NOVEMBER MEDICAID NEWS ROUNDUP

Syrtis Solutions sends out a monthly Medicaid news summary to help you stay informed. The monthly roundup concentrates on developments, analysis, and legislation that relates to Medicaid program integrity, cost avoidance, coordination of benefits, third party liability, improper payments, fraud, waste, and abuse. Here is a list of last month's significant Medicaid news.

Read more here. 

OCTOBER MEDICAID RECAP

 

Syrtis Solutions distributes a monthly Medicaid news roundup to help you stay informed. The monthly recap focuses on developments, analysis, and legislation that pertains to Medicaid program integrity, cost avoidance, coordination of benefits, third party liability, improper payments, fraud, waste, and abuse. Below is a summary of last month's significant Medicaid news.

Click and read more. 

$50.3 BILLION IN MEDICAID IMPROPER PAYMENTS

 

Medicaid improper payments have caused the healthcare program to be on the Government Accountability Office's High-Risk List since 2003. The GAO's list identifies government-funded programs that involve significant resources and offer important services to the public that are susceptible to fraud, waste, abuse, and mismanagement. For two decades, Medicaid and other CMS programs have struggled with these improper payments, and it's costing billions. A common misunderstanding is that Medicaid improper payments stem primarily from fraud when, actually, the vast majority arise from insufficient documentation and eligibility errors. CMS issued the following improper payments fact sheet for fiscal year 2023 this month.

Here are the improper payment rates for CMS’ programs in Fiscal Year 2023:

• The Medicare Fee-for-Service (FFS) estimated improper payment rate was 7.38%, or $31.2 billion, marking the seventh consecutive year this figure has been below the 10% threshold for compliance established by improper payment statutory requirements.[1] The 2023 rate is not statistically different from the 2022 Medicare FFS estimated improper payment rate of 7.46%.
• The Medicare Part C estimated improper payment rate was 6.01%, or $16.6 billion. CMS made significant methodology changes during the past two years’ reporting cycles (FY 2021 and FY 2022), and FY 2023 establishes a baseline; however, it is not statistically different from the 2022 estimated improper payment rate.
• The Medicare Part D estimated improper payment rate was 3.72%, or $3.4 billion. This estimated improper payment rate incorporates various methodology refinements. These comprehensive changes contributed to an increase in the FY 2023 estimated improper payment rate, and the rates for FY 2023 are not comparable to previous years.
• The Medicaid improper payment rate (comprised of reviews in 2021, 2022, and 2023) was 8.58%, or $50.3 billion, a significant decrease from the 2022 reported rate of 15.62%. Of the 2023 Medicaid improper payments, 82% were the result of insufficient documentation. These payments typically involve situations where a state or provider missed an administrative step and do not necessarily indicate fraud or abuse.
• The Children’s Health Insurance Program (CHIP) improper payment rate (comprised of reviews in 2021, 2022, and 2023) was 12.81%, or $2.1 billion, a substantial decrease from the 2022 rate of 26.75%. Of the 2023 CHIP improper payments, 68% were the result of insufficient documentation, which is generally not indicative of fraud or abuse.
• The improved performance in the national Medicaid and CHIP improper payment estimates reflect 1) reviews that accounted for certain flexibilities afforded to states during COVID-19, such as suspended eligibility determinations and reduced requirements around provider enrollment and revalidations, which were typically included in the PERM reviews prior to the COVID-19 PHE; and 2) improved state compliance with other program requirements. While it is unclear how much the decrease is attributable to the PHE flexibilities versus improved state compliance, it appears that the PHE flexibilities had an impact on lowering the rate. Please note that the data does not capture any effects of the PHE unwinding, as these will be included in future report periods.
• The 2023 improper payment rate for the Advance payment of the Premium Tax Credit (APTC) program for the Federally Facilitated Exchange (FFE) for Benefit Year 2021 (January 1 to December 31, 2021) was 0.58% or $272 million. CMS found that the FFE properly paid an estimated 99.42% of total outlays, or $46 billion, in Benefit Year 2021.

 

Learn more from the whitepaper "Improper Payments - Medicaid's Billion Dollar Problem"

 

What You Need to Know:

The Payment Integrity Information Act of 2019 defines significant improper payments as either:

(i) improper payments greater than $10 million and over 1.5% of all payments made under that program, or

(ii) improper payments greater than $100 million.

• The 2023 HHS Agency Financial Report provides the improper payment rates for the Medicare Fee-for-Service (FFS), Medicare Part C, Medicare Part D, Medicaid, Children’s Health Insurance Program (CHIP), and Affordable Care Act Health Insurance Exchange Advance payment of the Premium Tax Credit (APTC) programs.
  1. Insufficient documentation
  2. The documentation provided for the items or services billed did not sufficiently demonstrate medical necessity.
• The vast majority of improper payments occurred in situations where there was an unintentional payment error or a reviewer could not determine if a payment was proper because of insufficient payment documentation from a state, provider, or the FFE.
• While fraud and abuse are one cause of improper payments, not all improper payments represent fraud or abuse. Improper payment estimates are not fraud rate estimates.
• Improper payments can result from a variety of circumstances, including:
  • Items or services with no documentation.
  • Items or services with insufficient documentation.
  • Or, with respect to Medicaid, CHIP, and the FFE, no record of the required verification of an individual’s eligibility, such as income.
• Proper payments occur when there is sufficient documentation to support payment in accordance with the program payment requirements. Two examples of proper payments include:
  • Payments where CMS or the state appropriately maintained documentation of an eligibility verification requirement and appropriately determined eligibility based on program eligibility and payment requirements.
  • Payments where sufficient documentation was provided to support medical necessity in accordance with program payment requirements.

