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.
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