THE WINDOW OF OPPORTUNITY IS CLOSING FOR VA MEDICAID EXPANSION

In February, Virginia's work on the Commonwealth's biennial spending plan budget came to a halt because of the inclusion of provisions for Medicaid expansion. In short, the Republican House backs expanding Medicaid while the Republican Senate does not. Due to the divided GOP support, the regular session was adjourned and no budget was successfully passed. Virginia Governor Northam (D) compelled legislators to deliver as soon as possible. He warned that if a proposal was not drafted and on his desk in the near future, he would submit a budget that expanded Medicaid without some of the compromises made with Republicans; such as, imposing co-pays and work requirements.

Northam stated, "We've obviously compromised. If I send an amendment down, and I will if I need to, some of those compromises won't be in there and it will be closer to the original proposal in the budget Governor McAuliffe and I introduced."

McAullife's budget was rejected last December. The failed budget proposal had provisions for Medicaid expansion without conditions like work requirements or co-pays.

In an attempt to assist low-income citizens, Governor Ralph Northam followed through on his warning and revealed his proposed budget last week. He will deliver it to the Virginia General Assembly on April 11. According to the Virginian governor, the plan mirrors McAullife's plan but it will also incorporate an amendment created to invest in a revenue reserve fund.

Northam states, "Virginians have waited long enough for a balanced budget that expands health care access and invests in economic opportunity through education, workforce training, mental health and addiction services, and better pay for public servants. The General Assembly will return on April 11th to pass the budget Virginians deserve, but we shouldn't wait until then to get to work. My team and I are ready to work with the General Assembly money committees to get Virginia families, local governments, institutions of higher education and many others the certainty and resources they deserve by passing a budget that expands health coverage."

Under Gov. Northam's budget, Medicaid expansion would be available to almost 400,000 citizens. As a result of savings from the expansion, investments could then be made into workforce development, opioid addiction prevention, education, mental health services, and increases in pay for state workers. Additionally, the amendment would direct revenues that exceeded those predicted in the budget to a revenue reserve fund. This investment would serve to provide the state additional financial security in economic downturns.

According to Northam, "The budget I am introducing makes a strong investment in our Commonwealth's cash reserves. However, in a period of unprecedented volatility in Washington and economic uncertainty across the globe, we should do everything we can to shield Virginia taxpayers against an unexpected revenue shortfall. By including this amendment we can maintain a fiscally conservative budget and send a message to Virginians and to the rating agencies that this budget will invest wisely while also preparing for unexpected downturns."

After the budget was introduced, House Republicans went on the record claiming that the governor's proposal is "the start of a process that we are confident will lead to the adoption of a new budget long before July 1."

After the announcement, Senate Majority Leader Thomas K. Norment (R) criticized the proposal when Northam characterized it as a guide for discussion. Norment said, "That he (Gov. Northam) continues to make Obamacare's Medicaid expansion integral to that budget, and his refusal to base his plan on a more current revenue forecast means the current standoff can not be resolved quickly."

Medicaid's landscape continues to be a focus between Virginia's lawmakers in 2018. Due to the dispute among Republicans and Northam's recent proposal, it is unclear if Medicaid expansion will occur or if there will be work requirements and other conditions for eligibility. Legislators will reconvene in a special session on April 11 but if they do not successfully pass a budget, Virginia would have its very first government shut down.

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H.R. 938 MISSES THE POINT: THE NEED TO MAKE MEDICAID MORE EFFICIENT

By Howard Green

H.R. 938, the Medicaid Third Party Liability Act, was recently presented by Rep. Michael Burgess (R-Texas) to help Medicaid save money. As legislators return to Washington this week, health care remains at the top of their agenda. The primary issue amongst Republicans is how to handle the Medicaid debate, particularly in states that expanded the program, or are choosing to expand under the ACA. But they will have a challenging time funding the expansions without continued federal support. The outcome of the decision is sure to affect patients, health care workers and the overall economy.

