Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Targeted Case Management Services Rendered by the Massachusetts Department of Social Services During Federal Fiscal Years 2002 and 2003," (A-01-04-00006)

May 19, 2006

Complete Text of Report is available in PDF format (2.46 mb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


Our objective was to determine whether the Massachusetts Office of Medicaid (the State agency) claimed allowable Medicaid targeted case management (TCM) services rendered by Department of Social Services (Social Services) during Federal fiscal years (FYs) 2002 and 2003.  The State agency claimed unallowable Medicaid TCM services rendered by Social Services.  The Social Services TCM monthly rates charged to Medicaid included social workers’ salary costs related to direct social services, such as child protection and welfare services.  Eliminating these unallowable costs from the calculation of the monthly rates, we determined that the costs of TCM services claimed through the State agency were overstated by $171,147,058 ($86,645,347 Federal share).  We were unable to express an opinion on the remaining $26,571,177 ($13,460,989 Federal share) that related to the assessment of beneficiaries’ service needs, development of a specific care plan, referral to needed services, and monitoring and followup.  Although these services may appear to constitute allowable TCM services under existing policy, our audit work identified a significant risk that the services may have already been reimbursed under other Federal programs.

We recommended that the State agency: (1) refund to the Federal Government $86,645,347 in unallowable costs; (2) work with CMS to determine the allowability of the $26,571,177 ($13,460,989 Federal share) on which we were unable to express an opinion; (3) refund to the Federal Government any TCM costs claimed and reimbursed subsequent to our audit period that represent direct medical, educational, or social services; and (4) establish procedures to ensure that TCM rates used to claim Medicaid reimbursement do not include payment for direct medical, educational, or social services to which the Medicaid-eligible individual has been referred.  In its comments on our draft report, the State agency disagreed with our findings and recommendations.