 

Improper Payment Measurements:

 

Medicare Fee-for-Service

• CMS developed the Comprehensive Error Rate Testing (CERT) program to estimate the Medicare Fee-for-Service (FFS) program improper payment rate.
  • The CERT program reviews a statistically valid stratified random sample of Medicare FFS claims to determine if they were paid properly under Medicare coverage, coding, and billing rules. If these criteria are not met, the claim is counted as an improper payment.
  • The majority of Medicare FFS improper payments fall into two categories:
    1. Insufficient documentation
    2. The documentation provided for the items or services billed did not sufficiently demonstrate medical necessity.

1. 1.  

Medicare Part C

• CMS estimates the Part C Medicare Advantage (MA) improper payments using the Part C Improper Payment Measure (IPM) methodology.
  • CMS calculates an annual capitated payment for each Medicare beneficiary enrolled in an MA Organization (MAO) based on diagnosis data previously submitted to CMS by the MAO. The diagnosis data are used to determine risk scores and calculate risk-adjusted payments to MAOs for their enrollees. Inaccurate or incomplete diagnosis data may result in improper payments made to MAOs.
  • CMS conducts the annual Part C IPM activity to estimate the improper payments for the Medicare Part C program due to unsubstantiated risk adjustment data.
  • Part C IPM reviews the medical record documentation for a statistically valid stratified random sample of Medicare Part C enrollees to ensure the diagnosis data used to determine payment to the MAO are present and in accordance with CMS rules and regulations.
• The majority of Part C improper payments fall into three categories:
  1. The MAO’s supporting documentation fails to substantiate the beneficiary diagnosis data submitted for payment
  2. Invalid documentation, such as illegible documentation.
  3. Missing documentation.

 

Medicare Part D

• CMS estimates the Part D Prescription Drug Benefit improper payments using the Part D IPM methodology.
  • The Medicare Part D IPM primarily focuses on analyzing Prescription Drug Events (PDEs). Each PDE record includes details about a specific prescription transaction, such as the drug prescribed, the quantity, and the associated costs. The PDE data are not the same as individual drug claim transactions but are summary extracts using CMS-defined standard fields.
• CMS conducts the annual Part D IPM activity to identify improper payments caused by invalid and/or inaccurate drug claims. These errors could lead to adjustments in beneficiaries’ benefit phases, reinsurance subsidy payments, and CMS payments. Drug claims selected for audit are evaluated using prescription record data and supporting documentation provided by the Part D Plan Sponsors.
• The Part D IPM reviews a statistically valid stratified random sample of PDEs to ensure the supporting documentation validates payment attributes and processing was in accordance with CMS rules and regulations.
• Part D improper payments fall into three major categories:
  1. Missing or invalid documentation, such as missing authorization.
  2. Drug discrepancies, such as the drug dispensed contains a different active ingredient than the drug prescribed.
  3. Drug pricing discrepancies.

 

Medicaid & Children’s Health Insurance Program (CHIP)

• CMS estimates Medicaid and CHIP improper payments using the Payment Error Rate Measurement (PERM) program.
  • The PERM program uses a three-year, 17-state rotation, meaning each state is reviewed once every three years, and each cycle measurement includes one-third of all states. The most recent three cycles (for 2023, that is, 2023, 2022, and 2021) are combined to form each year’s overall national rate.
  • PERM ensures a statistically valid random sample representative of all Medicaid and CHIP payments matched with federal funds.
  • Medicaid and CHIP improper payment data released by CMS are based on reviews of whether states are implementing their Medicaid program and CHIP in accordance with federal and state payment and eligibility policies.
  • The national Medicaid and CHIP improper payment rates are based on reviews of the FFS, managed care, and eligibility components of a state’s Medicaid and CHIP program in the year under review.
• In addition, the PERM program combines individual state component estimates to calculate the national component estimates. National component rates and the Medicaid and CHIP rates are weighted by state size, such that a state with a $10 billion program is weighted more in the national rate than a state with a $1 billion program.
• The majority of Medicaid and CHIP improper payment findings are the result of insufficient or missing documentation.

