PREVENTION OF IMPROPER PAYMENTS

Of the $4 trillion spent by the government in 2017, nearly $141 billion were improper payments. These are payments made in error either to the wrong beneficiary, in the incorrect amount, or for a service that is not legitimate. Fraud, antiquated data systems, and methodologies all lead to this wasteful spending.

Earlier in the year, the Trump administration released their efforts to address the problem with the CAP Goal Action Plan, Getting Payments Right. The plan takes a cross-agency approach to reduce the cost related to improper payments while at the same time improving the efficiencies of government programs.

PREVENTION

For starters, the CAP emphasizes incorporating preventative measures in order to reduce improper payments before there is ever a need for post-payment recovery. Recovery initiatives are largely ineffective and agencies generally recover much less than what was originally paid.

STRENGTHENING PARTNERSHIP 

The plan also noted the importance of bolstering partnerships between states and federal agencies to decrease improper payments made by federally funded state-administered programs. Currently, states have access to federal databases for data matching and analytics in order to prevent and identify improper payments. However, much of the data is not current, complete, or accurate. The CAP directs agencies to identify state agency partners that will help in screening and determining eligibility before payments are made.

Medicaid is one of the major government programs that deals with improper payments. While fraud does take place within the program, it isn't the primary contributor to improper payments. The problem Medicaid faces is that eligibility data is housed in massive data repositories, and that data is largely stale, old, and unusable. In order to provide the program with improved data, CMS is trying to develop the Transformed Medicaid Statistical Information System (T-MSIS), however it is years away from completion.

COST AVOIDANCE AND IMPROPER PAYMENTS

In addition to the Trump administration and CMS efforts to deal with improper payments, there is also progress being made in the private sector. Syrtis Solutions (Syrtis) recognized the need for a solution to reduce wasteful spending within Medicaid. The company takes advantage of e-prescribing data to provide the payer of last resort market with technology-based solutions to prospectively cost avoid pharmacy claims and increase medical cost recovery. Medicaid plans that employ the tool can optimize the efficiency of their adjudication processes while conserving valuable resources.

Based on the administration's plan, efforts from CMS and the private sector, it is obvious that the most effective way to battle improper payments is with prevention. Properly identifying claims before they are paid and cost avoidance measures will be vital steps to maximizing program efficiency. In addition, improving the quality of data used to identify claims will be paramount.

Improper payments have cost the government and it's taxpayers billions of dollars. While a few of these payments are fraudulent, the vast majority are a result of poor quality data and out-of-date methodologies. Moving forward, it will be important for agencies and states to utilize new technologies in order to improve efficiency.

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