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Audit: Verification procedures leave MassHealth vulnerable to fraud

Thousands of out-of-state residents could be wrongfully receiving state health care benefits because MassHealth fails to verify their residency, while others may be receiving benefits without meeting ­income qualifications, according to a state audit released Wednesday.

The lack of verification could be costing Massachusetts millions of dollars each year, accord­ing to the report from the state’s auditor, Suzanne Bump. Based on the magnitude of the program, which has 1.3 million enrollees, “the financial ramifications of MassHealth not performing effective income eligibility verifications for applicants could have an adverse effect on the Common­wealth’s finances,” the report stated.

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Too many income and residency claims are left unchecked and are taken at face value, Bump said. Asked if program overseers have the resources to verify all the information submitted by applicants, Bump said, “They have an obligation to under the federal rules and under their own policies.”

“I realize that MassHealth has a very difficult job to do to maintain access to folks that experience a lot of job and residency instability,’’ she said. “At the same time, you’ve got to weigh that against the ­finite number of public dollars that support this program.’’

“Obviously, our purpose was not to try to determine how many ineligible people receive benefits, but rather to look at the program’s integrity and raise the flags and help concentrate MassHealth on achieving a better balance,” Bump said.

The price tag for MassHealth — which provides health benefits to low- and moderate-income residents, or nearly 1 in 5 Massachusetts residents — has increased significantly in the last five years, on average 8.7 percent annually. During the same period, enrollment has grown by more than 26 percent, according to the report. In fiscal 2011, MassHealth paid health care providers more than $12.2 billion, of which 35 percent was state-funded, according to the report.

Dr. Julian Harris, the state’s Medicaid director, said of the report, “Some important issues were raised; some we have already taken steps to address.”

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