MassHealth Mistakes Cost Taxpayers Over $500M

In an audit of MassHealth—the MA Medicaid agency—released Tuesday, June 16th, by Massachusetts Auditor, Suzanne Bump, reported that the commonwealth’s health care program has wasted over 500 million dollars over the last five years. The errors resulted in duplicate payments being made for health services that were provided in the years studied. This error is the largest financial error uncovered by Bump’s office in nearly thirty years.

500 Million in Misapplied Funds

The audit of the MassHealth system covered the years between October 2009 and September 2014. During that five year period, the MassHealth system racked up an astonishing 500 million dollars in misapplied funds and unnecessary expenditures. Some 233 million dollars of the total amount was squandered by paying medical providers directly, in direct violation of existing laws that provide for those services to be paid for by a state qualified MCO (Managed Care Organization).

Doubly Charged for a Single Service

According to the audit, the problem that caused these errors has to do with MassHealth’s record keeping. MassHealth did not maintain a master list detailing which medical procedures must be covered by the MCOs program-wide. This meant that the MassHealth claims system was unable to identify the services that should have been covered by the MCOs. As a result, payments were made to direct medical providers for services that were already paid for through the MCOs. This happened not once, but on a total of nearly 1.5 million occasions. The bill has naturally been passed on to the state’s taxpayers, making this an issue that will have far reaching financial, social, and political repercussions.

A Shocking and Shameful Sum

In addition to the 233 million dollar error by the state’s Medicaid system, Auditor Bump’s report also managed to expose an additional 288 million dollars that was wasted when the MassHealth agency spent that amount on services that it was not required to provide. It turns out that these services—although not provided for under the terms of a legally binding contract—were often covered by MCOs in the commonwealth. As a result, the total expenditure of misapplied funds has risen to an officially estimated $521 million.

Disputing the Findings

Following the revelation of these unprecedented charges, MassHealth has struck back in its own defense. The agency has issued statements to the public in which it claims that only $60 million (of the alleged total of $233 million) was wasted in payment for duplicate funds. It also claims that $127 million of the total figure was spent in an appropriate fashion. However, MassHealth also stated that it needed to make their policies more clear and would implement “all actionable recommendations” from the audit.