$36 BILLION IN IMPROPER MEDICAID PAYMENTS IN 2016

For the fourth straight year, the federal government increased the amount of money described as improper payments. The Government Accountability Office is reporting that agencies exceeded $144 billion in improper payments in fiscal 2016, up from $137 billion in 2015.

This escalation translates to a higher improper payment rate as well, up to 4.67 percent of all outlays from 4.39 percent last year. Regardless of the increase, the rate still is half a percent lower than when President Barack Obama entered office in 2009, U.S. GAO said.

" This increase between FY 2015 and FY 2016 can be attributed to percentage and dollar increases in the Medicaid Program, the Direct Loan Program, the Medicare Part C Program, the Pell Grant Program, the VA Community Care Program, and the Earned Income Tax Credit (EITC) Program," U.S. GAO mentioned in the report released January 12. "For fiscal year 2016, federal entities reported improper payment error rates that exceeded 10 percent for 11 risk-susceptible programs, accounting for more than 70 percent of the governmentwide improper payment estimate."

GAO states the Medicare Fee for Service (FFS) program accounted for the largest amount of improper payments-- $41 billion or 28 percent of the governmentwide total. Medicaid was the second with $36 billion or 25 percent of the governmentwide total while the EITC and Medicare Part C joined account for the third with $33 billion or 23 percent of the governmentwide total.

On the positive side, The GAO claimed the government recovered about $20 billion in overpayments last year. To be clear, an improper payment does not suggest the federal government overpaid a beneficiary or another customer. An improper payment could signify someone was underpaid as well.

" Approximately $44 billion of the governmentwide improper payments in fiscal 2016 are caused by insufficient documentation. A lack of supporting documentation could be a situation where there is a lack of supporting documentation necessary to verify the accuracy of a payment identified in the improper payment testing sample such as a program not having the documentation to support a beneficiary's eligibility for a benefit," GAO stated. "Approximately $34 billion of the governmentwide improper payments in fiscal 2016 were caused by the inability to authenticate eligibility." The GAO explains the inability to authenticate eligibility is a problem where the agency can't identify if the citizen is eligible to prevent a payment.

The OMB has been pushing for agencies to employ more and better data and other approaches to decrease improper payments.

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MEDICAID’S WASTEFUL SPENDING – THE NUMBERS

The CMS has seen an extraordinary surge in improper Medicaid payments and suggests the Affordable Care Act might be the reason. The Medicaid improper payment rate has vaulted from 5.8% or $14.4 billion in fiscal 2013 to 9.78% or $29.12 billion in fiscal 2015, according to an HHS financial review.

An improper payment might occur when funds go to the incorrect recipient, the Medicaid enrollee has other primary insurance coverage, information is not available to support a payment or the recipient uses funds in an inappropriate manner. The tally incorporates fraudulent claims but is by no means a measure of fraud.

In a post on the CMS blog, chief medical officer Dr. Patrick Conway notes, "When we talk about improper payments, it's important to remember what they are and why they happen. To be clear, improper payments are not typically fraudulent payments."

Dr. Conway goes on to explaining the jump, attributing the increase to challenges that state organizations are having with new provider enrollment and screening guidelines under the Affordable Care Act. Without having these new requirements, the Medicaid improper payment rate would have dropped to 5.1%, Conway said.

" We often see such increases when new requirements take effect, as states and providers often need time to modify their operations in order to comply with the updated standards," Conway said. "We believe, however, that these requirements will ultimately strengthen the Medicaid and CHIP programs, and that the improper payment rates will again decrease with state and provider experience."

So far, Medicaid Recovery Audit Contractors (RACs) are actually providing little assistance to states in recovering improper payments. States were obligated to employ Medicaid RAC programs by Jan. 1, 2012, under the Affordable Care Act. Recoveries amounted to $57.71 million in fiscal 2015, up slightly from $55.1 million in fiscal 2014, according to the review. The audit does not clarify why the RAC recoupment is so low, however, it does raise concerns as to why the emphasis remains on post-payment recovery versus the application of technological innovations to avoid paying claims in error.

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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.