 

ACA Exchange Advance Payment of the Premium Tax Credit

• CMS estimates Advance payment of the Premium Tax Credit (APTC) improper payments using the Exchange Improper Payment Measurement (EIPM) program.
  • The EIPM program currently measures improper payments for the Federally Facilitated Exchange (FFE). The improper payment measurement methodology for State-based Exchanges is under development.
  • The EIPM program measures improper payments based on a statistically valid random sample representative of all health insurance applications with APTC payments processed by the FFE.
  • APTC improper payment estimates are based on reviews of the FFE compliance with requirements surrounding payment and eligibility determinations.
• The majority of APTC improper payments are tied to manual eligibility verifications.
• This year is the second year the EIPM program is reporting APTC improper payment information. CMS is reporting improper payment information for calendar year 2021 in the fiscal year 2023 HHS Agency Financial Report.
• The APTC program represents the first of two potential[2] payment streams for the overall Premium Tax Credit program. The second payment stream relates to additional Premium Tax Credit amounts claimed by taxpayers at the time of their tax filings, referred to as “Net Premium Tax Credits” (hereafter, “Net PTC”). That is, total Premium Tax Credit outlays (or credits) are equal to APTC payments plus Net PTC claims. The Internal Revenue Service (IRS) measures improper payments associated with Net PTC claims, and for Calendar Year 2021 reported[3] Net PTC claims of $1.97 billion, improper payments of $512.71 million, and an improper payment rate of 26.04%. The combined APTC and Net PTC improper payment estimate is $784.46 million out of $48.47 billion total Premium Tax Credit outlays/claims, or 1.62%. Treasury and HHS are reporting this combined error rate for the Premium Tax Credit program as a whole in both departments’ Agency Financial Reports.
  • State Medicaid Provider Screening and Enrollment Data and Tools: CMS shares Medicare data to assist states with meeting Medicaid screening and enrollment requirements. For instance, CMS shares the Medicare provider enrollment record via the Medicare Provider Enrollment, Chain, and Ownership System (PECOS) and offers a data compare service allowing states and territories to rely on Medicare’s provider screening in lieu of conducting a separate state screening, which is particularly helpful to states when conducting revalidation.
  • Enhanced Assistance on State Medicaid Provider Screening and Enrollment: CMS provides ongoing guidance, education, and outreach to states on federal requirements for Medicaid provider screening and enrollment. CMS also assesses provider screening and enrollment compliance, provides technical assistance, and offers states the opportunity to leverage Medicare screening and enrollment activities.

 

CMS/State Collaboration on Improper Payments:

• CMS collaborates with states in many ways to share information and help to ensure they maintain the proper documentation to demonstrate that payments are being made correctly. Examples include:
  • Medicaid Eligibility Quality Control (MEQC) Program: Under MEQC, states design and conduct pilots to evaluate the processes that determine an individual’s eligibility for Medicaid and CHIP benefits. States have flexibility in designing pilots to focus on vulnerable or error-prone areas as identified by the PERM program and state. The MEQC program also reviews eligibility determinations that are not reviewed under the PERM program, such as denials and terminations.
• Medicaid Integrity Institute (MII): CMS offers training, technical assistance, and support to state Medicaid program integrity officials through the MII. More information is located at the Medicaid Integrity Institute website.

More information on CMS’ Improper Payments Measurement Programs can be found at https://cms.gov/ImproperPayments.

To view the HHS Agency Financial Report, visit: http://hhs.gov/afr.

Click here to learn more. 

THIRD-PARTY LIABILITY CHALLENGES IN MEDICAID

 

Third-party liability, also known as TPL, is the legal requirement of third parties to pay part or all of the expenses for medical assistance under a Medicaid state plan. In other words, if a beneficiary has other forms of health insurance, those primary payers are required to pay their legal liability first, and Medicaid covers any remaining liability as the payer of last resort. This policy has been in place since the Employee Retirement Income Security Act changed the Social Security Act in 1974. However, state Medicaid agencies face ongoing difficulties in meeting TPL requirements, and it is costing the program billions of dollars every year.

This October, the OIG released an updated report that highlighted the particular problems states are encountering in meeting third-party liability requirements and in making sure that Medicaid functions as the payer of last resort. The OIG conducted its audit by sending surveys to Medicaid agency officials to determine how each state collects OHI, identifies TPL, processes claims with TPL, and reports TPL cost avoidance and recoveries. While there has been progress, the OIG's auditing initiatives show that billions of dollars are still at risk. Here is a summary of the report's findings and recommendations.

DIFFICULTIES THAT STATES FACE TO MEET TPL REQUIREMENTS

• According to States, the main challenges in their attempts to meet TPL requirements are related to:

• difficulties acquiring complete, accurate, and up-to-date coverage information from Medicaid enrollees and providers;

• difficulties obtaining timely and reliable coverage details from third parties;

• difficulties coordinating TPL with out-of-State third parties;

• technical issues linked to third-party coverage data received and electronic billing of Medicaid claims with third parties;

• a lack of Federal prompt payment requirements and penalties for third parties that do not cooperate with States' attempts to satisfy TPL requirements;

• difficulties with third parties that deny Medicaid claims for procedural reasons;

• difficulties coordinating TPL with TRICARE and;

• difficulties coordinating TPL with Medicare.

