Audit faults Massachusetts payments, cites money for inappropriate payments

According to the audit, MassHealth inappropriately paid more than $15 million for adult foster care over 5-year payment

BOSTON (State House News Service) – Citing “systemic problems” in the payment process governing the state’s largest program, Auditor Suzanne Bump on Tuesday released an audit showing more than $300,000 in inappropriate payments for adult foster care services at MassHealth.

The payments, made by MassHealth to the Worcester-based human services provider Centro Las Americas Inc., covered services that clients received through the home health program from other providers, according to the audit that examined Centro’s activities from July 1, 2013 through June 30, 2015.

“The payments for duplicative services to Centro Las Americas are concerning, but more concerning are the patterns of systemic problems in the payment process at MassHealth,” Bump said in a statement. “This audit shows that once again, MassHealth is not only ignoring their own regulations, but also directing providers to disregard them as well. These regulations ensure transparency and accountability on how public dollars are spent, and cannot be ignored in favor of rule-making by email outside of the public view.”

The audit also found that Centro spent $57,341 in state funds on unallowable expenses, including meals that were not properly documented, gifts, golf outings and two trips to Puerto Rico to explore the possibility of developing a business re-selling Puerto Rican coffee in the United States as a new stream of revenue.

Bump recommended that the agency reimburse the state for these expenses and “amend its policies and procedures to ensure that all non-reimbursable expenses are properly identified and reported.”

In its response to the audit findings, Centro asserted that it does have adequate policies in place.

Bump also called on Centro to “find out whether MassHealth intends to cease paying” for duplicative services. The agency billed and received $304,000 in MassHealth payments for adult foster care services that were not allowed under state regulations, according to the audit. MassHealth’s regulations say it does not pay for adult foster care for someone who is receiving any other personal care services, including home care.

MassHealth received the auditor’s report and is reviewing it closely, spokeswoman Michelle Hillman said.

“While some of the payments did not occur under the current administration, MassHealth will take action to recover any inappropriate payments and strengthen our systems,” Hillman said in a statement.

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MassHealth last year named controlling increased spending in certain program areas as a top priority and in response launched a series of “program integrity initiatives,” including soliciting a third-party administrator to improve monitoring and controls in fee-for-service programs such as adult foster care, Hillman said.

The audit said a September 2014 email from then-director of long-term services and supports told adult foster care providers “that they could bill for certain home care services to AFC members for which MassHealth’s regulations prohibit them from billing.”

The findings come on the heels of a July audit that flagged similar payment issues within the state Medicaid program. That audit found MassHealth sent a letter to providers indicating it would pay for group adult foster care services for residents of long-term care facilities, though its regulations also banned such payments.

The largest program in the state budget, MassHealth has more than 1.8 million members, about 27 percent of the state’s population.

MassHealth paid health care providers more than $13 billion in the 2015 fiscal year, about half of which was funded by the state, according to the July audit.

According to the audit, MassHealth inappropriately paid more than $15 million for adult foster care and group adult foster care services for members in long-term care facilities over a five-year period.

When MassHealth pays for both group adult foster care and long-term care, “it is in-effect paying for 26 hours of care each day,” as long-term care facilities provide 24-hour assistance, Bump said in a statement announcing the July audit.

MassHealth disagreed with Bump’s July findings, arguing that rest homes — which are not covered by Medicaid — should not have been included in the list of locations where “unallowable” group adult foster care services were provided. It agreed that up to $879,000 may have been paid for unallowable services over the audit period, but said a portion of that amount may be attributed to allowable medical leave of absence and short-term alternative placement days.

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