The Trump administration has left all sectors involved in health care with uncertainty. The promise to repeal and replace the Affordable Care Act with the AHCA passed by a razor thin margin last month in the House of Representatives. Waivers to alter Medicaid are being submitted to HHS for review. And the publication of the president's budget creates ambiguity with regard to the level of federal funding states can count on.

Trump's budget, "A New Foundation for American Greatness," eviscerates spending in almost every department except defense. While it has little to no chance of passage, health care professionals caution that it shouldn't be ignored because it demonstrates clear intent. "It's hard to imagine that it'll be enacted fully, but at a minimum, it reflects the priorities of the administration," says Elizabeth Burak, senior program director at Georgetown University's Center for Children and Families.

The administration's submitted budget would slash Medicaid spending by $800 billion over a decade. This is above and beyond suggested cuts in the American Health Care Act to replace the ACA, which the President's budget assumes will become law. If both the President's proposed budget and the AHCA were to pass, states will encounter well over a $1 trillion reduction in Medicaid funding.

Trump's budget director, Mick Mulvaney, emphatically argues that the decreases in funding, along with the shift to per capita caps and block grants, would offer states more flexibility in the administration of their respective Medicaid programs. However, most health care experts believe that such deep cuts would only give states flexibility in disenrollment plans for a large swath of Medicaid beneficiaries.

So currently, more than ever, Medicaid plans should be concentrating their efforts on finding ways to further efficiency and cost savings ahead of potential funding cuts. Discovering ways to save taxpayer money is certainly a good practice regardless of the political headwinds, but now; Medicaid overseers can not rest on their laurels and assume the status quo of federal funding will continue. They need to begin getting aggressive in cost control. Recently, House Bill H.R. 938 was presented to do just that.

H.R. 938, known as The Medicaid Third Party Liability Act, aims to remove loopholes that forces Medicaid to pay for claims that are the liability of primary payers. As much as 13 percent of Medicaid members around the nation hold additional insurance other than Medicaid, which is called Third Party Liability (TPL). Types of TPL include employee insurance, Workers' Compensation, Medicare, COBRA health insurance from former employment, casualty insurance, dental insurance, eye insurance and insurance to cover pharmaceutical costs. In these instances, Medicaid pays last, and if a Medicaid member holds other insurance coverage, that insurer pays first and then Medicaid pays any remaining costs.

H.R. 938 was formed to increase savings and promote efficiency by eliminating loopholes that third parties have been capitalizing on. The bill protects against payers that are liable for costs from holding back payments to Medicaid. The primary provisions in H.R. 938 that help Medicaid avoid the costs of improper claims payments are:

• H.R. 938 would thwart efforts of liable commercial payers to deny reimbursement of claims due to a lack of prior authorization.
• H.R. 938 would afford Medicaid Managed Care Organizations (MCOs) the same rights as state-run Fee For Service plans to be the payer of last resort.
• H.R. 938 would replicate the same prompt payment standards regularly enforced in the commercial marketplace, but in this case, the recovery of improper claims payments made by Medicaid that are really the liability of a primary insurer.

While the provisions of The Medicaid Third Party Liability Act are solid steps in the right direction, they are in a sense addressing the symptoms of improper claims payments, rather than the disease of "Pay & Chase". What we need is more pressure or incentive to persuade Medicaid plans to get better at identifying TPL prior to improperly paying for claims. The Social Security Act, signed into law by President Franklin Roosevelt in 1934, states in the statute § 1902( a)( 25) of the law "... that the State or local agency administering such plan will take all reasonable measures to ascertain the legal liability of third parties ... to pay for care and services" delivered to Medicaid recipients.

Passage of the Medicaid Third Party Liability Act (H.R. 938) will help recover money that was spent incorrectly, but until we shift our focus from Pay & Chase to prospectively preventing the costs of improper payments, Medicaid will still see substantial amounts of waste.

