Auditor Bump Finds $15 Million in ‘Inappropriate’ MassHealth Payments

The state's Medicaid program created its own loophole, Bump says.

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State Auditor Suzanne Bump. Courtesy Photo

MassHealth made more than $15 million in “inappropriate” payments for services explicitly excluded in its own guidelines across a five-year span, State Auditor Suzanne Bump’s office announced Thursday.

The state’s Medicaid program paid $15,201,854 for adult foster care (AFC) and group adult foster care (GAFC) services for members in long-term care facilities, or rest homes. MassHealth typically foots the bill for AFC and GAFC services instead of long-term care facilities, which can run costly.

The audit found that MassHealth told members in 2013—despite its own guidelines expressly prohibiting such payments—it would cover GAFC services for those in long-term care facilities until a new set of regulations is enacted. Three years have passed, and no new regulations are in place.

“Essentially, MassHealth created and sustained a loophole that allowed GAFC providers to receive inappropriate payments,” Bump said in a release. “When MassHealth pays for GAFC and long-term care services for a single member, it is in-effect, paying for 26 hours of care each day for that member. MassHealth, like all state agencies, must have consistent regulations that guide how their programs should operate and how funds can be spent.”

According to the audit, 80 percent of these payments were made to seven GAFC providers at 20 rest homes. One owner of a GAFC provider received more than $1.3 million in MassHealth payments for members residing in a rest home he also owned, Bump’s office said.

“At a time where the state faces an uncertain fiscal future, and policymakers and other agencies are finding ways to do more with less, this audit shows another instance of MassHealth failing to put proper controls in place to ensure they’re spending funds with integrity and accountability,” Bump said. “MassHealth owes it to the residents of the Commonwealth to address these systemic problems.”

In May, Bump’s office found that the Massachusetts Retirement Board had paid nearly $700,000 to dead pensioners, and short-changed living pensioners whose designated beneficiaries had died by more than more than $271,000.