RECOMMENDATIONS TO ADDRESS THIRD-PARTY LIABILITY DIFFICULTIES

The OIG made the following recommendations to CMS to address TPL challenges:

• use the information we received from States about the obstacles they are still experiencing and develop an action plan for helping States more easily identify liable third parties and recover Medicaid payments;

• work with States, as appropriate, to encourage better cooperation from third parties that repeatedly resist States' TPL identification and recovery efforts;

• for the four States we identified as not having fully complied with the DRA's TPL provisions: (1) verify whether the States have since come into compliance and (2) pursue corrective actions for States that have not fully complied;

• verify whether Virginia has returned the $1.25 million Federal share of the Medicaid TPL collections underreported during two fiscal quarters and, if not, require Virginia to refund any remaining amount owed;

• provide guidance to States to assist them with developing processes that improve the reporting of Medicaid TPL amounts on the form 64.9 A;

• ensure that States have current instructions on completing the form 64.9 A;

• ensure that States correctly report TPL amounts on the form 64.9 A; and

• remove or disable lines from the form 64.9 A that States are supposed to leave blank.

MEDICAID PAYERS NEED EFFECTIVE TPL DATA SOLUTIONS

States' TPL difficulties emanate primarily from bad-quality data. Medicaid payers are unable to determine primary coverage on pharmacy and medical claims because the majority of data that they have access to is not current, available, complete, or accurate. As a result, Medicaid plans have no choice but to pay claims in error and then chase reimbursement once other primary health insurance coverage is found. To make matters even worse, the actual monies recovered from these improper payments remain around twenty cents on the dollar.

Without good quality data, Medicaid will not be able to overcome its TPL challenges, and the program will continue to lose billions in improper payments. Syrtis Solutions understood this, and in 2010, introduced ProTPL. Their solution was a real-time point-of-sale cost avoidance service for payers of last resort that provides powerful and accurate eligibility data that plans can act on. ProTPL gives payers of last resort the ability to cost avoid pharmacy and medical claims along with the associated costs of recovery. Syrtis Solutions identifies active health coverage that no other vendors can find by checking claims against the nation's largest and most comprehensive active healthcare coverage information database. Customers implementing ProTPL see an average twenty-five percent increase in OHI discovery. With ProTPL, Medicaid plans can save on claims that are the liability of other primary payers and effectively be the payer of last resort.

In July, Medicaid enrollment climbed to 84.5 million people. Due to the size of the program's population, Medicaid plans need to concentrate on innovative ways of identifying third-party liability, improving efficiency, and reducing costs. Presently, one of the best ways for Medicaid payers to do that is to adopt technology solutions like ProTPL, which will allow them to identify active third-party payers and satisfy TPL requirements.

Read more here. 

SEPTEMBER MEDICAID RECAP

 

Syrtis Solutions distributes a monthly Medicaid news summary to help you stay informed. The monthly summary highlights developments, analysis, and legislation that relates to Medicaid integrity, cost avoidance, coordination of benefits, third party liability, improper payments, fraud, waste, and abuse. Below is a list of last month's important Medicaid news.

See the news here. 

DO YOU KNOW HOW MUCH IMPROPER CLAIMS PAYMENTS ARE COSTING YOUR SMA OR MCO?

 

Improper claims payments cost Medicaid billions each year. A frequent misconception is that these payments stem from fraud and abuse. In truth, the vast majority stem from issues such as eligibility errors and outdated data systems. Don't miss out on this opportunity to receive a free quantitative claims analysis to see how much your organization can save by reducing improper claims payments.

See how you can save here!

JULY MEDICAID NEWS RECAP

 

Syrtis Solutions delivers a monthly Medicaid news summary to help you stay informed. The monthly summary focuses on developments, analysis, and legislation that relates to Medicaid program integrity, cost avoidance, coordination of benefits, third party liability, improper payments, fraud, waste, and abuse. Below is a summary of last month's significant Medicaid news. 

Click here to learn more. 

MEDICAID WORK REQUIREMENTS RETURN

 

In 2018, the Trump Administration and GOP made multiple attempts to reverse the ACA and establish federal spending caps on the Medicaid program to lower costs. These attempts were not successful; nonetheless, a number of states expanded their Medicaid programs and proposed work requirements during this time.

According to KFF, one out of five Americans receive health care through Medicaid. The program has become the country's largest source of health care coverage and accounts for 27% of state expenditures. Due to program expansion and costs, House Republicans renewed their push for work requirements over the spring during debt ceiling negotiations with Democrats. They also suggested expanding the work requirements for individuals receiving food and cash assistance through SNAP and TANF.

The Medicaid work requirement provision did not make it through negotiations; however, President Biden agreed to the expanded work requirements for food and cash support in exchange for a two-year suspension of the debt ceiling. Despite the outcome in Washington, some states are still pursuing work requirements for their Medicaid programs with special waivers. 

Even though Medicaid is a jointly funded government program between the federal government and states, the states are responsible for administering it, and the Social Security Act allows them the flexibility to customize their Medicaid programs through what are referred to as Section 1115 waivers. These waivers require approval from the Secretary of Health and Human Services. They can modify eligibility requirements or forgo provisions of federal law under the condition that the projects support the goals of the Medicaid program.