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PROPOSED MEDICAID REDUCTIONS FROM PRESIDENT TRUMP'S ADMINISTRATION

By Howard Green

Medicaid could receive funding cuts due to Trump's 2018 budget proposal and this may fundamentally transform how the Medicaid program operates. The proposals goal is to give individual states flexibility. According to the budget, states will have an option between receiving a block grant in the fiscal year 2020 or they can choose to receive Medicaid funds as a per-capita cap grant. This is the foundation of the American Health Care Act, which, if passed in the Senate, would take the place of the Affordable Care Act.

Richard Frank, a Harvard Medical School professor, feels this will fundamentally change how Medicaid would operate. "It's no longer an open-ended matching program" and the proposal "fundamentally changes the kind of contract that exists between the states and the federal government." The CBO estimates that 14 million people will no longer have access to Medicaid by 2026 as a result of the AHCA eligibility requirements.

IN THE PAST, STATES RECEIVE MONEY FOR MEDICAID FOR:
New treatments

Treatment expenses

An increase in healthcare needs

In addition to the federal government match, states themselves fund a considerable amount for their Medicaid programs. This is beginning to exhaust resources locally and federally because Medicaid has always been an open-ended entitlement program.

The possible passage of the proposed budget plan has states on their feet to grow their Medicaid programs. Since the implementation of the ACA, eligibility requirements became relaxed and contributed in broadening access to a larger percentage of the population. To compensate for the increased amount of enrollees, states received enhanced federal funds. States such as North Carolina, Virginia, and Kansas made efforts to expand in March but failed.

NO MEDICAID PLAN IS FLAWLESS

Richard Frank is troubled with the proposal's two funding choices because the medical care CPI does not account for shifts in the population or unexpected crises. For instance, overall improved health and longer life spans have risen in recent years. People are more healthy and living longer. This means in the near future, the amount of eligible enrollees to the program will increase and create a larger demand on Medicaid. Dr. Frank feels that the costs for elderly people's healthcare would jump at a faster rate than the medical care CPI.

In addition, the per-capita funding option would organize people into groups based on age or disabilities. This is problematic since the groups would be too broad and would not allow for effective distribution of available funds. The Harvard medical professor estimates there will be a 9% shortfall, which translates into $10 billion annually that states would have to satisfy. On the other hand, the CBO estimates that spending will be reduced 25% by 2026 compared to the ACA.

STATE'S OPTIONS

In the current landscape, states will need to either cut expenses or invest in their programs. If they cut costs, beneficiaries will lose coverage and the eligibility requirements will become stricter for future enrollees. It's thought that substance abuse and mental illness treatment would be the first to be discontinued. This is problematic given that opioid deaths increased 15% between 2014 and 2015. The medical care CPI doesn't account for that growing rate.

At this point, there is a significant amount of criticism as to what should be done and how it should implemented. What is certain is that the demand for Medicaid is increasing and there are many opinions on the best course. Currently, a majority of the public thinks the program should remain the same.

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Medicaid Improper Payment Rate Continues to Grow

Last month The house held a hearing regarding the growing number of improper payments in Medicare and Medicaid. The House oversight panel reviewed concerns regarding increasing improper payment rates discovered by federal oversight groups which include the Government Accountability Office (GAO) and the Health and Human Services Office of the Inspector General (HHS-OIG).

The key testimony came from Dr. Shantung Agrawal, CMS's Director of the Center for Program Integrity. Dr. Agrawal explained how CMS and the states were employing guidance from the GAO and HHS-OIG to reduce improper payments. He also discussed challenges with carrying out program integrity initiatives, particularly in the state Medicaid programs.

In 2005, CMS implemented the Medicare Recovery Audit Program, resulting in billions of dollars recovered for the Medicare Trust Fund. CMS has also implemented numerous other programs to identify and recover improper payments, including the Medicaid Integrity Program, Zone Program Integrity Contracts and a host of others. These programs are sizable and complex efforts, and although they have had certain success, the improper payment rate for Medicare and Medicaid continues to grow.

