Massachusetts Medicaid (MassHealth) Fraud: Enforcement and Detection

MassHealth, the Massachusetts Medicaid program, is focusing more on detecting, penalizing and preventing fraud in billing.  This is underscored by a September 6, 2013 announcement from the Office of the Attorney General concerning a $1.6 million settlement with AllCare Pharmacy (“AllCare”), which is based in Worcester.  AllCare allegedly violated MassHealth regulations by automatically refilling prescription medications without a specific request to do so by a patient.  The actions allegedly occurred from October 2008 through July 2012.  Mass Health regulations state that pharmacies cannot refill a prescription, unless a patient or caregiver requests each refill.

The Massachusetts Executive Office of Health and Human Services also announced a new “predictive modeling system” that is design to detect and prevent fraud on a real-time basis.  The software system mirrors a similar effort undertaken on the federal level to catch and stop Medicare fraud before money is paid out.  The goal is to shift away from the “pay and chase” model to stopping fraud, waste and abuse before it happens.  If a payment is never made, then the money remains in the program and the difficulty of retroactively identifying and recollecting does not arise.

The increased emphasis on fraud detection and enforcement in MassHealth echoes national activity on the Medicare and Medicaid fraud front that has been ongoing for the past few years.  With the emphasis on cost control and containment, it is necessary to avoid unnecessary expenditures and to cut out fraud and abuse.  The publicity and results are just a new development in Massachusetts.

The AllCare settlement and rollout of the predictive modeling system should put Massachusetts providers of all types on notice.  The Commonwealth is monitoring and looking for ways to save money.  Providers should evaluate their systems to reduce the risk of a problem arising.  Steps to take may include (a) testing internal billing systems to verify that appropriate documentation and support is present, (b) auditing coding procedures, and (c) reviewing compliance programs to determine if standards are in place that are expected by the government, whether it be Massachusetts or the federal level.

Proactively taking steps can save a provider from significant difficulties down the road should the government allege that an improper activity occurred.

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About Matt Fisher

Matt is the chair of Mirick O'Connell's Health Law Group and a partner in the firm's Business Group. Matt focuses his practice on health law and all areas of corporate transactions. Matt's health law practice includes advising clients with regulatory, fraud, abuse, and compliance issues. With regard to regulatory matters, Matt advises clients to ensure that contracts, agreements and other business arrangements meet both federal and state statutory and regulatory requirements. Matt's regulatory advice focuses on complying with requirements of the Stark Law, Anti-Kickback Statute, fraud and abuse regulations, licensing requirements and HIPAA. Matt also advises clients on compliance policies to develop appropriate monitoring and oversight of operations.
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