Audit finds MassHealth spent nearly $85 million on payments for out-of-state residents

BOSTON – Today, State Auditor Diana DiZoglio’s office released an audit of MassHealth as part of our ongoing independent statutory oversight of the state’s Medicaid program. Our audit determined that MassHealth made an estimated $84,832,094 in capitation payments to managed care organizations for individuals outside of Massachusetts. This audit reviewed the period of January 1, 2018, through September 30, 2021.

Capitation payments are per-person payments made to MCOs to coordinate health care for Medicaid recipients in Massachusetts. Our audit found that MassHealth did not take sufficient steps to ensure that Medicaid recipients resided in Massachusetts. As a result, MassHealth overpaid MCOs nearly $85 million to manage care for individuals residing out of state.

DiZoglio’s office recommends that MassHealth develop and implement policies and procedures regarding its data matches for member eligibility; specifically, MassHealth should require that members flagged as possibly not living in Massachusetts submit documentation to substantiate residency. MassHealth should also investigate and resolve all instances where data matches indicate a member is enrolled in another state’s Medicaid program.

“Our audits serve as a tool for state agencies to help ensure greater transparency, accountability, and equity,” said Auditor DiZoglio. “It is unacceptable that due to a lack of appropriate oversight by MassHealth, nearly $85 million in overpayments went to MCOs for out-of-state residents who were concurrently enrolled in another state’s healthcare program. Taxpayers deserve better, and I strongly urge MassHealth to adopt this audit’s recommendations.”