Report  Annual Report Medicaid Audit Unit for March 15, 2017-March 14, 2018

A review of the work conducted by State Auditor Suzanne M. Bump's Medicaid Audit Unit over the past year. It highlights audits released, audits in progress, and the impact of the Unit's work.

Organization: Office of the State Auditor
Date published: March 15, 2018


The Office of the State Auditor (OSA) receives an annual appropriation for the operation of a Medicaid Audit Unit (the Unit) for the purposes of preventing and identifying fraud, waste, and abuse in the MassHealth system and making recommendations for improved operations. The state’s fiscal year 2017 budget (Chapter 47 of the Acts of 2017) requires that OSA submit a report to the House and Senate Committees on Ways and Means by no later than March 15, 2018 that includes (1) “all findings on activities and payments made through the MassHealth system”; (2) “to the extent available, a review of all post-audit efforts undertaken by MassHealth to recoup payments owed to the commonwealth due to identified fraud and abuse”; (3) “the responses of MassHealth to the most recent post-audit review survey, including the status of recoupment efforts”; and (4) “the unit’s recommendations to enhance recoupment efforts.”

OSA submits all costs (direct and indirect) associated with running this unit to the Executive Office of Health and Human Services (EOHHS) to be included in its in quarterly filings with the Centers for Medicare and Medicaid Services for federal cost sharing. In calendar year1 2017, OSA submitted a total of $1,444,621 to EOHHS for consideration for the state’s program integrity, allowing the state to obtain a 50%, or $722,312, reimbursement of these costs. 

This report, which is being submitted by OSA in accordance with the requirements of Chapter 47, provides summaries of three performance audits involving the following:

  • fee-for-service payments for services covered by the Massachusetts Behavioral Health Partnership
  • payments for the durable medical equipment program
  • nursing-facility per-diem payments

It also summarizes six MassHealth medical provider audits involving the following:

  • providers that were paid for evaluation and management services (three audits)
  • hospice-care providers (two audits)
  • a vision-care provider (one audit)

In addition, it summarizes four audits of human-service providers; these included reviews of MassHealth’s payments for adult foster care and home health services.

It also summarizes 17 MassHealth audits that are currently underway. Finally, it details the corrective measures and related outcomes reported by the auditees, including MassHealth, in relation to our findings and recommendations for 12 audits.

For fiscal year 2018, the appropriation for the Unit was $1,163,789. This amount represents a less than 1% increase over the Unit’s fiscal year 2017 appropriation of $1,152,276. During this reporting period, the Unit completed 9 audits and initiated 17.    

This report details findings that identified more than $211 million in unallowable, questionable, duplicative, unauthorized, or potentially fraudulent billings—a potential return of more than $183 for every dollar of funding appropriated to the Unit. The report also describes corrective actions being taken by MassHealth as a result of 12 audits whose findings were issued at least six months ago for which a follow-up survey has been completed and MassHealth has taken actions to begin recouping funds. Auditees reported action or planned action on 87% of our audit recommendations, which will improve operational efficiency and effectiveness. MassHealth stated that it was pursuing up to $2,125,318 in recoveries as a result of the Unit’s audit work.

A PDF copy of the Annual Report of the Medicaid Audit Unit is available here. 

  1. The federal government uses the calendar year as its fiscal year.




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