was calculated at the correct amount using appropriate sliding scales following all Fund policies and procedures. In three cases, the child’s primary insurance was MassHealth Standard indicating family income was less than 300% of the Federal Poverty Income Guidelines (FPIG). In the fourth case, the family was reimbursed for a modified van. This family’s income was less than 800% of the FPIG and the appropriate sliding scale was used to calculate reimbursement at 100% of the allowed vehicle scale amount of $7,500.

Auditor’s Reply

CICRF states in its response that required supporting documentation was missing from four of the case files that OSA selected for testing. OSA agrees that two case files were missing required documentation, including income and expense packets. (CICRF uses income and expense packets to verify the eligibility of applicant income and to determine whether expenses are qualified medical expenses and therefore reimbursable.) CICRF was unable to locate the other two case files at all.

In its response, CICRF states,

The required documentation was present at the time these four payments were reviewed and approved, the expenses were all qualified medical expenses, payments were paid appropriately according to Fund sliding scales, and the missing documentation was later misfiled.

OSA cannot substantiate this assertion because, as previously noted, CICRF did not provide us with the documentation necessary to do so. Although CICRF may maintain spreadsheets that document eligibility determination information, and it was able to provide evidence that it reimbursed families by supplying payment packets to OSA, without the required source documentation CICRF cannot substantiate that the reimbursements it made in these four cases were for allowable expenses and were calculated correctly.

DPH states that it believes CICRF has proper monitoring controls to ensure that all required documentation is reviewed before payments are disbursed. However, this does not appear to be the case, as we found reimbursements related to the four case files previously mentioned that did not contain required documentation, such as income or expense verifications, and therefore had no evidence that the required documentation had been submitted and reviewed first. Effective monitoring controls would ensure that all required documentation was retained in each applicant’s case file. We acknowledge that CICRF has implemented standard operating procedures for this activity. Effective monitoring controls are also essential in ensuring that the procedures are followed as prescribed by all staff members.

Finally, CICRF states that it is developing a system to reduce paper-based files and “reduce loss or misfiling of critical documents.” We agree that this system could be beneficial; we also urge CICRF to implement our recommendation to develop effective monitoring controls for collecting supporting documentation before making reimbursements.

Date published:	April 20, 2022