MARCH MEDICAID NEWS

Syrtis Solutions sends out a monthly Medicaid news summary to help you stay up-to-date. The monthly recap concentrates 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 significant Medicaid news.

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FEBRUARY MEDICAID NEWS RECAP

 

Syrtis Solutions delivers a monthly Medicaid news summary to help you stay informed. The monthly roundup concentrates on developments, analysis, and legislation that pertains to Medicaid integrity, cost avoidance, coordination of benefits, third party liability, improper payments, fraud, waste, and abuse. Below is a summary of February's Medicaid news.

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JANUARY'S MEDICAID NEWS

 

Syrtis Solutions publishes a monthly Medicaid news summary to help you stay informed. The monthly summary focuses on developments, research, and legislation that relates 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 Medicaid developments.

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MEDICAID'S BATTLE WITH IMPROPER PAYMENTS

 

Improper payments, fraud, and waste cost the Medicaid program billions of dollars each year. In 2020 alone, Medicaid improper payments totaled $86.49 billion. These payments make up more than twenty percent of federal Medicaid expenditures, and one out of every four Medicaid dollars is spent improperly.

Since 1965, Medicaid has provided healthcare to the country's most vulnerable populations. In 2010, the ACA broadened program eligibility and raised the federal government's match percentage. Two years later, states had the ability to choose whether they would expand their programs under the ACA. Since then, thirty-eight states and Washington D.C. have expanded their Medicaid programs, and over seventy million people are enrolled. Medicaid has become the single largest insurer in the United States.

As reliance on Medicaid has grown, improper payments have only become more problematic. Eligibility errors, poor quality data, and outdated methodologies are costing the program billions of dollars every year. In 2019 an approximated 2.5 million Medicaid enrollees were actually ineligible. According to CMS, several states do not verify enrollee eligibility since there is "insufficient documentation to affirmatively verify eligibility determinations." Additionally, the GAO has placed Medicaid on its High-Risk List since 2003 due to improper payments.

Currently, Medicaid accounts for one-quarter of most state budgets, and 2021 estimates suggest that the program's share will only increase. In order for the safety net program to remain fiscally solvent as enrollment climbs and eligibility expands, states and Medicaid plans need to implement cost avoidance solutions to protect resources and mitigate improper payments.

By law, Medicaid is the payer of last resort. This means that if a recipient has healthcare coverage through any other third party, that third party must pay its legal liability first. If any liability remains, the Medicaid plan will then pay. Having said that, Medicaid plans routinely pay pharmacy and medical claims that are the obligation of a third party because they do not have access to reliable or accurate eligibility data. Unfortunately, this has been an issue for over ten years. In 2012, HHS Regional Inspector General Ann Maxwell testified before Congress and explained, "much of the data used to identify improper payments and fraud is not current, available, complete, [or] accurate."

Syrtis Solutions (Syrtis) recognized the need for a solution that would reduce improper payments in the Medicaid program. Syrtis is unique because it utilizes e-prescribing eligibility data to provide the payer of last resort market with a technology-based solution to cost avoid pharmacy and medical claims prospectively. Their solution provides plans with the data they need to coordinate benefits effectively and cost avoid on claims that are the liability of a third party. Medicaid plans that have implemented the new tool are saving resources by optimizing their adjudication processes' efficiency.

2020 demonstrated the importance of the Medicaid program, and enrollment data indicates that reliance on Medicaid for healthcare coverage will only rise in 2021. As an increasing number of Americans rely on Medicaid, the program cannot afford billions in improper payments. States and Medicaid plans must take steps to cost avoid and improve the efficiency of their Medicaid programs.

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THE MEDICAID PROGRAM IN 2021

The Coronavirus pandemic and the resulting economic recession accentuated the importance of the Medicaid program last year. By February, the Medicaid enrollment rate increased to 7.4 percent, and 76.5 million people were enrolled in the jointly funded program. In 2021, the new Biden administration, economic climate, and ongoing public health crisis are sure to impact the safety net program. Some of the crucial areas to monitor in the new year will be enrollment, coverage, eligibility, Section 1115 demonstration waivers, and program financing. Here is an overview of what to expect and what state Medicaid plans can do to curb costs.

MEDICAID PROGRAM ENROLLMENT, COVERAGE, ELIGIBILITY

Millions of Americans became unemployed and lost their employer-sponsored healthcare coverage as a result of the pandemic. In response to the public health emergency, the Families First Coronavirus Response Act (FFCRA) was implemented to protect eligibility standards and provide continuous coverage to current Medicaid beneficiaries. The provisions of the FFCRA are due to expire in April but can be extended by Congress.

President Biden has proposed changes to the ACA that would expand coverage. The first proposal is to increase ACA marketplace premium assistance, and the second is to introduce a public option plan similar to Medicare. This plan would provide coverage automatically to low-income individuals in states that did not expand their Medicaid programs. Additionally, the new administration has plans to reduce the coverage gap by substituting the 90% Medicaid federal match rate with a temporary 100% increase.

Along with the Biden administration's initiatives, there are two bi-partisan efforts to expand Medicaid coverage in Congress.. H.R. 4996, Helping MOMS Act of 2020, will enable states to provide one year of postpartum coverage under Medicaid. It also removes the cap on the total rebate amount for single source and innovator multiple source drugs under the Medicaid Drug Rebate Program. H.R. 1329, Medicaid Reentry Act, will allow Medicaid payment for medical services provided to an incarcerated individual during the 30-day period prior to the individual's release.

