2010-1374-3C INTRODUCTION AND SUMMARY OF FINDINGS AND RECOMMENDATIONS
INTRODUCTION AND SUMMARY OF FINDINGS AND RECOMMENDATIONS
This audit concerns public healthcare costs being borne by the Commonwealth’s Medicaid programthat is administered in Massachusetts by an agency within the state’s Executive Office of Health andHuman Services (EOHHS) called MassHealth. MassHealth provides access to healthcare services toapproximately 1.3 million eligible low- and moderate-income individuals, couples, and familiesannually. Expenditures in this program have been increasing significantly (on average, 8.69% peryear since 2007), while enrollment between June 2006 to March 2011 grew by over 26%. In fiscalyear 2011, MassHealth paid in excess of $12.2 billion to healthcare providers, of whichapproximately 35% was funded with Commonwealth funds.Healthcare is the subject of significant public debate in terms of who should be covered; how tocontrol increasing costs; and, in the case of publicly funded healthcare, how to prevent abuses of taxpayer dollars. The effectiveness of the policy decisions and the internal controls that MassHealthestablishes over its eligibility determination process are essential in addressing these concerns andmaintaining the public’s confidence in the integrity of the administration of MassHealth programs. The Office of the State Auditor (OSA) initiated an audit of MassHealth’s eligibility determinationprocess to (1) assess the adequacy of the policies and internal controls MassHealth has establishedrelative to this process and (2) if possible, identify opportunities for developing more effectivepolicies and internal controls aimed at ensuring that only eligible applicants receive benefits, whichcould result in savings to the Commonwealth’s taxpayers.
Highlight of Audit Findings
The process that MassHealth uses to verify the self-reported income ofapplicants/members is not consistent with state and federal regulations and needs tobe improved in order to ensure that only eligible individuals receive benefits.
MassHealth does not fully verify applicants’ self-reported earned income or attestation of no income either at the time of their application or on at least a quarterly basis once they are enrolled as required by MassHealth and federal regulations. In fact, the first attemptMassHealth makes to independently verify an applicant’s earned income is notperformed until approximately one year after the applicant is enrolled and receiving benefits.
Contrary to federal regulations, MassHealth does not request information about anapplicant’s unearned (non-wage) income (e.g., lottery winnings, dividends, interest,annuity and pension payments, rental income) from the Internal Revenue Service (IRS)or other independent sources. As a result, MassHealth cannot ensure that it isidentifying, to the extent possible, each applicant’s unearned income. In fact, we foundthat during our audit period at least 18 MassHealth members had annual lottery winningsranging from $8,977 to $159,987 and had no interruption in their MassHealth coverage.