Massachusetts Generally Implemented Recommendations From Prior Review of Claims for Hospital Outpatient Clinical Laboratory Services

The Massachusetts Executive Office of Health and Human Services, Office of Medicaid (State agency) implemented the first recommendation from our prior audit. Specifically, the State made an adjustment on its next quarterly report of expenditures for $8.2 million ($4.1 million Federal share). In general, the State agency implemented our prior audit's second recommendation to ensure that amounts claimed for laboratory services and submitted for Federal reimbursement do not exceed the Medicare fee schedule amounts. However, for a small number of services the State agency paid hospital providers more than the payment amounts in the Medicare fee schedule. As a result, the Federal reimbursement claimed by the State agency exceeded the rates allowed by Federal and State requirements by $1,095,000 ($617,000 Federal share).

The Medicaid overpayments occurred because the State agency occasionally did not follow its existing policies and procedures to ensure that the amounts claimed for hospital outpatient clinical laboratory services and submitted for Federal reimbursement did not exceed the Medicare fee schedule amounts.

We recommended that the State agency (1) refund $617,000 to the Federal Government and (2) follow its existing policies and procedures to ensure that the amounts claimed for hospital outpatient clinical laboratory services and submitted for Federal reimbursement do not exceed the Medicare fee schedule amounts.