Office of Medicaid (MassHealth) — Review of Capitation Payments
Learn how the AI-generated research projects were createdOverall Conclusion
MassHealth did not ensure that it does not make capitation payments to MCOs on behalf of ineligible members who reside outside Massachusetts; the State Auditor identified approximately $84.8 million in overpayments and issued recommendations to strengthen residency verification and data-matching processes.
Source Document
Audit Scope
January 1, 2018 through September 30, 2021
Key Findings Summary
MassHealth made an estimated $84,832,094 in capitation payments to MCOs on behalf of members who were residing outside Massachusetts (in nine other states and Puerto Rico), based on a sample of 100 members; 63 members in the sample had moved to another state or territory and continued to receive capitation payments for periods ranging from 5 to 45 months. Th…
AI-Assisted
AI Scope Summary
Building on the findings that MassHealth established insufficient residency verification leading to substantial capitation overpayments, future audits should evaluate the robustness of residency determination processes, the reliability of cross-state data sources (including T-MSIS and PARIS), and the effectiveness of remedial actions taken by MassHealth to prevent concurrent out-of-state capitation payments.
AI-Generated Insight
The report highlights significant gaps in residency verification, data matching, and inter-agency data access. Strengthening access to T-MSIS and improving PARIS follow-up could reduce improper capitation payments and improve MassHealth program integrity.
Audit Objectives
Determine whether MassHealth ensures that it does not make capitation payments to managed care organizations (MCOs) on behalf of ineligible members who reside and receive benefits in another state or territory, in compliance with Massachusetts and federal residency and eligibility requirements.
Audit Findings (1)
MassHealth made an estimated $84,832,094 in capitation payments to MCOs on behalf of members who were residing outside Massachusetts (in nine other states and Puerto Rico), based on a sample of 100 members; 63 members in the sample had moved to another state or territory and continued to receive capitation payments for periods ranging from 5 to 45 months. The audit identified weaknesses in residency verification controls, including reliance on PARIS data matches without timely follow-up, and limited access to the Transformed Medicaid Statistical Information System (T-MSIS).
Recommendations (4)
Revise policies and procedures regarding data matches for member eligibility; require that all members flagged by data matches provide documentation to substantiate Massachusetts residency; if documentation is not provided, pause coverage or move to fee-for-service until determination is made.
Investigate and resolve all instances where data matches indicate a member is enrolled in another state's Medicaid program.
Provide members with written instructions during the annual enrollment process on how to unenroll from MassHealth if they move outside Massachusetts.
Consult with CMS to determine if MassHealth can gain access to T-MSIS for eligibility detection and residency verification.