MEDICAID NEWS IN JULY

Syrtis Solutions sends out a monthly Medicaid news roundup to help you stay informed. The monthly roundup 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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JUNE MEDICAID RECAP

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

See the news here. 

COST AVOIDANCE MAKES MORE SENSE

 

Medicaid has become an integral safety net program that gives access to health care for millions of Americans. Payment for this health care is either delegated to Medicaid or other third party insurance coverage. In 2012, 7.6 million people on Medicaid had other private health insurance coverage, and 10.6 million had other public coverage. Medicaid is positioned as the "payer of last resort": if the Medicaid beneficiary has supplemental insurance, that third party insurance is liable for primary payment. The additional insurance coverage is commonly referred to as third party liability (TPL) and creates cost savings for Medicaid by rerouting payment to other forms of insurance before Medicaid must pay. Unfortunately, Medicaid is losing billions of dollars a year because plans are unable to identify TPL.

Identifying TPL is a very complex undertaking because of siloed data, antiquated technologies, and network latency. Medicaid plans attempt to ascertain liable third parties by making use of data matching in several health care data sources. However, they are rarely updated and create several barriers. The challenge of finding accurate TPL frustrates those on the frontlines and creates a stressful, time-consuming search that only occasionally generates results. Claims may already be in progress or completed when TPL is identified. In that case, Medicaid scrambles to get reimbursed for the money they paid for the health care provided when it should have been delegated to a third party for payment. This scrambling is called "pay and chase": Medicaid chases the payment from the third party. Once Medicaid plans identify the liable third party payer, they rarely receive a full refund from the amount originally distributed, and it's costing the program billions of dollars in waste. Typically, Medicaid only recovers a mere 17% of funds used for payment through the "pay and chase" method. "Pay and chase" is clearly ineffective and inefficient. Searching for TPL, identifying the correct distributor, and replacing funds all take additional time and increased administrative costs.

The obvious solution for all parties involved is to identify TPL at the start of the coordination of benefits. Providers are paid faster, administrators have ease identifying the accurate payment provider, and Medicaid enrollees have their services covered. Finding solutions for prospective TPL identification should be made a priority, even more so for a program with such a wide scope and reach as Medicaid. Medicaid plans agree that cost avoidance makes more sense, but until now, the ability to execute it effectively has not been widely available.

Syrtis Solutions realized that Medicaid plans needed a solution to identify active OHI coverage so that claims could be adjudicated correctly. So, in 2010, they launched ProTPL, a real-time point of sale cost avoidance service for the payer of last resort market. ProTPL delivers powerful and accurate eligibility data that can be acted upon. The solution enables plans to cost avoid Rx and medical claims and the associated costs of recovery. Moreover, the coverage identified by ProTPL can not be found by other vendors. Syrtis Solutions is able to accomplish this by checking claims against the nation's largest and most complete active healthcare coverage information database. Health plans that implement ProTPL see an average 25% increase in OHI discovery. This means Syrtis' customers get the best and latest eligibility responses when they need them.

Identifying primary commercial insurance coverage is incredibly difficult for payers of last resort. Due to the complexity of COB, the near-constant change in the Medicaid population, and bad quality eligibility data, health plans depend heavily on retrospective identification and recovery. Unfortunately, this is costing Medicaid billions of dollars in waste. To protect program resources and ensure that vulnerable populations receive the care they need, plan administrators should look to true TPL technology solutions for further efficiency and cost avoidance opportunities.

Find out more here. 

FFCRA AND PHE MEDICAID ELIGIBILITY REDETERMINATIONS

On January 31, 2020, the Department of Health and Human Services declared the Coronavirus a public health emergency. Since then, the Public Health Emergency (PHE) has been renewed nine times, but it is set to expire this August unless it is extended again. Its expiration will have a major impact on Medicaid, when one takes into consideration that millions of beneficiaries will lose the coverage that the PHE and corresponding legislation provided.

Soon after the PHE was declared, Congress passed the Families First Coronavirus Response Act (FFCRA). The legislation served to provide relief during the pandemic by expanding Medicaid to prevent coverage losses for vulnerable populations while simultaneously giving fiscal relief to states. The FFCRA was able to accomplish this by raising the federal medical assistance percentage (FMAP) by 6.2 percent. Additionally, the FFCRA altered the maintenance of eligibility (MOE) requirements by prohibiting states from changing eligibility or removing members from the program, and changed enrollment processes until the end of the pandemic.

Due to the changed Medicaid eligibility criteria, enrollment in the Medicaid program surged during the pandemic. A report by KFF estimated that program enrollment grew by twenty-five percent or 22.2 million enrollees between FY 2019 and FY 2022. Out of those enrolled, MOE enrollment growth represented 18.7 million new enrollees.

With the end of the PHE approaching, states will need to review their Medicaid budgets considering that they will no longer receive the FFCRA's increased funding. Additionally, the MOE requirements will expire, and states will need to begin eligibility redeterminations. As a result, KFF estimates that anywhere between 5.3 million and 14.2 million enrollees could lose coverage.

According to Medicaid.gov, this will be the "single largest health coverage transition event since the first open enrollment period of the Affordable Care Act."

Coordinating benefits to ensure eligible beneficiaries continue receiving coverage during the transition will be critical. CMS has published guidance to assist states with eligibility redeterminations, transitions between coverage programs, and resuming normal eligibility and enrollment operations. According to the guidance, states will have 12 to 14 months to perform redeterminations. DHHS will give a 60-day notice on when the PHE will end to help states prepare.