States first employed Section 1115 waivers to implement work requirements in 2017 under the Trump Administration. During that time, twelve states received approval from HHS. Shortly after, the Trump Administration was sued by health care advocates and civil rights groups, rescinding the work requirement legislation in Arkansas and Kansas. Because of this, other states were also prohibited from implementing their provisions.

GA's Work Requirements

Shortly after President Biden transitioned into office, he reversed a number of other waivers that provided states approval to implement Medicaid work requirements. Georgia was one of the states impacted by the decision and sued the administration. The District Court for the Southern District of Georgia ruled in support of Georgia, citing that the administration did not consider whether reversing the waiver would cause less Medicaid coverage. Georgia has become the only state with a work requirement for Medicaid eligibility, and the state's program, Pathways to Coverage, launched at the beginning of this month.

Work requirements have once again become a topic of debate among health care professionals and government officials. Some view the requirements as barriers to health coverage that go directly against the objectives of the Medicaid program. They argue that Medicaid is designed to provide insurance, not encourage employment. However, work requirement proponents say that the program has grown far beyond its original scope, and states must control costs. At the moment, states are navigating eligibility redeterminations, and it's important that vulnerable populations remain covered. Setting the work requirement debate aside, all states should be looking for ways to improve efficiency and cost avoid in their Medicaid plans.

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JUNE MEDICAID RECAP

Syrtis Solutions distributes a monthly Medicaid news recap to help you stay informed. The monthly roundup highlights developments, research, and legislation that pertains to Medicaid program integrity, cost avoidance, coordination of benefits, third party liability, improper payments, fraud, waste, and abuse. Here is a summary of last month's significant Medicaid developments.

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INCREASED MEDICAID SPENDING AND IMPROPER PAYMENTS

 

According to federal agency data from PaymentAccuracy.gov and the Office of Management and Budget, the federal government spent an estimated $247 billion in improper payments in 2022. The data also revealed that the Department of Health and Human Services' Medicaid program made up the majority of these payments at $80.6 billion. Medicaid has become the largest single budget item on states' budgets, and in order for the program to continue being solvent, states must resolve Medicaid's improper payment problem.

Recently, states have started resuming Medicaid eligibility redeterminations because of the end of the Coronavirus Public Health Emergency continuous enrollment provision. Since June 29th, at least 1,536,000 enrollees have been disenrolled. Some states are expecting the eligibility redeterminations to lower program costs; however, KFF is predicting that it's possible that state Medicaid spending will increase as the enhanced FMAP expires. Medicaid can not afford increased program spending while losing billions in improper payments.

A frequent misunderstanding is that improper payments originate from fraud and abuse when in fact, the vast majority stem from prosaic, mundane issues such as eligibility errors and old data systems. One way Medicaid administrators could decrease improper payments and improve program efficiency immediately is to adopt technology solutions that help identify primary commercial payers in order to avoid making claims payments in error.

Cost Avoid Improper Payments With Quality Data

Health plans have difficulty identifying primary coverage on pharmacy and medical claims because the data they access is not current, available, complete, or accurate. Thus, plans have no choice but to pay claims in error and chase reimbursement once other health insurance (OHI) is found. Unfortunately, for Medicaid plans, the actual monies recovered remain around twenty cents on the dollar.

Syrtis Solutions understood that Medicaid plans needed a method to determine active OHI coverage to adjudicate claims properly. ProTPL, introduced in 2010, is a real-time point-of-sale cost avoidance service for government-funded healthcare programs that delivers powerful, accurate, and actionable eligibility data. The solution gives health plans the ability to cost avoid Rx and medical claims and the associated costs of recovery.

Medicaid's improper payments are costing billions of dollars each year, and program expenditures are climbing. Because of this, states are likely to begin considering trimming benefits. To remain solvent and continue providing care to the most vulnerable populations, Medicaid must strengthen its fiscal oversight of program expenditures and make certain that program resources are spent properly. Presently, the best place to start saving resources and reducing improper payments is to provide Medicaid payers access to clean and actionable eligibility data that they can rely on.

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MAY MEDICAID NEWS ROUNDUP

 

Syrtis Solutions publishes a monthly Medicaid news roundup to help you stay informed. The monthly summary concentrates on developments, research, and legislation that pertains to Medicaid program integrity, cost avoidance, coordination of benefits, third party liability, improper payments, fraud, waste, and abuse. Here is a summary of last month's significant Medicaid developments.

Click this link to read the news. 

IMPROPER PAYMENTS KEEP MEDICAID ON GAO'S HIGH-RISK LIST

 

The GAO just recently published its updated High-Risk List. The update is part of the biennial High-Risk Series started in 1990 that identifies government operations susceptible to fraud, waste, abuse, and mismanagement. The current report marks the twentieth consecutive year that Medicaid has made the cut. According to the GAO, CMS must strengthen fiscal oversight of program expenditures to reduce improper claims payments and ensure that program resources are spent correctly.

