The CMS has seen an extraordinary surge in improper Medicaid payments and suggests the Affordable Care Act might be the reason. The Medicaid improper payment rate has vaulted from 5.8% or $14.4 billion in fiscal 2013 to 9.78% or $29.12 billion in fiscal 2015, according to an HHS financial review.
An improper payment might occur when funds go to the incorrect recipient, the Medicaid enrollee has other primary insurance coverage, information is not available to support a payment or the recipient uses funds in an inappropriate manner. The tally incorporates fraudulent claims but is by no means a measure of fraud.
In a post on the CMS blog, chief medical officer Dr. Patrick Conway notes, "When we talk about improper payments, it's important to remember what they are and why they happen. To be clear, improper payments are not typically fraudulent payments."
Dr. Conway goes on to explaining the jump, attributing the increase to challenges that state organizations are having with new provider enrollment and screening guidelines under the Affordable Care Act. Without having these new requirements, the Medicaid improper payment rate would have dropped to 5.1%, Conway said.
" We often see such increases when new requirements take effect, as states and providers often need time to modify their operations in order to comply with the updated standards," Conway said. "We believe, however, that these requirements will ultimately strengthen the Medicaid and CHIP programs, and that the improper payment rates will again decrease with state and provider experience."
So far, Medicaid Recovery Audit Contractors (RACs) are actually providing little assistance to states in recovering improper payments. States were obligated to employ Medicaid RAC programs by Jan. 1, 2012, under the Affordable Care Act. Recoveries amounted to $57.71 million in fiscal 2015, up slightly from $55.1 million in fiscal 2014, according to the review. The audit does not clarify why the RAC recoupment is so low, however, it does raise concerns as to why the emphasis remains on post-payment recovery versus the application of technological innovations to avoid paying claims in error.
Read more...
Monday, August 1, 2016
Thursday, June 23, 2016
Medicaid Improper Payment Rate Continues to Grow
Last month The house held a hearing regarding the growing number of improper payments in Medicare and Medicaid. The House oversight panel reviewed concerns regarding increasing improper payment rates discovered by federal oversight groups which include the Government Accountability Office (GAO) and the Health and Human Services Office of the Inspector General (HHS-OIG).
The key testimony came from Dr. Shantung Agrawal, CMS's Director of the Center for Program Integrity. Dr. Agrawal explained how CMS and the states were employing guidance from the GAO and HHS-OIG to reduce improper payments. He also discussed challenges with carrying out program integrity initiatives, particularly in the state Medicaid programs.
In 2005, CMS implemented the Medicare Recovery Audit Program, resulting in billions of dollars recovered for the Medicare Trust Fund. CMS has also implemented numerous other programs to identify and recover improper payments, including the Medicaid Integrity Program, Zone Program Integrity Contracts and a host of others. These programs are sizable and complex efforts, and although they have had certain success, the improper payment rate for Medicare and Medicaid continues to grow.
It's time that we stop throwing away tax dollars as a result of inefficiency and poor technology. CMS and state Medicaid agencies should focus their efforts on proactively avoiding improper payments, not on detecting liable primary payers after the improper payment is made and then attempting to recoup the wasted dollars after the fact (A systemic method known widely as "Pay & Chase"). The means to achieve this is by implementing prospective cost avoidance at the time claims arrive to the Medicaid plan, before any remittance is made. Technologies are actually currently obtainable that can stop paying on claims that are the liability of third party commercial payers, which account for 56% of Medicaid's improper payments. Prospectively identifying if a Medicaid recipient has primary coverage will effectively eliminate the necessity for post-payment recovery.
To this end, the program which gauges Medicaid improper payments and eligibility could be getting tougher in the future under a new rule proposed by CMS last Monday.
The measure would apply stipulations of the Affordable Care Act in the Payment Error Rate Measurement program, that generates improper payment rates accordinged to assessments of the fee-for-service, managed care and eligibility components of Medicaid. A major provision is that the task of performing PERM eligibility assessments would move to a state-supported federal contractor, rather than the current provision requiring states to administer their own eligibility reviews and document results to CMS.
States whose improper payment rates surpass 3% could face stricter Corrective Action Plans and potential payment reductions or disallowances under the proposed regulation. Monday's proposal likewise would transform the Medicaid Eligibility Quality Control program, a separate eligibility assessment program that obligates states to report the ratio of their improper payments for medical services compared with their total costs for medical services.
The aim is to "restructure" the program so it can help states decrease their eligibility improper payment rates, and more effectively complement PERM.
The agency is taking comments on the proposed rule through August 22. Click here to read the entire proposal in the Federal Register.