It's time that we stop throwing away tax dollars as a result of inefficiency and poor technology. CMS and state Medicaid agencies should focus their efforts on proactively avoiding improper payments, not on detecting liable primary payers after the improper payment is made and then attempting to recoup the wasted dollars after the fact (A systemic method known widely as "Pay & Chase"). The means to achieve this is by implementing prospective cost avoidance at the time claims arrive to the Medicaid plan, before any remittance is made. Technologies are actually currently obtainable that can stop paying on claims that are the liability of third party commercial payers, which account for 56% of Medicaid's improper payments. Prospectively identifying if a Medicaid recipient has primary coverage will effectively eliminate the necessity for post-payment recovery.

To this end, the program which gauges Medicaid improper payments and eligibility could be getting tougher in the future under a new rule proposed by CMS last Monday.

The measure would apply stipulations of the Affordable Care Act in the Payment Error Rate Measurement program, that generates improper payment rates accordinged to assessments of the fee-for-service, managed care and eligibility components of Medicaid. A major provision is that the task of performing PERM eligibility assessments would move to a state-supported federal contractor, rather than the current provision requiring states to administer their own eligibility reviews and document results to CMS.

States whose improper payment rates surpass 3% could face stricter Corrective Action Plans and potential payment reductions or disallowances under the proposed regulation. Monday's proposal likewise would transform the Medicaid Eligibility Quality Control program, a separate eligibility assessment program that obligates states to report the ratio of their improper payments for medical services compared with their total costs for medical services.

The aim is to "restructure" the program so it can help states decrease their eligibility improper payment rates, and more effectively complement PERM.

The agency is taking comments on the proposed rule through August 22. Click here to read the entire proposal in the Federal Register.

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Trends is Medicaid Managed Care Spending

Federal spending for Medicaid managed care represented over one-third of the entire government Medicaid spending in 2014, according to a government report (GAO-16-77) released Jan. 19 that showcases exactly how states are progressively relying on managed care as they expand Medicaid coverage under the Affordable Care Act.

The Government Accountability Office report said federal spending on Medicaid managed care increased from $27 billion in fiscal year 2004 to $107 billion in FY 2014. Managed care as a percentage of total federal Medicaid spending was higher in seven of eight selected states in fiscal year 2014 compared with 2004, yet total and average per beneficiary payments by states to managed care organizations (MCOs) varied.

The importance of managed care in Medicaid-- under which states contract with MCOs to provide a specified group of programs-- has increased as states increase eligibility for Medicaid under the ACA and progressively move people with complicated health needs into managed care, the report said. States have flexibility inside broad federal guidelines to develop and execute their Medicaid programs, and as a result play a critical role in overseeing managed care.

Medicaid managed care plans serve some or all Medicaid enrollees in 39 states and DC, and more than half of all Medicaid beneficiaries obtain all or some of their care from risk-based managed care organizations.

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Medicaid Claims And Healthcare Waste: While The Data Flows, New Cracks Surface

With the heightened attention that commentators and government administrators have paid to the need for precise claims data in federal health care systems, one might have hoped that presently, approximately 2 years later, the issues would be tended to and the federal government's data rendered more dependable. Unfortunately, while improvements may well have been made, gaps in the programs continuously surface. Merely a couple of weeks ago, the Department of Health and Human Service's Office of the Inspector General ("HHS-OIG") published a report concerning flaws in the "Medicaid Interstate Match" program, which is aimed to minimize improper Medicaid payments by identifying beneficiaries that are registered in the Medicaid programs of more than one state. Despite the fact that the document does not directly suggest that issues in the Medicaid Interstate Match program are going to consequently impair fraud investigations or even result in the targeting of innocent Medicaid participants, it nevertheless again draws attention to the fundamental problems that exist in depending on data mining in the federal government health care system.