Fiscal year 2022 was a demanding period for Medicaid as the program was dealing with the ongoing social and financial impact of the COVID-19 Public Health Emergency (PHE). Enrollment increased by almost 20 million people between 2020 and 2022. Consequently, initiatives to strengthen program integrity were often superseded by the necessity to act in response to the PHE and support states. In FY 2022, Medicaid provided close to 82 million beneficiaries with healthcare at an estimated cost of $516 billion.

High-Risk Segments of the Medicaid Program

The GAO's report pinpointed the following three segments that comprise the overall high-risk of the Medicaid program:

1. Improper payments hit $81 billion in FY 2022
2. The use of state-directed payments and supplemental payments
3. Limited oversight of Medicaid expenditures and utilization data

Recommendations from the GAO

Along with identifying segments of high-risk, the GAO's report also endeavors to help resolve these susceptibilities by making recommendations. Currently, seventy recommendations associated with Medicaid program integrity remain open. The GAO's recommendations to CMS for 2023 are:

• Expand its evaluation of states' implementation of provider screening and enrollment requirements and, for states not fully compliant with the requirements, annually monitor their implementation progress;
• improve oversight of Medicaid procurements;
• collect adequate provider-specific information from states on Medicaid payments to providers, including supplemental payments and the sources of funds states use to fund their share of the payments, and specify what criteria should be used to ensure that Medicaid payments at the provider level are economical and efficient;
• perform an assessment and take steps to ensure that resources to oversee state-reported expenditures are sufficient and allocated according to risk; and
• continue efforts to assess and improve T-MSIS data and articulate specific plans and associated time frames for using these data for broad program oversight.

Reduce Improper Claims Payments with True Cost Avoidance

Improper claims payments has been recognized each year by the GAO as a significant factor in Medicaid waste and mismanagement. Improper payments cost the program billions of dollars every year, threatening the program's solvency and sustainability. One way Medicaid administrators could minimize improper payments immediately is to adopt technology solutions that help identify primary commercial payers in order to avoid making claims payments in error.

Health plans have difficulty determining primary coverage on pharmacy and medical claims because the data they access is not current, available, complete, or accurate. Thus, plans have no choice but to pay claims in error and chase reimbursement once other health insurance (OHI) is found. Unfortunately, for Medicaid plans, the actual monies recouped remain around twenty cents on the dollar.

Syrtis Solutions recognized that Medicaid plans needed a way to determine active OHI coverage to adjudicate claims properly. ProTPL, introduced in 2010, is a real-time point of sale cost avoidance service for government funded healthcare programs that delivers powerful, accurate, and actionable eligibility data. The solution gives health plans the ability to cost avoid Rx and medical claims and the associated costs of recovery.

Medicaid has remained on the GAO's High-Risk List since 2003. Throughout the years, the program has struggled with fiscal oversight and integrity. Medicaid's improper payment rate alone is costing billions of dollars each year. To remain solvent, Medicaid must improve its fiscal oversight of program expenditures and ensure that program resources are spent properly. At the moment, the best place to start saving resources and reducing improper payments is to provide Medicaid payers access to clean and actionable eligibility data that they can rely on.

Find out more. 

MARCH MEDICAID NEWS

 

Syrtis Solutions publishes a monthly Medicaid news roundup to help you stay up-to-date. The monthly summary highlights developments, analysis, and legislation that relates to Medicaid program integrity, cost avoidance, coordination of benefits, third party liability, improper payments, fraud, waste, and abuse. Below is a list of last month's important Medicaid news.

Click to read more. 

FEBRUARY MEDICAID NEWS

 

Syrtis Solutions delivers a monthly Medicaid news roundup to help you stay informed. The monthly roundup highlights developments, analysis, and legislation that relates to Medicaid program integrity, cost avoidance, coordination of benefits, third party liability, improper payments, fraud, waste, and abuse. Below is a summary of last month's important Medicaid news.

Click here to read more. 

NY MEDICAID CARVE-OUT REPEAL AND SUIT

 

To reduce pharmaceutical drug costs and increase Medicaid program transparency, New York's Governor, Kathy Hochul, and the New York Medicaid Redesign Team announced earlier in the year that the state would carve-out the pharmacy benefit from the Medicaid program. After being postponed for two years, the carve-out is set to go into effect on April 1. However, lawmakers in the New York State Senate repealed the move in the one-house budget resolution this month.

Since the state's announcement to move to a fee-for-service model, there has been an ongoing clash in between safety net providers and pharmacists. Both groups are concerned about the state's vulnerable populations but disagree on how to serve them most efficiently. The legislators behind the repeal fear that the carve-out will interrupt the delivery of benefits, specifically at a time when the state will be executing eligibility redeterminations. Alternatively, advocates see it as an opportunity to simplify the Medicaid program.

Assembly Speaker Carl Heastie was among the legislators behind the repeal. He fears the carve-outs impact on entities that serve the states most vulnerable populations. Heastie is looking to protect 340b provisions that safety net providers rely on.

Pharmacists in support of the transition think that the move is long overdue. They believe the switch will improve the Medicaid program's transparency and help expand access for program beneficiaries by giving them more choice in who fills their prescriptions.

