Audit finds flaws in MassHealth spending

The Massachusetts Medicaid program spent $35 million on questionable claims for health care provided to low-income immigrants, according to a critical report released Wednesday by state Auditor Suzanne Bump.

The findings reflect “serious weaknesses” in the agency’s claims processing system, Bump concluded, and illustrate the need for tighter controls.

The audit found that the state’s Medicaid agency, known as MassHealth, routinely paid for nonemergency medical care for roughly 45,000 immigrants from July 2011 through December 2012. The review identified 270,167 questionable or unallowed claims for services such as speech therapy, fluoride treatment, and physical therapy.


Bump’s report concluded that “with any government program, public confidence is essential to the success and continued support . . . Therefore, MassHealth must have effective controls in place.”

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The state’s Executive Office of Health and Human Services, which oversees Medicaid, defended its practices, saying in a statement that the program in question provides “basic lifesaving services to some of Massachusetts’ most vulnerable residents.”

Bump’s office examined Medicaid’s Limited Program and its payment of medical bills for this pool of immigrants, who are entitled to emergency medical services under the program’s rules. The auditors said they believe that roughly 89 percent of the immigrants were in the United States illegally during the time of the audit.

The $35 million in question represents nearly half of the total spent by MassHealth during that period in the Limited Program, the auditor said. But it represents less than 1 percent of MassHealth’s total spending during that span on health care services for about 1.4 million low- and moderate-income Massachusetts residents.

Since April 2013, MassHealth has adopted cost-saving measures within its claims system to better identify and deny some of the bills in question, the audit found, and these changes should save the state about $2.4 million a year.


But the Executive Office of Health and Human Services disputed much of the auditor’s findings regarding its coverage of medical treatments for immigrants.

“We respectfully disagree with the state auditor’s definition of emergency services, which would preclude coverage under this program for critical medical conditions including kidney failure, broken bones, ectopic pregnancy, appendicitis, aortic aneurysms, insulin for diabetics, and other life-threatening injuries and conditions,” the agency said in a statement.

“MassHealth is required under both state and federal law to cover these emergency services for families and children who would otherwise be eligible for Medicaid but for their immigration status,” the agency’s statement said.

The agency also said that it relied on physicians to determine whether the services provided to patients in the Limited Program were for emergency conditions.

The auditor said the agency’s attitude toward the findings proved troubling.


“Their disagreement with our audit finding reflects the potential for further misspending in the future,” Bump said.

‘Their disagreement with our audit finding reflects the potential for further misspending.’

Patient advocates criticized the report, saying it inflated a problem that has largely been fixed.

“This is a very minuscule amount of the overall MassHealth budget, under a tenth of one percent,” said Amy Whitcomb Slemmer, executive director of Health Care for All, a Massachusetts advocacy group. “We feel confident that the accounting issues have been fixed.”

Slemmer also noted that most of the insurance bills in question would have been paid anyway out of a different pool of money known as the Health Care Safety Net, which is an account largely funded through a surcharge on hospital and health insurers.

The auditor’s report acknowledged that point, noting thatimmigrants who need medical care not covered under the Limited Program have access to free or low-cost clinics in the community.

Joshua Archambault, a senior fellow at the Pioneer Institute, a conservative Beacon Hill think tank, said the report’s findings are a cause for concern.

“This is just another example of some of the mismanagement in the Medicaid program,” Archambault said.

He highlighted a federal audit released in October that found the US government made nearly $106 million in excess Medicaid payments to Massachusetts, and recommended that the state be ordered to refund the money.

Medicaid is a joint federal and state program run by the states. The earlier report found that the Massachusetts Medicaid program had incorrectly calculated the amount it sought to be reimbursed by the federal government through claims submitted between October 2008 and December 2010.

“It’s a sad state of affairs that we keep getting reports of mismanagement of taxpayers’ money in millions of dollars, and that translates to less money for education, or public safety, or other public priorities,” Archambault said.

“It will be interesting to see whether the federal government says, ‘Hey, wait a second. These [latest auditor findings] were improper payments and you have to pay us back.’ ”

Kay Lazar can be reached at Follow her on Twitter @GlobeKayLazar. Travis Andersen can be reached at Follow him on Twitter @TAGlobe