MILLIONS SPENT ON DUPLICATE MEDICAID ENROLLMENTS

 

A recent audit by the Washington State Auditor's Office revealed that Washington state is overspending on Medicaid premiums-- an estimated $8.6 million on an annual basis-- due to plan members being enrolled in Medicaid in multiple states. The audit focused on seven states but indicated that the financial impact from duplicate Medicaid enrollments is most likely even higher nationwide.

In 2023, the total Medicaid expenditure across the United States reached $880 billion. Among the states with the highest spending on individuals enrolled in Medicaid across multiple states, California topped the list at $134 million, followed by Washington at $65 million.

Duplicate Medicaid payments occur when an individual is simultaneously enrolled in more than one state Medicaid programs. Duplicate enrollments normally occur when program beneficiaries relocate or do not have stable housing. In Oregon, for example, those with simultaneous Medicaid enrollments were found to be twice as likely to be experiencing homelessness compared to the general Medicaid population in Washington.

When beneficiaries are enrolled in more than one state's Medicaid system, the government improperly pays for their coverage multiple times-- without providing any extra benefits. Between 2019 and 2022, Oregon alone spent $445 million on Medicaid payments for duplicate enrollees. A report from Oregon's state auditors found that roughly 3% of Medicaid recipients in the state were also registered in another state's program.

The problematic data tracking system used to detect duplicate enrollments is a considerable hurdle in correcting this issue. The Social Security Administration's records are at times incorrect, making it troublesome for state agencies to pinpoint persons enrolled in multiple programs. Dealing with this issue requires both internal and external improvements. Internally, Washington's Auditor's Office advises that the Health Care Authority and the Department of Social and Health Services enhance communication to better track people who may have moved out of state. If someone leaves a state-run program due to relocation, that information should be shared across relevant agencies to prevent continued Medicaid enrollment in Washington. Externally, stronger coordination between states is necessary. Since individuals who enroll in multiple Medicaid programs often transfer to neighboring states, it would be beneficial for state agencies to work together and cross-check enrollment records. Washington and Oregon have settled on a strategy that includes efforts to reclaim funds spent on duplicate enrollments, partnering with the U.S. Treasury to launch a pilot program, implementing national data verification methods, and obtaining funding for additional staff dedicated to data matching.

One of the most useful data-driven solutions for determining active other coverage in the Medicaid program has emerged from the private sector. Syrtis Solutions (Syrtis) has launched a technology-based solution to aid the program in identifying third party liability (TPL) before medical and Rx claims are paid improperly. With the help of Syrtis Solutions and their proprietary ePrescribing data, Medicaid plans can now identify other coverage on utilizing members in real-time. Consequently, plans can avoid duplicate payments and other improper payments.

Medicaid and other taxpayer-funded programs need greater efficiency, quality data, and stringent oversight to protect program resources from duplicate payments and other improper payments. Duplicate Medicaid enrollments drain program resources, and with Washington alone incurring a $8.6 million cost, critical action is needed to stop further waste and ensure that program dollars are used to help the nation's most vulnerable populations.

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ADDRESSING IMPROPER PAYMENTS WITH A DATA-DRIVEN SOLUTION

 

The reported government-wide improper payment rate of 3.97% in 2024 represents the lowest level in over ten years. But below the surface lies a complicated reality that exposes systemic flaws in how improper payments are measured and controlled. These numbers, far from representing legitimate progress, highlight the important need for significant reform and solutions.

What Exactly Is The Improper Payment Rate?

Improper payment rates are often used as a headline metric to signal success or failure. Yet these rates, calculated as a percentage of total spending, tell only a part of the story. A declining rate does not always mean less improper payments; it could simply reflect a surge in spending that outpaces the growth of improper payments. For example, out of the 46 federal programs with consistent data for 2023 and 2024, only about half announced a reduction in improper payment rates. That being said, the picture changes when looking at the actual dollar amounts: two-thirds of these programs revealed increased improper payment totals. Some programs spent more but managed to mask these increases with lower rates, while others spent less and still saw improper payments rise. This disconnect highlights the limitations of relying on percentages alone.

Medicaid's Billion Dollar Problem

Medicaid's improper payment rate illustrates these difficulties well. In 2023, the program reported a rate of 8.6%, a figure already considered underestimated because of relaxed eligibility requirements during the COVID-19 pandemic. These policies temporarily reduced review, skewing the numbers.

