TEXAS JUDGE ORDERS THE ACA UNCONSTITUTIONAL

The future of the Affordable Care Act (ACA) is at risk after a federal district court judge ruled the law to be unconstitutional. On Friday, Judge Reed C. O'Connor (TX) sided with twenty Republican legislators and ruled the law unconstitutional after congress passed the December 2017 tax bill.

Last years tax bill removed the laws Individual Mandate that penalized taxpayers for failing to have healthcare coverage. Preceding the bill, the Supreme Court ruled in favor of the ACA due to the fact that the mandate was considered a tax and an appropriate power of the Congress. However, Judge O'Connor's position is that the law is no longer constitutional without the penalty.

According to Judge O'Connor, "The Court finds the Individual Mandate "is essential to" and inseverable from "the other provisions of" the ACA." Last week, the ruling was reached while most plans were approaching the close of open enrollment. Despite his order, enrollee's coverage should not be affected and a final decision will not likely be made until it reaches the Supreme Court. Up to this point, the Supreme Court has made two constitutional related rulings to the ACA and this will more than likely be the third.

Soon after, Attorney General Becerra and fifteen other Democrats vowed to appeal the ruling. Becerra stated, "Today's ruling is an assault on 133 million Americans with preexisting conditions, on the 20 million Americans who rely on the ACA for healthcare, and on America's faithful progress toward affordable healthcare for all Americans. The ACA has already survived more than 70 unsuccessful repeal attempts and withstood scrutiny in the Supreme Court. Today's misguided ruling will not deter us: our coalition will continue to fight in court for the health and wellbeing of all Americans."

Senate Minority Leader Chuck Schumer commented, "The ruling seems to be based on faulty legal reasoning and hopefully it will be overturned."

According to legal experts, this effort has very little chance of standing up in court and it will most likely be denied. If the order was supported in the Supreme Court, it would seriously affect the nation's health care system given that the ACA touches nearly every aspect of it.

Read more about Medicaid and the ACA here.

CMS ACHIEVES THE LOWEST IMPROPER PAYMENT RATE IN TEN YEARS

Medicare and Medicaid accounted for $40 billion dollars in improper payments in 2017 and the Medicaid program has been on the GAO's High Risk List since 2003 because of insufficient fiscal oversight. However, last month CMS announced that the agency achieved the lowest improper payment reduction rate for the programs in 8 years. This makes 2018 the second consecutive year that the rate has been below the 10% threshold following the compliance initiatives established in the Improper Payments Elimination and Recovery Act of 2010.

Leading up to this point, CMS has made a concentrated effort to decrease improper payments by focusing on claims identification, reporting, and technology solutions that address payment error vulnerabilities.

CMS Administrator Seema Verma said, "Our accomplishments over the past year were the result of a focused effort to target root causes of improper payments. CMS also implemented a targeted review strategy that focused on provider education, assistance and burden reduction. The agency's actions emphasized prevention-oriented activities."

Defining and understanding this wasteful spending is a prime focus for effective oversight according to the administrator. She recognizes that not all improper payments are fraud but that these payments fail to "meet statutory, regulatory, administrative or other legally applicable requirements."

CMS determined that the decreased rate was a consequence of their targeted review strategy that concentrates on provider education, assistance, burden reduction, and prevention activities that simplify and clarify policy. In addition, the agency also favors the implementation of innovative solutions from the private sector that will combat improper payments and assist Medicaid and Medicare providers.

In spite of the success, the agency is aiming to reduce the rate even further. Verma states, "While we have made progress on reducing the improper payments rate, we are not satisfied and more work needs to be done to achieve increased and consistent reductions in the future by implementing already existing initiatives as well as innovative processes."

HOW IMPROPER PAYMENTS OCCUR

The vast majority of improper payments result in government-funded health care systems as a result of antiquated data systems and methodologies. Specifically, the data employed by the federal government to detect overpayments and fraud is unreliable.

In 2012, HHS Regional Inspector General Ann Maxwell declared, "... much of the data used to identify improper payments and fraud is not current, available, complete, [or] accurate."

Throughout Medicaid, the coordination of benefits and ascertaining who is responsible for a claim is complicated. It demands timely data and the use of numerous data sources. Also, eligibility data is uncoordinated between federal and state systems and it is often not accurate.

PREVENTION OF IMPROPER PAYMENTS 

On a legislative level, Congress made efforts to remedy improper payments with the introduction of the Improper Payments Elimination and Recovery Improvement Act of 2012 and the Fraud Reduction and Data Analytics Act of 2015. Nevertheless, without reliable, complete, and accurate data, Medicaid will continue to make payments in error.

Additional initiatives to combat Medicaid's improper payments are developing from the private sector. Syrtis Solutions (Syrtis) has ushered a technology-based solution to assist the program in determining third party liability (TPL) before medical and pharmacy claims are paid improperly. Our company discovered that Medicaid's traditional 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 employed to recoup the improper payments. To make matters worse, these post-payment recovery initiatives only recover less than $0.20 on the dollar.

CMS's announcement in November was a notable achievement in light of the high rate of improper payments within government-funded programs. For the first time in history, improper payment reduction rates were reported for Medicare, Medicaid, and the Children's Health Insurance Program. While Congress and federal agencies are working to keep the momentum by implementing legislation and prevention activities, the private sector is also creating innovative solutions to minimize waste and help these programs operate more effectively.

Click here and learn more about Syrtis Solutions.