Press Release  Bump: Audits of Medicaid Spending Saves the Commonwealth Millions

Boston — State Auditor Suzanne M. Bump issued a report on the annual activities of her Medicaid Audit Unit. In the past 12 months, audits of MassHealth and the Medicaid funded services have identified over $21 million in unallowable, excessive, unnecessary, duplicative or potentially fraudulent billings.  

Today’s report reviews a body of work which uncovered excessive state-funded drug screenings, unallowable and possibly fraudulent activities of a Quincy based dental provider, and fiscal mismanagement of the Holyoke Geriatric Authority. The report is legislatively required to be issued in each March.

The report also details how corrective actions being taken by MassHealth to address the audit findings will save the Commonwealth more than $7.7 million. In addition, the programmatic changes made by MassHealth based on our audit work will result in year-over-year savings of approximately $3 million.

For example, changes made to MassHealth’s claims system to detect duplicate and excessive billings have resulted in a 71% decrease in payments for certain dental evaluations, and an average 51% drop in payments for substance-abuse tests per month.

“Services provided by MassHealth represent approximately one third of all state spending. Our audits help MassHealth identify risk areas and provide pathways to improvement. With an approximately $800,000 budget, our Medicaid Unit provided an 800% return on investment for the Commonwealth,” said Auditor Bump.

The state’s Medicaid program, known as MassHealth, provides access to healthcare services annually to approximately 1.4 million eligible low- and moderate-income children, families, seniors, and people with disabilities. In Fiscal Year 2013, MassHealth paid more than $10.8 billion to healthcare providers, of which approximately 50% was funded with Commonwealth funds. Medicaid expenditures represent approximately 33% of the Commonwealth’s total annual budget.

The Office of the State Auditor conducts performance and compliance audits of state government’s programs, departments, agencies, authorities, contracts, and vendors. With its reports, the OSA issues recommendations to improve accountability, efficiency, and transparency.

The Annual Report of the Medicaid Audit Unit is available here.

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