By 2024, Medicaid's improper payment rate dropped drastically to 5.09%. However, this reduction had less to do with actual improvements and more with the methodology used by the Department of Health and Human Services. Medicaid calculates its improper payment rate using a rolling three-year average, meaning the impacts of temporary COVID-19 policies will continue to distort the numbers until at least 2025.

Addressing Medicaid's Improper Payments

To protect Medicaid from improper payments, several legislative initiatives have been made. While these steps have helped identify and report improper payments, they have done little to reduce them. Consequently, agencies expend substantial resources on reporting requirements that do little to address the root causes of improper payments. This process-driven mindset diverts attention from proactive, data-driven solutions that could make a real difference. Moreover, the repercussions of improper payments extend beyond mere monetary loss. They hinder access to quality care for beneficiaries, diverting resources from legitimate medical services and interventions. Patients may encounter barriers to receiving necessary treatments, while providers face increased scrutiny and regulatory burdens. Moreover, the broader healthcare system bears the brunt of these inefficiencies, grappling with rising costs and diminished effectiveness.

One of the most effective data-driven solutions for combating Medicaid's improper payments has emerged from the private sector. Syrtis Solutions ( Syrtis) has introduced a technology-based solution to aid the program in detecting third party liability (TPL) before medical and pharmacy claims are paid improperly. Syrtis discovered that Medicaid's conventional TPL discovery processes' are primarily retrospective and fail to capture 13.4% of individuals who have unreported primary commercial coverage. Because of this, Medicaid loses billions in improper claims payments; consequently, inefficient post-payment recovery processes are used to recoup the improper payments. To make matters worse, these post-payment recovery efforts only recoup less than $0.20 on the dollar. With the help of Syrtis Solutions and their proprietary ePrescribing data, Medicaid plans are now able to cost avoid pharmacy and medical claims on the front end and significantly reduce improper payments.

A Smarter Way Forward

Improper payments are costing Medicaid and other programs billions of dollars annually. By adopting data-driven solutions, federal government programs can move from compliance-focused reporting processes to proactive strategies that improve efficiency and integrity. This approach will help streamline operations, ensure accountability, and strengthen public trust in the government's ability to safeguard taxpayer funds.

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NOVEMBER MEDICAID ROUNDUP

 

Syrtis Solutions issues a monthly Medicaid news recap to help you stay informed. The monthly summary focuses on developments, analysis, and legislation that relates to Medicaid integrity, cost avoidance, coordination of benefits, third party liability, improper payments, fraud, waste, and abuse. Here is a list of last month's significant Medicaid news.

Read the news. 

MEDICAID PAYMENT INTEGRITY: ADDRESSING IMPROPER PAYMENTS

 

Improper payments and fraud continue to be chronic and costly difficulties for Medicaid and other government-funded programs. The GAO defines improper payments as payments that should not have been made or that were made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements. According to the GAO, the federal government loses between $233 billion and $521 billion annually to fraud alone.

Since FY 2003, executive branch agencies have reported increasing improper payment estimates totaling approximately $2.7 trillion. In fiscal year 2023 alone, federal agencies reported $236 billion in improper payments across 71 programs. While the FY 2023 estimate represents an $11 billion downturn from the previous year, this reduction is credited to temporary flexibilities granted during the COVID-19 PHE. These measures, such as relaxed eligibility requirements for Medicaid beneficiaries and providers, minimized instances of improper payments under the altered criteria.

Medicaid's High-Risk Status

Medicaid has been on the GAO's High-Risk List since 2003 due to vulnerabilities in payment integrity. In FY 2023 alone, HHS estimated that Medicaid improper payments totaled $50 billion. According to HHS, the leading contributors to these payments are missing or insufficient documentation, particularly in validating beneficiary eligibility and payments to ineligible beneficiaries or ineligible services.

Actions and Legislative Efforts to Reduce Improper Payments:

CMS has made some progress in identifying these susceptibilities. For instance, CMS collaborated with states and audit contractors to improve oversight of healthcare companies contracted to manage healthcare services for Medicaid beneficiaries. Investigations rose from 16 between 2016 and 2018 to 893 between 2019 and 2021, uncovering significant overpayments.

Over time, several legislative efforts have been aimed at curbing fraud, waste, and abuse. Despite these pieces of legislation, Medicaid continues to lose billions of dollars because of payments made in error. The measures directed by the legislation are costly and primarily revolve around compliance and reporting rather than reducing improper payments.

Remaining Challenges:

The GAO identified several areas for improvement, including:

Provider Screening and Enrollment Requirements

The GAO suggested CMS review state compliance with screening and enrollment requirements and monitor noncompliance yearly. While CMS has provided technical assistance, further action is needed to assess and address all states' compliance.

