Medicaid payment integrity remains a priority as federal oversight identifies continued challenges in reducing improper payments. An August 2026 HHS OIG audit found that HHS did not fully satisfy federal payment integrity requirements for FY2025, while Medicaid's reported improper payment rate increased.
According to the HHS OIG report, Medicaid's improper payment rate rose from 5.09% in FY2024 to 6.12% in FY2025. OIG also concluded that HHS had not demonstrated sufficient improvement in Medicaid payment integrity.
While improper payments have numerous causes, the findings reinforce the importance of strengthening controls throughout the payment process.
COB/TPL Is One Piece of the Payment Integrity Strategy
For Medicaid, identifying other liable coverage is an important part of making accurate payment decisions.
CMS Medicaid COB/TPL guidance states that Medicaid is generally the payer of last resort and requires states to take reasonable measures to identify third parties legally responsible for beneficiaries' healthcare costs.
The effectiveness of that process depends heavily on data.
Third-party insurance information can become outdated as beneficiaries gain or lose employer-sponsored coverage or move between health plans. Without current information, another payer's responsibility may not be apparent when Medicaid adjudicates a claim.
Cost Avoidance Addresses Liability Before Payment
When coverage is known before payment, Medicaid has an opportunity to cost avoid the claim.
CMS guidance on third-party liability distinguishes this process from pay and chase. Cost avoidance addresses known third-party responsibility before Medicaid payment, while pay and chase seeks reimbursement after Medicaid has already paid.
Recovery remains an important safeguard, but it begins after Medicaid dollars have left the program.
The challenges surrounding improper payments and traditional pay-and-chase recovery support a broader approach in which Medicaid payers use both prospective and retrospective controls.
Improve Coverage Visibility Before Adjudication
Real-time insurance discovery provides an opportunity to strengthen the prospective side of TPL.
Syrtis Solutions' real-time prospective cost avoidance technology helps Medicaid payers identify active third-party coverage before claims are paid. Better coverage visibility can improve COB/TPL accuracy, support payer-of-last-resort requirements, and reduce avoidable Medicaid expenditures.
Medicaid payment integrity requires controls that operate throughout the claims lifecycle. Strengthening COB/TPL information before payment, while maintaining effective recovery capabilities after payment, gives Medicaid programs a more comprehensive approach to identifying liability and protecting program funds.
