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The US Department of Health and Human Services, Office of Inspector General (OIG) recently transmitted a memorandum to the Center for Medicaid and CHIP Services detailing the findings of the Massachusetts state auditor's report on the commonwealth’s controls around dual-eligible hospice patients and weaknesses related to election statements and potential MassHealth overpayments for curative items and services related to hospice patients that should have been covered by the hospices.

Many hospice patients are dually eligible—that is, they are both Medicare beneficiaries and eligible for assistance under the Medicaid program. In states that offer a Medicaid hospice benefit, dually eligible beneficiaries must elect the benefit under both the Medicare and Medicaid programs simultaneously. According to the Medicare Benefit Policy Manual, “Whenever Medicaid is involved, the hospice sends a copy of the election form to the State Medicaid Agency at the time of election, and also notifies this agency when the patient is no longer receiving hospice care.”

Based on its analysis, the state auditor identified approximately $56.6 million in claim payments at risk of being improper on account of Medicaid payment for certain items or services that should have been paid for by the hospices. Of the 400 claims in the sample, the audit found that MassHealth did not have accurate information in its Medicaid Management Information System (MMIS) about dual-eligible members who chose to receive hospice services for 56% of the claims. As a result, the state auditor concluded that either MassHealth did not receive the member’s hospice election form, or MassHealth received the election form but did not update MMIS to show that the member elected the hospice benefit. Indeed, the audit found many hospice providers were unaware that they were required to send MassHealth an election form for all dual-eligible members when it was received.

The state auditor recommended that MassHealth establish an effective monitoring process to ensure that hospice providers send an election form for every dual-eligible member who chooses to receive hospice services and coordinate professional services with non-hospice providers for dual-eligible members. One broader implication for this Massachusetts audit is that other states may follow in its footsteps and there may be greater focus and scrutiny on billings to Medicaid for dual-eligible hospice patients for any items or services related to the patients’ terminal illnesses.