Medical Reviews for Improper Payments

The GAO advised CMS to strengthen Medicaid's medical review processes to identify the root causes of improper payments and implement corrective actions. As of March 2024, HHS disagreed with this recommendation and does not plan to implement it.

Compliance with the Payment Integrity Information Act of 2019 

Medicaid was deemed compliant with PIIA criteria in FY 2023. However, it was not fully compliant in fiscal years 2021 and 2022.


Considerable gaps remain in addressing improper payments and fraud. By fully implementing GAO recommendations and enhancing oversight, federal agencies and programs like Medicaid can better safeguard taxpayer dollars, reduce waste, and improve operational efficiency. Nevertheless, to prevent improper payment rates from rising even more, agencies should look to innovate data solutions to identify and prevent fraud, waste, and abuse.

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MEDICAID NEWS IN OCTOBER

 

Syrtis Solutions distributes a monthly Medicaid news summary to help you stay informed. The monthly summary concentrates on developments, analysis, and legislation that pertains to Medicaid integrity, cost avoidance, coordination of benefits, third party liability, improper payments, fraud, waste, and abuse. Here is a summary of last month's important Medicaid news.

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ACAP RECOGNIZES SYRTIS SOLUTIONS AS A PREFERRED VENDOR

Syrtis Solutions, a leading provider of real-time Other Health Insurance (OHI) coverage information for payers of last resort, just recently accomplished a significant milestone by being identified as a preferred vendor for the Association for Community Affiliated Plans (ACAP). This designation is a reflection of Syrtis Solutions' commitment to decreasing costs and improving operational efficiency for government-funded health plans.

The Significance of Cost Avoidance in Medicaid

The Medicaid landscape is complex and continually evolving, with state and federal guidelines mandating strict cost-control measures to protect the program's sustainability. One of the fundamental methods for managing costs in Medicaid programs is avoiding improper claims payments, which involves identifying third-party liability (TPL) and ensuring that Medicaid is the payer of last resort.

Without effective cost avoidance tools, Medicaid programs can suffer from unnecessary expenditures, driving up costs and redirecting resources away from other vital healthcare needs. This is where Syrtis Solutions has been making a significant impact.

Syrtis Solutions: Pioneers in Real-Time Cost Avoidance

Founded in 2008, Syrtis Solutions has been at the forefront of developing innovative solutions to deal with the challenges of OHI identification and cost avoidance. Their flagship product, ProTPL, is a real-time pharmacy cost avoidance solution that provides Medicaid and other government-funded health plans with immediate access to actionable data. By quickly identifying whether a member has other insurance coverage, ProTPL helps plans avoid paying for claims that should be covered by a liable third-party payer. This not only helps Medicaid plans comply with federal regulations but also significantly reduces the time and effort required to manually identify third-party insurers and recover costs retroactively.

What It Means To Be An ACAP Preferred Vendor

ACAP is a national trade association that represents 78 nonprofit Safety Net Health Plans, covering more than 25 million individuals through Medicaid, Medicare, and other public health programs. ACAP's Preferred Vendor program is designed to spotlight companies that offer valuable services to member health plans and have a proven track record of improving the quality and efficiency of care.

By becoming an ACAP Preferred Vendor, Syrtis Solutions has joined an elite group of companies that have exhibited a strong commitment to serving community health plans. This designation demonstrates Syrtis Solutions' expertise and reliability in the Medicaid space, as well as its dedication to helping ACAP member plans improve cost-avoidance efforts.

Looking Ahead

As healthcare costs continue to increase and Medicaid plans face increasing pressure to control expenditures, the role of payment integrity will only grow in importance. With its newly cemented status as an ACAP Preferred Vendor, Syrtis Solutions is well-positioned to help all payers of last resort maneuver these challenges, making certain that limited healthcare dollars are used efficiently and effectively.

Syrtis Solutions' innovative real-time cost avoidance technology, combined with its proven expertise, offers an essential resource for Medicaid plans seeking to enhance their operational efficiency and reduce unnecessary spending. This partnership marks a significant step forward in improving Medicaid cost management and patient care across the country.

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SEPTEMBER MEDICAID NEWS ROUNDUP

 

Syrtis Solutions publishes a monthly Medicaid news recap to help you stay informed. The monthly summary highlights developments, research, and legislation that relates to Medicaid program integrity, cost avoidance, coordination of benefits, third party liability, improper payments, fraud, waste, and abuse. Below is a summary of last month's important Medicaid news.

Read here.