Aside from the repeal, a legal challenge opposing the carve-out also started recently. Shortly after the one-house budget resolution was passed, safety-net providers Evergreen Health and Heritage Health and Housing filed a lawsuit against the New York State Department of Health to halt the April 1st carve-out. According to the suit, the state's decision is discriminatory and violates the ACA.

In recent months, New York's decision to shift from a managed care model to a fee-for-service model has been a significant source of contention. While the carve-out is set to begin on April 1st, it now faces a repeal effort from the New York State Senate and a lawsuit from providers. It's not clear how the carve-out will be affected at this point, but given the repeal, lawsuit, and upcoming eligibility redeterminations, there are undoubtedly numerous issues for the state to work through.

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SAFETY NET COALITION URGES NY TO RECONSIDER CARVE-OUT

 

In March 2020, under former Governor Andrew Cuomo's administration, the New York Medicaid Redesign Team recommended that the state carve-out pharmacy benefits from the Medicaid program because of concerns pertaining to pharmacy spend and provider transparency. The reform essentially changes prescription drug reimbursement from a managed care model to a fee-for-service model, making the state responsible for the Rx benefit rather than MCOs and PBMs. To date, seven other states, including California, West Virginia, Wisconsin, Missouri, Ohio, Kentucky, and Tennessee, have carved-out pharmacy benefits from their Medicaid programs.

The state's decision was instantly met by opposition from safety net providers, 340B entities, community leaders, and nonprofits. They warned legislators of the harmful impact the move would have on the Medicaid prorgam and its beneficiaries' access to care. As a result, the carve-out was postponed in April 2021.

After a two-year postponement, the New York State Department of Health announced earlier this year that it would continue with the carve-out. Beginning April 1, 2023, Medicaid members will begin receiving their pharmacy benefits under the state's new delivery model, NYRx.

In spite of the state's decision, those in opposition to the change continue to make a concentrated effort to derail the carve-out as the April start date approaches. Save New York's Safety Net is a statewide coalition of providers and community organizations that represent vulnerable populations in the state. The coalition is fighting the transition because of its potential to disrupt access to specific drugs and its repercussions for community health centers.

For example, State officials that support the move to a fee-for-service model believe that it will increase program revenue by $250 million. That being said, under the current program framework, this money goes to safety-net providers around the state as a part of the 340B drug discount program. The program provides qualifying hospitals and clinics that treat low-income and uninsured patients with pharmaceutical drugs at a significantly lower cost. These savings help to fund programs such as vaccination clinics, housing assistance, transportation, outreach, and nutrition services. If the carve-out is carried out, it will divert these funds and lead to a reduction of services, clinic closures, and disruptions to the coordination of care.

Jacqui Kilmer, CEO of Harlem United, is amongst those in opposition to the state's decision. She expects the carve-out to drive up healthcare costs and views the measure as bad government from a policy and legal standpoint. However, the former business attorney is hopeful and strongly believes there is still a chance to convince Gov. Hochul to repeal the carve-out. According to Kilmer, "she can do that on her own without legislative approval, any kind of other oversight, budgetarily, or from the Department of Health."

Among lawmakers, several representatives sponsored bills in the former legislative session to repeal the pharmacy carve-out, but they were unsuccessful. These efforts are expected to be reintroduced this year, and legal challenges are anticipated if NYRx is implemented.

Along with the coalition's concerns surrounding the shift, there is also data that suggests New York and other states may want to reevaluate carving-out pharmacy benefits. In a 2018 report from the Association for Community Affiliated Plans (ACAP), the trade association found that when compared to fee-for-service models, managed care improves the quality of care and saves significantly more on brand name and generic drugs. ACAP analyzed Medicaid drug spending over a six year period and found the following:

• Managed care drug benefits produced considerable savings despite increasing prescription drug costs. "The average net (post-rebate) cost per MCO-paid Medicaid prescription during 2016 was $37, 73 percent of the average net cost of Medicaid prescriptions paid in the fee-for-service (FFS) setting during 2017, which was $50.".
• Managed care Rx services had greater utilization of generic drugs, which helped to decrease drug expenses. "In 2017, generic drugs represented 88.1 percent of MCO-paid Medicaid prescriptions versus 83.7 percent in the FFS setting.".
• Six states that implemented managed care prescription benefits only had a 1 percent increase in net costs per prescription between 2011 and 2014. On the other hand, seven states that carved-out pharmacy benefits saw a 20 percent increase in net costs per prescription during the same period. These seven states missed out on an estimated $307 million in savings in 2014 in comparison to the six states that transitioned to managed care.
• Carving-in prescription drug benefits decreases complexity and improves the quality of care for beneficiaries because managed care plans can coordinate with providers more efficiently.

In 2021, Medicaid expenses were the largest spending category, accounting for 27 percent of state budgets on average. In the same year, Medicaid spent around $80.6 billion on outpatient prescription drugs. Some states have elected to transition to fee-for-service models and carve-out pharmacy benefits to reduce program expenditures. While this is one strategy to try and reduce costs, states should also turn to opportunities to improve efficiency and cost avoid in their Medicaid plans.

