MEDICAID IMPROPER PAYMENTS REACH $86.49 BILLION

Medicaid is the single largest payer of health care in the country. As the program has increased in size and scope, it has dealt with fraud, waste, abuse, and improper payments. Over the years, there have been several federal initiatives to rein in costs; nevertheless, Medicaid has remained on the GAO's High-Risk List since 2003. Last month, CMS reported on fiscal year 2020 Medicaid estimated improper payments.

CMS recently announced, "the FY 2020 national Medicaid improper payment rate estimate is 21.36 percent, representing $86.49 billion in improper payments." Improper payments in the Medicaid program now account for more than twenty percent of federal Medicaid expenditures and one out of every four Medicaid dollars is spent improperly.

CMS estimated FY 2020 Medicaid improper payments with the PERM program by examining claims submitted between July 1, 2018 and June 30, 2019. They noted that the 2020 estimates are not comparable to previous years due to the reintegration of the PERM eligibility component. In the most recent report period, adjustments were made to include ACA requirements. The report revealed that eligibility errors are driving Medicaid improper payments. In many cases, program recipients are ineligible either because of their income or they are not lawful residents. The report cited the following as the primary contributors to the rise in improper payments:

• Eligibility errors from insufficient documentation to confirm eligibility determinations and non-compliance with redetermination requirements.
• Non-compliance with provider revalidation of enrollment and rescreening.
• Non-compliance with provider enrollment, screening, and NPI criteria.

While reporting on improper payments brings the problem into focus, it does nothing to mitigate them. States and Medicaid plans must find ways to strengthen program oversight to minimize payments made in error.

It is important to note that improper payment rates are not necessarily indicative of fraud. Actually, many improper payments are the result of low quality data and outdated methodologies. This is evident when states attempt to coordinate benefits but struggle to identify liable third parties of pharmacy and medical claims. Currently, the majority of the data that states access for TPL discovery is not current, available, complete, or correct. Without reliable, complete, and accurate data, Medicaid plans cannot help but make claims payments in error.

Syrtis Solutions (Syrtis) saw the need for a remedy to reduce the improper payment rate within the Medicaid program. Syrtis is unique in that it uses e-prescribing eligibility data to provide the payer of last resort market with a technology-based solution to prospectively cost avoid pharmacy and medical claims. By implementing ProTPL, Medicaid plans can maximize the efficiency of their adjudication processes while saving valuable resources.

Millions of Americans are looking to Medicaid for health care because of the pandemic driven recession. Simultaneously, improper payments are costing the program billions of dollars when resources are needed most. Moving forward, accurately identifying claims before they are paid, and cost avoidance measures will be critical steps to maximizing program efficiency.

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