As the report from the HHS-OIG specifies, the Medicaid Interstate Match belongs to a more comprehensive data gathering program (the so-called "Public Assistant Reporting Information System," or "PARIS") that makes use of Medicaid enrollment records so as to determine if the very same person is acquiring government health care benefits from more than a single source or from more than just one state. The Medicaid Interstate Match in particular can identify cases in which patients continue to be enrolled in a given state's Medicaid program in spite of the fact that they have relocated to a different state and are receiving benefits from that second state's Medicaid program. Despite the fact that a person's receipt of money from more than one state's Medicaid program frequently results from a failure to promptly report a change of address, as opposed to from an intent to defraud, the program could nonetheless spare the Medicaid program significant amounts of funds that recipients are not eligibled to receive. Consequently, as of October 1, 2009, the Social Security Act mandated every state to participate in the Medicaid Interstate Match, and the Centers for Medicare and Medicaid Services ("CMS") oversees the issuing guidance involving such involvement.

Read more at: http://www.syrtissolutions.com/medicaid/9355

Nevertheless, as the HHS-OIG uncovered in its report, the engagement of the various states in the Medicaid Interstate Match program is considerably limited. Indeed, of the 4 measures that HHS-OIG has identified as constituting "participation" in the Medicaid Interstate Match (notably, CMS has not on its own previously described the term "participation," even though such participation is a pre-requisite with regard to securing federal funding), some of these measures in fact are not taken. As an example, while state involvement in the Medicaid Interstate Match requires that a state submit its enrollment data so that records can be matched with that from all other states, HHS-OIG determined that, for a sample 3 month period (the Medicaid Interstate Match administered on a quarterly basis), fourteen states did not provide Medicaid enrollment files for each of their enrollees, and with regard to those 14 states, on average merely 46 percent of the relevant data was supplied. As another illustration, in order for the Medicaid Interstate Match program to perform a significant role in discovering improper benefits payments, information that seems to signify a match among beneficiaries in more than just one state must be validated, in order to substantiate that there is not a "false positive." Nevertheless, the HHS-OIG report established that the states did not verify almost 70 percent of the matches that were identified, in part because the enrollment information submitted by the states was incomplete. Because of these and other problems, the HHS-OIG report reveals that for the three-month time frame under examination, not a sole improper Medicaid payment was recuperated by means of the use of the Medicaid Interstate Match.

Exactly what is one to make of HHS-OIG's document relating to the failings of the Medicaid Interstate Match? Initially, there is the somewhat anti-climactic or even clear determination reached by HHS-OIG, which is that "CMS should issue guidance to states on the requirement for participating in the Medicaid Interstate Match." Wisely, perhaps, CMS "concurred" with this guidance.

More vital, though, are a couple of observations which could be of particular relevance to those who practice in the healthcare fraud sector. First and foremost, HHS-OIG details in its document that, according to CMS, "5.8% of all Medicaid payments made in fiscal year 2013 were improper, representing $14.4 billion in Federal expenditures." The federal government frequently specifies such substantial numbers as evidence of widespread fraud, waste, and abuse that supposedly exists in federal government healthcare programs. Yet in point of fact, the HHS-OIG report offers some much needed context, indicating that 57% of the "improper" Medicaid payments come from more prosaic, mundane issues, like the "eligibility errors" that arise when a person moves from one state to another and doesn't supply Medicaid with a change of address. Fraud in the Medicaid program may still be a dramatic problem, but when "improper payments" are the outcome of these kinds of "eligibility errors" instead of fraud, the true extent of the challenge can better be recognized.

Second, despite the fact that the Medicaid Interstate Match is meant to detect eligibility mistakes rather than fraud, the defects in the gathering and utilization of Medicaid records continue to reinforce significant concerns. As this blog has noted, dependence on unreliable data and flawed methodology can lead to innocent participants in the healthcare system being exposed to expensive, lengthy, and potentially crippling audits and investigations. Additionally, while initiatives to correct data inaccuracies and address issues in program implementation might sometimes have a beneficial effect, systemic problems relating to the overall size of the Medicare and Medicaid programs, the nature of the bureaucracies which surround them, as well as the challenge of coordinating federal-state interactions in such a complicated area might render it impossible for healthcare data mining to ever be a fully reliable source of investigative decisions. For the regulatory authorities, auditors, investigators, and prosecutors who rely upon government data when determining whether or not to bring their power to bear on individuals who are the subjects of costly and burdensome health-care investigations, every one of these issues must carefully be weighed in the mix.

