MassHealth's pricey toilet seats
MASSHEALTH, the state agency that administers healthcare services for low-income residents, didn't go so far as to pay $600 for a toilet seat, as the Department of Defense has infamously done. MassHealth gets the job done for about $60. But that's still grossly inflated, according to a recent report by state Auditor Joseph DeNucci. The state's fiscal health, as well as that of its poorest residents, requires close attention by MassHealth, especially given the state's looming budget deficit.
For the 12-month period ending in June 2007, the state paid about $12 million in excessive or questionable reimbursements for medical equipment, according to the auditor. These include $4.9 million in potentially fraudulent payments to medical suppliers, along with lost savings opportunities of roughly $7 million.
State auditors sampled 189 paid claims and found 17 lacked adequate documentation for proof of delivery or medical necessity. The authors also compared the prices for medical equipment - ranging from diapers to liquid oxygen systems - with those paid by Medicaid administrators in New York. Bay State taxpayers would see a 17.7 percent savings on medical goods if MassHealth could cut a deal like New York's.
Keeping track of durable medical equipment would seem to be among the $8 billion Medicaid system's more manageable challenges. About 150 vendors provide about $45 million annually in medical equipment to Medicaid recipients. Each of those claims must be supported by adequate documentation. The laxness on the part of some vendors should spur MassHealth to do more on-site inspections in addition to the so-called "desk audits" it now uses for proof of delivery.
Tom Dehner, the state's Medicaid director, insists that none of the cases in DeNucci's sample involved fraud. He and the auditor's office disagree sharply on whether the vendors' claims were properly supported and authorized. But Dehner agrees that MassHealth should reexamine costs in light of the New York comparison. Some of the cost differential, he says, may be explained by volume buying, training support, or New York's system of managed-care providers. But that doesn't explain why MassHealth pays $60.76 for a raised toilet seat while New York pays $20.99.
Other purchases are even harder to explain. MassHealth pays vendors $30.81 for 50 blood glucose tests or reagent strips. But the same product retails in local drugstores for $21.94. Taxpayers also pay Medicaid vendors 72 cents per ounce for lubricant. The same product costs 27 cents per ounce at the corner store, according to the state auditor's report.
MassHealth needs to gain control over its slippery vendors. 