MassHealth may be losing money on imaging, auditor says

Massachusetts' Medicaid program could be losing millions of dollars on potentially unnecessary imaging tests and by paying more than Medicare, according to a report released by the state auditor today.

Auditor Joseph DeNucci said dramatic increases in the use of sophisticated radiology services over the last 10 years could be inflated by a practice called self-referral, in which doctors send patients to get CT scans or MRIs they may not need at facilities where the doctors have a financial interest. Self-referral by doctors treating Medicare patients is limited by a federal law, but state law does not regulate it for Medicaid patients.

In fiscal year 2009, the state's Medicaid program, known as MassHealth, paid more than $30 million on 582,000 claims for advanced imaging services.

“We have made great medical advances through the use of advanced imaging services in recent years, but the increase in the use of these services could leave our Medicaid program vulnerable to charges for unnecessary services,” DeNucci said in statement issued with the report.

The state's reimbursement rate for imaging -- the amount paid to the facility performing the MRI, CT scan, or other test for MassHealth patients -- is higher than the rate paid by the federal government for Medicare patients. The state could have saved more than $8.5 million from fiscal 2007 through 2009 if MassHealth rates were the same as Medicare rates for people covered by both programs, the report said.

Medicare is a federal insurance program covering people over 65 and some younger people with certain disabilities; Medicaid is a program run by states that covers people of low income, children, and people with certain disabilities. About 230,000 people in Massachusetts have both forms of public insurance.