Why "Pay and Chase" when your business can cost avoid?

It's certainly not easy to identify primary business insurance coverage with regards to your plan's members at the point of sale-- costing your company time and money tracking down reimbursements for claims that others should certainly have paid for. And thus far with little luck: generally no more than 17 % of the money billed to primary insurance carriers is actually recovered through Medicaid plans that paid off claims in error.

Why spend for additional health plan data your business simply cannot utilize? ProTPL provides prompt intelligence you will be able to act upon-- not a mass of information and facts.

As soon as ProTPL finds additional medical insurance, you can reverse the most recent claim and ensure that future claims, whether pharmacy and medical, aren't paid in error. Identifying additional medical insurance swiftly, prompted by means of Pharmacy claims, permits your company to intercept the medical claims, which include office or ER visits, that practically always follow upon a pharmacy claim. The moment those new claims turn up, high quality eligibility details cross-walked between pharmacy and medical alleviate the necessity for "pay and chase.".

ProTPL immediately identifies commercial insurance coverage that other vendors are normally not able to discover. Our users see an average 25 % boost in various other health insurance identification. Your claims are actually checked against a master patient list of over 280 million commercially covered lives; the pay and chase biggest and most complete data source connected with active health care policy coverage information in the country. This means you get the best as well as latest eligibility responses the moment you need them--sparing you the expense of recovery.

http://syrtissolutions.com/third-party-liability/pay-chase-can-cost-avoid/

The Demand for Syrtis Solutions' Cost Avoidance Program

In 2006, the United States Government Accountability Office (GAO) released a statement to the Centers for Medicare and Medicaid Services (CMS) on the problems faced by states in putting into effect Medicaid third-party liability (TPL) prerequisites.

The record cited two basic problems:
The challenge concerning confirming Medicaid beneficiaries' private health coverage because of the absence of trustworthy data sources. In the absence of reliable data, approximately 13% of all Medicaid recipients that use unreported primary health policies are actually costing states billions of dollars annually in healthcare expenses that ought to be paid for by a third party.
The issue inherent with the collection of costs from third parties. Retroactive recovery procedures, often regarded as "pay and chase," are really costly, ineffective as well as only able to yield 17% for each dollar wrongly spent.

In an effort to address the issues described in the GAO report, CMS issued guidance to states in a 2008 Budget Brief that requires states to uphold the cost avoidance criterion for pharmacy claims as well as do away with waivers that authorize pay and chase approaches.

Built upon this particular guidance, states have indeed reacted by establishing coordination of benefits (COB) programs which count on self-reported recipient eligibility data and/or on stagnant data accumulated by TPL vendors for pay and chase purposes. That information is definitely incomplete, latent and certainly not sufficient for true cost avoidance. If you want to successfully satisfy CMS' cost avoidance guidelines, a reliable point of sale approach that accesses a real-time nationwide data bank of health care coverage would be called for to cost avoid claims and eradicate the problems attempting to collect monies for claims that states should have not paid to begin with.

In 2008, on behalf of disaster relief initiatives, CMS relied on Syrtis Solutions to deploy a real-time pharmacy cost avoidance solution at the point of service (POS) following hurricanes Ike and Gustav. CMS needed a service that would prospectively cost-avoid pharmacy claims especially for those patients with other health coverage. The solution accessed Surescripts' Master Patient Index (MPI), which houses in excess of 230 million lives, to prospectively identify individuals having other health coverage at the point of sale.

The Emergency Prescription Assistance Program (EPAP) was a success, cost avoiding 15% of all claims in sub-second transaction times with zero timeout issues and, most importantly, without involving workflow adjustments at pharmacies.