Read more here.
The key testimony came from Dr. Shantung Agrawal, CMS's Director of the Center for Program Integrity. Dr. Agrawal explained how CMS and the states were employing guidance from the GAO and HHS-OIG to reduce improper payments. He also discussed challenges with carrying out program integrity initiatives, particularly in the state Medicaid programs.
In 2005, CMS implemented the Medicare Recovery Audit Program, resulting in billions of dollars recovered for the Medicare Trust Fund. CMS has also implemented numerous other programs to identify and recover improper payments, including the Medicaid Integrity Program, Zone Program Integrity Contracts and a host of others. These programs are sizable and complex efforts, and although they have had certain success, the improper payment rate for Medicare and Medicaid continues to grow.
It's time that we stop throwing away tax dollars as a result of inefficiency and poor technology. CMS and state Medicaid agencies should focus their efforts on proactively avoiding improper payments, not on detecting liable primary payers after the improper payment is made and then attempting to recoup the wasted dollars after the fact (A systemic method known widely as "Pay & Chase"). The means to achieve this is by implementing prospective cost avoidance at the time claims arrive to the Medicaid plan, before any remittance is made. Technologies are actually currently obtainable that can stop paying on claims that are the liability of third party commercial payers, which account for 56% of Medicaid's improper payments. Prospectively identifying if a Medicaid recipient has primary coverage will effectively eliminate the necessity for post-payment recovery.
To this end, the program which gauges Medicaid improper payments and eligibility could be getting tougher in the future under a new rule proposed by CMS last Monday.
The measure would apply stipulations of the Affordable Care Act in the Payment Error Rate Measurement program, that generates improper payment rates accordinged to assessments of the fee-for-service, managed care and eligibility components of Medicaid. A major provision is that the task of performing PERM eligibility assessments would move to a state-supported federal contractor, rather than the current provision requiring states to administer their own eligibility reviews and document results to CMS.
States whose improper payment rates surpass 3% could face stricter Corrective Action Plans and potential payment reductions or disallowances under the proposed regulation. Monday's proposal likewise would transform the Medicaid Eligibility Quality Control program, a separate eligibility assessment program that obligates states to report the ratio of their improper payments for medical services compared with their total costs for medical services.
The aim is to "restructure" the program so it can help states decrease their eligibility improper payment rates, and more effectively complement PERM.
The agency is taking comments on the proposed rule through August 22. Click here to read the entire proposal in the Federal Register.
Read more here.
Tuesday, January 26, 2016
Trends is Medicaid Managed Care Spending
Federal spending for Medicaid managed care represented over one-third of the entire government Medicaid spending in 2014, according to a government report (GAO-16-77) released Jan. 19 that showcases exactly how states are progressively relying on managed care as they expand Medicaid coverage under the Affordable Care Act.
The Government Accountability Office report said federal spending on Medicaid managed care increased from $27 billion in fiscal year 2004 to $107 billion in FY 2014. Managed care as a percentage of total federal Medicaid spending was higher in seven of eight selected states in fiscal year 2014 compared with 2004, yet total and average per beneficiary payments by states to managed care organizations (MCOs) varied.
The importance of managed care in Medicaid-- under which states contract with MCOs to provide a specified group of programs-- has increased as states increase eligibility for Medicaid under the ACA and progressively move people with complicated health needs into managed care, the report said. States have flexibility inside broad federal guidelines to develop and execute their Medicaid programs, and as a result play a critical role in overseeing managed care.
Medicaid managed care plans serve some or all Medicaid enrollees in 39 states and DC, and more than half of all Medicaid beneficiaries obtain all or some of their care from risk-based managed care organizations.
Find out more at the Syrtis Blog...
The Government Accountability Office report said federal spending on Medicaid managed care increased from $27 billion in fiscal year 2004 to $107 billion in FY 2014. Managed care as a percentage of total federal Medicaid spending was higher in seven of eight selected states in fiscal year 2014 compared with 2004, yet total and average per beneficiary payments by states to managed care organizations (MCOs) varied.
The importance of managed care in Medicaid-- under which states contract with MCOs to provide a specified group of programs-- has increased as states increase eligibility for Medicaid under the ACA and progressively move people with complicated health needs into managed care, the report said. States have flexibility inside broad federal guidelines to develop and execute their Medicaid programs, and as a result play a critical role in overseeing managed care.
Medicaid managed care plans serve some or all Medicaid enrollees in 39 states and DC, and more than half of all Medicaid beneficiaries obtain all or some of their care from risk-based managed care organizations.
Find out more at the Syrtis Blog...
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