Audit says MassHealth made $193m in improper, questionable payments

Massachuetts Auditor Suzanne Bump.
Massachuetts Auditor Suzanne Bump. (John Blanding/Globe staff)

MassHealth made $193 million in improper or questionable payments for mental health services between 2010 and 2015, a new audit by state Auditor Suzanne M. Bump’s office has found.

The audit, released Monday morning, follows another from 2015 that found similar problems with the way MassHealth, the state’s insurance program for low-income residents, administered contracts with agencies that provide health services to clients.

MassHealth on Monday disputed many of the audit’s findings, arguing that auditors failed to recognize the proper way to categorize medical services for people who also receive behavioral health care. It said it found less than $1 million in possible payment errors.


But Bump said this is not the first time her office has uncovered problems with MassHealth’s system for evaluating claims, and she urged the program to reform its practices.

“This audit is the latest example of a poorly run claims administration system within the MassHealth program,” she said in a conference call with reporters Monday afternoon.

This audit concerns payments to the Massachusetts Behavioral Health Partnership, a managed care organization that provides behavioral health and substance abuse services to some MassHealth recipients for a fixed monthly fee.

MassHealth, which paid providers more than $13 billion in fiscal year 2015, has a contract with the Massachusetts Behavioral Health Partnership that specifies the kinds of services covered by MassHealth.

Between July 2010 and June 2015, MassHealth paid approximately $2.6 billion for members enrolled in the Massachusetts Behavioral Health Partnership, seeing an average of 375,000 people daily, according to the audit.

The audit found two areas of concern during the five-year time period. First, it found that in addition to its monthly payments to the behavioral health partnership, MassHealth also directly paid doctors $93 million for the same services.

In addition, it found that MassHealth made about $100 million in questionable payments for services not specifically included in the list of services covered in the contract. Those include family therapy sessions, behavioral health counseling, and psychological testing, according to the audit.


Bump, in the phone call, said part of the disagreement stems from different understandings about who is responsible for paying for what, and part of it comes from MassHealth acting contrary to its own rules and standards.

For example, part of the discrepancy was over $40 million in claims paid to state agencies. MassHealth said payments to entities such as the Department of Mental Health were excluded from its contract with Massachusetts Behavioral Health Partnership, while the auditor’s office said they were included.

MassHealth spokeswoman Michelle Hillman said the auditor’s office does not understand the distinction between behavioral health services and medical services delivered to individuals who also have behavioral health conditions. Some patients who are treated for behavioral services also receive medical care that is rightly billed separately, according to MassHealth.

“MassHealth disagrees with the state auditor’s office analysis,” the spokeswoman said in a statement.

The MassHealth spokeswoman said that since 2015 the program has implemented major reforms and new internal controls to better manage and evaluate claims that have saved more than $350 million.

The auditor’s office recommended that MassHealth recoup the $93 million of payments they deemed improper. It also said MassHealth should review the other $100 million in claims deemed questionable to determine if any of that should be recouped as well.

Bump’s office also suggested that MassHealth, in conjunction with Massachusetts Behavioral Health Partnership, develop a master list of services covered under the contract, to avoid this type of error in the future.


“We think that it is imperative that MassHealth get a handle on this program,” Bump told reporters, estimating that it could save $27 million per year if they straightened out these issues in the future.

MassHealth said it agrees with the recommendation to create a master list but stands by its approach of billing separately medical services given to patients who also receive behavioral health services.

Asked about the results of the audit, Governor Charlie Baker, a former health care executive, said the data is old but could be important.

“Any opportunity to save money is a good opportunity, but, again, the data at this point is somewhere between two and seven years old,” said Baker, adding that he hadn’t read the audit yet.

Laura Krantz can be reached at Follow her on Twitter @laurakrantz.