SECTION 1115 DEMONSTRATION WAIVERS

Section 1115 demonstration waivers make it possible for states to forgo key provisions of federal Medicaid law and the flexibility to shape their own Medicaid policies to accommodate their unique priorities. These waivers must adhere to statutory requirements, are required to be budget neutral to the Federal government, and are permitted for an initial five-year period. Under the Trump administration's time in office, demonstration waivers included changes such as work requirements and eligibility restrictions. The new administration will most likely undo these waivers and rework the demonstration waiver policy while issuing new state guidance. Under the new administration, Section 1115 wavers are expected to advance public option proposals, make coverage more affordable, and broaden program eligibility.

STATE MEDICAID FINANCING

The pandemic driven recession has caused significant budget strains for states. To offset these deficits, states depend on the Federal government for relief to preserve their Medicaid programs. In the current public health crisis, the federal match percentage was raised to 6.2 percent. This provision was featured in the FFCRA and was extended through June 2021. While President Biden supports increasing the FMAP, it cannot be accomplished exclusively by administrative action. To raise the FMAP, the new administration will need legislation from Congress or a simple majority vote from the Senate in a budget reconciliation bill.

FURTHER EFFICIENCY AND COST AVOIDANCE

In addition to federal assistance and budget cuts, states generally curb costs by reducing Medicaid benefits, decreasing provider rates, and introducing restrictions. However, these approaches to lowering costs are prohibited due to MOE protections under the FFCRA. With that said, states should focus on cost avoidance technology solutions and additional efficiency in their Medicaid plans.

One area in particular where states could realize significant savings is in program oversight and mitigating improper payments. According to CMS, FY 2020 Medicaid improper payments totaled $86.49 billion. The vast majority of these improper payments take place in the coordination of benefits because Medicaid plans struggle to identify liable third parties of pharmacy and medical claims. Medicaid plans do not have access to reliable, complete, and accurate data, so they cannot help but make claims payments in error, and it costs them millions.

Medicaid enrollment has surged over the last year, and because of the ongoing public health emergency, it's not clear as to when enrollment numbers will taper back. As dependence on the safety net program increases, the new administration and states will need to consider policy and program changes to ensure healthcare coverage for the most vulnerable while also preserving the program's resources. States must look to improving efficiency and cost avoidance before reducing access to care and benefits.

Until recently, Medicaid administrators have struggled with ensuring that pharmacy and medical claims are paid properly. With the introduction of ProTPL, Medicaid plans no longer have to struggle with TPL discovery. If you are interested in details on how you can greatly improve the efficiency of your plan and save on claims paid in error, contact Syrtis Solutions.

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DECEMBER MEDICAID NEWS ROUNDUP

 

Syrtis Solutions issues a monthly Medicaid news roundup to help you stay up-to-date. 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. Here is a summary of December's notable Medicaid news.

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MEDICAID IMPROPER PAYMENTS REACH $86.49 BILLION

Medicaid is the single largest payer of health care in the country. As the program has increased in size and scope, it has dealt with fraud, waste, abuse, and improper payments. Over the years, there have been several federal initiatives to rein in costs; nevertheless, Medicaid has remained on the GAO's High-Risk List since 2003. Last month, CMS reported on fiscal year 2020 Medicaid estimated improper payments.

CMS recently announced, "the FY 2020 national Medicaid improper payment rate estimate is 21.36 percent, representing $86.49 billion in improper payments." Improper payments in the Medicaid program now account for more than twenty percent of federal Medicaid expenditures and one out of every four Medicaid dollars is spent improperly.

CMS estimated FY 2020 Medicaid improper payments with the PERM program by examining claims submitted between July 1, 2018 and June 30, 2019. They noted that the 2020 estimates are not comparable to previous years due to the reintegration of the PERM eligibility component. In the most recent report period, adjustments were made to include ACA requirements. The report revealed that eligibility errors are driving Medicaid improper payments. In many cases, program recipients are ineligible either because of their income or they are not lawful residents. The report cited the following as the primary contributors to the rise in improper payments:

• Eligibility errors from insufficient documentation to confirm eligibility determinations and non-compliance with redetermination requirements.
• Non-compliance with provider revalidation of enrollment and rescreening.
• Non-compliance with provider enrollment, screening, and NPI criteria.

While reporting on improper payments brings the problem into focus, it does nothing to mitigate them. States and Medicaid plans must find ways to strengthen program oversight to minimize payments made in error.

It is important to note that improper payment rates are not necessarily indicative of fraud. Actually, many improper payments are the result of low quality data and outdated methodologies. This is evident when states attempt to coordinate benefits but struggle to identify liable third parties of pharmacy and medical claims. Currently, the majority of the data that states access for TPL discovery is not current, available, complete, or correct. Without reliable, complete, and accurate data, Medicaid plans cannot help but make claims payments in error.

Syrtis Solutions (Syrtis) saw the need for a remedy to reduce the improper payment rate within the Medicaid program. Syrtis is unique in that it uses e-prescribing eligibility data to provide the payer of last resort market with a technology-based solution to prospectively cost avoid pharmacy and medical claims. By implementing ProTPL, Medicaid plans can maximize the efficiency of their adjudication processes while saving valuable resources.

Millions of Americans are looking to Medicaid for health care because of the pandemic driven recession. Simultaneously, improper payments are costing the program billions of dollars when resources are needed most. Moving forward, accurately identifying claims before they are paid, and cost avoidance measures will be critical steps to maximizing program efficiency.

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