Report: MassHealth spends $85M on out-of-staters | News

BOSTON — The state’s Medicaid program mistakenly paid tens of millions of dollars on health care for out-of-state patients, according to a state audit.

The report by State Auditor Diana DiZoglio’s office found that MassHealth spent nearly $85 million on overpayments to managed care organizations for out-of-state residents who were also enrolled in another state’s health care program.

Auditors reviewed the billing history of 100 MassHealth members and found the agency had made 1,234 capitation payments, totaling $488,770, on behalf of 63 recipients who were living in other states from Jan. 1, 2018 to Sept. 30, 2021.

The overpayments went to people who were already enrolled in Medicaid programs in at least nine other states, including California, Florida, and New Hampshire, as well as Puerto Rico — which had the highest number of payments, the auditors said.

DiZoglio called the overpayments “unacceptable” and said the state agency “lacks effective controls” to determine if recipients meet the state’s residency requirements.

“Taxpayers deserve better, and I strongly urge MassHealth to adopt this audit’s recommendations,” she said in a statement.

In response, the state Executive Office of Health and Human Services said it “strongly disagrees” with many of the conclusions of the audit, calling it “overly broad.”

The agency said more than 6,000 MassHealth memberships have been terminated since 2018 after it was determined that they no longer lived in the state.

Another 35,000 members were transferred from managed care to a fee-for-service plan after it was determined they no longer met the residency requirements, the agency said.

“Contrary to the auditor’s conclusion of ‘no’ these actions and outcomes demonstrate that EOHHS takes steps to ensure that it does not make capitation payments to MCOs on behalf of members who reside in another state or territory,” according to the agency.

MassHealth is funded by the state and federal governments and serves more than 2.3 million low-income recipients. That’s roughly 1 in 3 people in the state.

Health care coverage is one of the state’s biggest expenses. Medicaid costs have doubled in the past decade and now account for nearly 40% of spending.

That has made the agency a regular target for state auditors and other fiscal watchdogs.

Last year, a report by then-Inspector General Glenn Cunha found that between Jan. 1, 2017, and Dec. 31, 2020, MassHealth paid an estimated $6.4 million in medical claims to 2,698 members after their listed date of death.

Many of the deaths occurred prior to 2017 and some dated back as far as 1953, according to the report.

Earlier this year, DiZoglio’s office released an audit revealing more than $4.8 million in fraudulent activity involving MassHealth’s programs during the second quarter of the previous fiscal year, from Oct. 1 to Dec. 31.

Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at [email protected].