MassHealth overpaid for drug tests, audit finds

MassHealth, the state Medicaid program, overpaid up to $4.4 million over nearly four years to laboratories that improperly billed for drug testing, according to a report Thursday by state Auditor Suzanne M. Bump.

The erroneous payments represent a tiny fraction of MassHealth’s $15.3 billion annual costs, but suggest a failure to catch mistakes and overbilling at a time when spending on urine screening is exploding nationally as addiction treatment providers monitor their patients’ drug use.

Bump urged the state agency to attempt to recoup the lost money, and MassHealth indicated it would do so.

But Elissa Snook, a MassHealth spokeswoman, said agency officials “strongly disagree with several of the Office of the State Auditor’s findings and have already implemented reforms.”

MassHealth has curbed unnecessary drug screening and testing and set up a fraud detection system, Snook wrote in an e-mail. That has resulted in a 71 percent reduction in MassHealth’s expenditures for drug screening and drug testing over the past 11 state fiscal years.

Most of the improper payments involved billing for multiple procedures individually, rather than submitting a single comprehensive bill for each patient, according to the auditor’s report.

At issue are two types of tests. “Qualitative drug screens” are tests performed to find out whether people under treatment for substance-use disorder are using any illicit drugs.

Screens merely determine whether an illicit substance is present in the urine — a yes-or-no answer.

The more expensive “quantitative drug tests” provide more details, identifying the quantity of each substance in the sample, enabling a physician to see, for example, not merely that opioids are present, but whether the patient was taking heroin or oxycodone.

These tests are used in emergency settings and for medication management.

When a drug screen and a drug test are performed on the same patient on the same day, the laboratory is supposed to bill for them together under a single procedure code. But, according to the auditor’s report, some laboratories were “unbundling” the tests — billing for the drug screen and the more detailed drug test separately and getting paid more as a result.

In many cases, the audit found, a bill was submitted by one provider, and a second bill by another provider — even though the sample was taken from the same patient on the same day.

The auditor’s office examined 2.2 million drug test claims from March 1, 2013, through June 30, 2017.

MassHealth officials said that some of the claims mentioned in the report occurred during a “gap period” when the state had to incorporate new codes into the system. They also noted that on April 5, MassHealth suspended all payments to Discovery Diagnostics Laboratory, which was responsible for a number of the improper claims cited in the report.

Similar abuses were the subject of a 2013 audit, which found that MassHealth spent $9 million on unnecessary and excessive drug testing.

MassHealth adopted measures to address the problem, including changing its system to deny improper laboratory claims rather than just flagging them. But Bump’s office found some bad claims were still getting through. “MassHealth needs to take stronger measures to stop drug labs from ripping off taxpayers,” Bump said in a statement.

MassHealth is the state government’s largest program, serving 1.9 million low- and moderate-income people and accounting for about 39 percent of the state budget.