Considering the growth in Medicaid enrollment because of the FFCRA and the upcoming expiration of provisions, it will be interesting to see how many individuals will remain eligible to receive the Medicaid program's vital health care benefits. In some instances, the circumstances for some individuals will have improved, so they will no longer require assistance. Alternatively, some beneficiaries may be eligible for additional benefits. Eligibility redeterminations will certainly be a challenging task for Medicaid plans; however, it will be an opportunity to ensure that the most vulnerable populations are receiving benefits and that program resources are being used responsibly.

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MAY MEDICAID ROUNDUP

Syrtis Solutions publishes a monthly Medicaid news recap to help you stay informed. The monthly summary 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. Here is a summary of last month's important Medicaid news.

Read more here. 

APRIL MEDICAID ROUNDUP

Syrtis Solutions sends out a monthly Medicaid news recap to help you stay informed. The monthly recap highlights developments, research, 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.

Read the news summary. 

OUTDATED SYSTEMS AND LOW-QUALITY DATA ARE COSTING MEDICAID BILLIONS

 

The government doled out nearly $100 billion in "improper" Medicaid payments in 2021-- accounting for about one-fifth of all Medicaid payments, according to estimates.

The figure represents Washington's current accounting of payments that did not meet the numerous requirements for the Medicaid program, which the federal government manages in conjunction with the states and allows millions of low-income people access to healthcare.

The numbers were also high in 2020, with about $86.5 billion in Medicaid payments deemed improper, or just over 21%.

Medicaid provides healthcare coverage to nearly 80 million people, more than 30 million of which are children. The number of adults enrolled in the program has greatly risen recently, partly because of the pandemic, as well as Medicaid expansion under the Affordable Care Act (ACA).

Improper payments are not synonymous with fraud and abuse, according to analysts and the federal agency that oversees Medicaid and generates the data. "Instead, improper payments are payments that did not meet statutory, regulatory, administrative, or other legally applicable requirements and may be overpayments or underpayments," the Centers for Medicare and Medicaid Services (CMS) says. Improper payments also include payments that may have been valid but where there was not enough data on file at the time of the review to verify they were made properly, according to CMS.

The stunning stats are evidence of a swelling Medicaid regime with obsolete and largely varied state systems for tracking data. Furthermore, federal officials have been using updated criteria to review Medicaid eligibility over the last few years, making it challenging to compare current rates with those of years past.

The figures have nevertheless attracted scrutiny from government watchdogs looking to ensure that billions in tax dollars are being paid and tracked correctly. In February, the inspector general for the U.S. Department of Health and Human Services published a report outlining its past audits to help CMS "in achieving greater efficiencies in its operation of the Medicaid program."

The inspector general's review sampled four states (New York, California, Colorado, and Kentucky) and "found that these States did not always determine Medicaid eligibility" for both newly eligible individuals and those who qualify under old rules "in accordance with Federal and State requirements."

CMS reported actual monetary losses-- cases where officials identified a payment was, actually, erroneously made, were about $11 billion last year. Though it represents a small fraction of total Medicaid spending, it remains a cause for concern, experts say.

"Instead of twisting the [audit] results to fit an erroneous narrative of rampant beneficiary fraud, we should acknowledge that mistakes will be made and act to reduce identified errors collaboratively," Kelly Whitener, a professor at Georgetown University, wrote in 2019.

Missing documentation is another primary factor driving up improper payment rates, according to CMS's data. In 2021, 89% of improper payments were caused by insufficient documentation, representing more than $87 billion in payments. Of those, over half were linked to eligibility determination.

According to CMS reports, the Medicaid overpayment rate swelled from 9% in 2018 to 21% in 2020. In the 2020 report, CMS said that year's figures couldn't be compared to those before 2019, though, because that's when it implemented a key change in the eligibility rules it uses to audit payments.

The Payment Error Rate Measurement audit program (PERM) is what produces improper payment rates each year and operates on a three-year cycle. "CMS paused PERM eligibility reviews from 2015 to 2018, as states were implementing new rules under the Affordable Care Act for determining eligibility for many beneficiaries," the agency said.

Jessica Schubel, a senior policy analyst at the Center on Budget and Policy Priorities, said "most eligibility errors reflect paperwork problems or other procedural mistakes that can easily occur when eligible people enroll." For example, an incorrect code (where a state inadvertently assigns the parent eligibility code to an eligible child) is considered an improper payment. In another example, a caseworker could fail to determine if the enrollee has primary commercial coverage.

In general, the data and documentation problems within the Medicaid system mean that determining the actual fraud rate is challenging. "I don't know anyone who knows the answer. I certainly don't," Andy Schneider, a professor at Georgetown University said when asked what he believed the actual fraud levels were. All he knows, he said, is that "the rate of fraud varies from state to state" and "most of the state and federal government's losses from Medicaid fraud are attributable to providers or managed care plans, who receive Medicaid payments, and not to applicants or beneficiaries, who don't." "Of the 77 million Medicaid beneficiaries as of November 2021, 33 million, or over 40%, were children," he said. "Few of whom would even know what fraud was, much less commit it."

Medicaid improper payments have risen throughout the years and while PERM brings the problem into scope, it does nothing to reduce them. These payments often stem from fraud and abuse but the vast majority are actually a result of eligibility errors from antiquated systems and low-quality data. To reduce improper payments states and Medicaid plans must turn to data solutions to improve the coordination of benefits and identification of third party liability.

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