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.
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