FEBRUARY MEDICAID NEWS ROUNDUP

Syrtis Solutions sends out a monthly Medicaid news roundup to help you stay informed. The monthly summary focuses 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 list of last month's important Medicaid developments.

Click this link to open the news from February.

MEDICAID ENROLLMENT FORECASTED TO RETURN TO 71 MILLION

Medicaid enrollment is being significantly affected because of the expiration of the continuous enrollment condition authorized by the FFCRA. Since April, millions of people have been disenrolled from the program. Simultaneously, millions of others have either re-enrolled or enrolled in the program for the very first time. 

State data shows that roughly 9.5 million people have been removed from Medicaid since enrollment peaked last April. This trend suggests that Medicaid should go back to its pre-pandemic program size of 71 million members after the unwinding.

Churn in enrollment has long been characteristic of Medicaid. Before the pandemic, an estimated 1 million to 1.5 million people dropped off Medicaid rolls each month.

Many individuals are being disenrolled within a condensed timeframe during the unwinding process. In some states, the situation has proven to be more severe than expected.

The Biden administration at first projected that approximately 15 million individuals would lose coverage during the unwinding phase. However, their estimate was conservative compared to the present data. According to KFF, disenrollments are expected to surpass 17 million, with procedural issues accounting for 70 percent of these instances.

However, roughly two-thirds of the 48 million Medicaid beneficiaries who have undergone eligibility reviews thus far have successfully had their coverage renewed, while about one-third have lost it.

There are, however, significant variations in how enrollment is being affected among states. For instance, Oregon only disenrolled 12 percent of its beneficiaries. KFF reports that 75 percent were successfully renewed, while the remaining cases are still pending. Oklahoma disenrolled 43 percent of its program recipients during the unwinding phase, renewing coverage for only 34 percent. About 24 percent of cases are still pending.

States have varied eligibility requirements, with some implementing policies that make it much easier for members to remain enrolled. For instance, in Oregon, children can remain on Medicaid until the age of 6 without needing to reapply, while all other individuals receive up to two years of coverage regardless of income fluctuations.

Industry experts have expressed ongoing concern about the sharper decrease in Medicaid enrollment among children contrasted to usual trends. This is especially troubling since children usually qualify for Medicaid at higher household income limits than their parents or other adults. According to the latest data from Georgetown University, over 3.9 million children have experienced a loss of Medicaid coverage during the unwinding. 

Utah is the only state to survey those who were disenrolled and found that somewhere around 30 percent were uninsured. Many others obtained employer health coverage or enrolled in subsidized plans through the ACA.

The termination of the continuous enrollment requirement has caused a tremendous impact on Medicaid enrollment. It marks the most significant health coverage transition event since the first open enrollment period of the ACA. Because of varying eligibility requirements across the country, some states are being affected more than others. As they navigate the second half of the unwinding phase, states must make every effort possible to relay enrollment status changes to their program recipients and ensure that their vulnerable populations do not lose coverage. 

Read more here.

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.

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$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.

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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.