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JANUARY MEDICAID NEWS

 

Syrtis Solutions distributes a monthly Medicaid news summary to help you stay informed. The monthly summary highlights developments, analysis, and legislation that pertains to Medicaid program integrity, cost avoidance, coordination of benefits, third party liability, improper payments, fraud, waste, and abuse. Below is a summary of last month's significant Medicaid news.

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BAD DATA IS COSTING MEDICAID BILLIONS

Medicaid currently fails at providing a system that efficiently and accurately stores and utilizes member data. As Medicaid is a joint state and federally run program, there are many problems with coordinating data platforms. Different states have their own unique data processing and storing, and while federal Medicaid data can reveal a clearer picture of consistent problems across state lines, lack of communication and data sharing produces significant barriers. While technology has advanced, gaps in existing data or errors in computation have direct consequences to the swift identification of third party liability (TPL), resulting in costly reimbursement strategies for Medicaid. The lack of uniformity in these systems prevents Medicaid from functioning smoothly.

One of the major challenges facing Medicaid is the lack of quality TPL data. In testimony before Congress in 2012, HHS Regional Inspector General Ann Maxwell delivered an alarmingly unfavorable evaluation pertaining to the reliability of data federal and state authorities use to identify overpayments and fraud in the Medicaid program. She stated, "much of the data used to identify improper payments is not current, available, complete, [or] accurate." A decade later, the exact same issues with TPL data that Maxwell outlined in her testimony to congress exist today. Apart from simple mistakes at the point of service with providers, there are fundamental problems in the health care data used by the Medicaid program that result in the loss of literally billions of dollars a year.

STATE DATA ISSUES

Each state Medicaid agency (SMA) is responsible for delegation of funds and detecting TPL through their own data sources. That being said, states have differing policies and benefits for Medicaid enrollees, producing inconsistent results. State policies may have existing gaps in information or may be so complicated that they are virtually impossible to navigate, leading to administration frustration. The Medicaid Management Information System (MMIS) works to centralize information and uses patient identification numbers to help with payment delegation. That being said, because of the large Medicaid population, in addition to continual churn, these datasets can be cumbersome and create missing information that causes difficult identification of TPL. Furthermore, Medicaid information is not communicated across state lines, creating repetitive errors that could be avoided. Health care organizations may share patient data with Medicaid for payment purposes, but the various types of data management could be an issue when trying to translate to Medicaid-specific forms.

FEDERAL DATA ISSUES

While states may send routine reports to federal Medicaid agencies, a working federal database may have a hard time deciphering the varying information from different SMAs. Data can be lost, infrequently collected, or incorrect across state lines. An individual in one state could move to an adjoining state and lose specific Medicaid benefits. Data might only show a small piece of the big picture and can not properly address the nuances of a social program and the problems that persist across states. Federal guidelines may only guide overarching procedures, and not have control over individual states' Medicaid programs and policies. This disjunction of administration proves difficult when trying to accurately find TPL data for not only individuals, but also states and federal overview.

Data sharing is therefore an efficient and effective way to decrease the number of inconsistencies between states and local organizations that require Medicaid payment. Nevertheless, a slew of issues stem from data sharing in totality. Even within states, health care organizations are hesitant to share patient data. Sacred protected health information (PHI) delegates immense responsibility to hospitals, providers, and care coordinators to handle data cautiously. Even if organizations are willing to share patient data, unique technology systems across health care do not always capture the same data or translate it in the same way. SMAs are responsible to intake this information and identify TPL, which increases difficulty when trying to smooth operations. This reluctance to share information translates to state and federal Medicaid agency issues. Sharing large amounts of diverse data has been troublesome and leads to inconsistent data and high costs to the Medicaid program.

For years Medicaid has struggled to effectively store and utilize program beneficiary data due to disparate data platforms and the inability to accurately share Medicaid data between states and the federal government. Moreover, much of the healthcare data that Medicaid plans do have access to is leading to billions of dollars in improper payments each year. Without having reliable, complete, and accurate TPL data, Medicaid plans will continue to make claims payments in error and rely on costly reimbursement strategies. Plan administrators must look to true TPL technology solutions for additional efficiency and cost avoidance opportunities to protect the program's valuable resources and ensure that plan members receive the care they need.

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MEDICAID NEWS FROM 2022

Syrtis Solutions publishes an annual Medicaid summary to help you stay informed. The yearly roundup concentrates on highlights, analysis, and legislation that pertains to Medicaid program integrity, cost avoidance, coordination of benefits, third party liability, improper payments, fraud, waste, and abuse. Below is a summary of 2022's Medicaid developments.

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DECEMBER MEDICAID NEWS

 

Syrtis Solutions sends out a monthly Medicaid news summary to help you stay informed. The monthly summary focuses on developments, analysis, and legislation that relates to Medicaid integrity, cost avoidance, coordination of benefits, third party liability, improper payments, fraud, waste, and abuse. Below is a list of last month's important Medicaid news.

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