SEPTEMBER MEDICAID NEWS

Syrtis Solutions distributes a monthly Medicaid news roundup to help you stay informed. The monthly roundup concentrates on developments, research, 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 significant Medicaid developments.

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NYRx PHARMACY BENEFIT CARVE OUT

 

Changes in how pharmacy benefits are supplied under New York's Medicaid program are coming. Earlier this year, the state reported that to lower prescription drug costs, it would carve out its Medicaid pharmacy benefits and transition to a fee for service delivery model. On April 1, 2023, Medicaid members will start receiving their pharmacy benefits under the state's new delivery model, NYRx.

New York's carve out strategy is designed to decrease pharmaceutical drug costs by consolidating the state's purchasing power. In addition to lowering costs, the carve out is also geared to improve access to care and reduce restrictions by introducing a single drug formulary.

The decision to carve out, however, has not gone unnoticed. Over the past year, there has been a growing amount of criticism directed at the state's decision. The advocacy organization, Save NY's Safety Net, wrote the state's governor earlier this month and requested that she reverse the decision. They are concerned over its impact on the delivery of healthcare to the state's most vulnerable populations. They also warned the governor that the carve out would negatively affect the Medicaid program's provider network. According to the coalition, "many existing facilities will be forced to close completely, and hundreds of frontline community healthcare workers will lose their jobs."

Advocates of the carve out, like New York state Assemblyman John McDonald, disagree with the advocacy groups. He strongly believes that the shift will help more program recipients than it hurts.

According to the New York State Department of Health, "moving all Medicaid consumers under the FFS Pharmacy Program allows for a single, uniform list of covered drugs and standardized, consistent rules and regulations. Thus, New York State is able to offer an improved, simplified process for Medicaid consumers to get the medicines and supplies they need."

Each year prescription drug spend accounts for a larger percentage of state budgets. To reduce these costs, some states like New York have chosen to transition to fee for service models and carve out pharmacy benefits. While this is one approach to try and reduce costs, states should also identify opportunities to improve efficiency and cost avoid in their Medicaid plans.

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AUGUST MEDICAID NEWS RECAP

 

Syrtis Solutions delivers a monthly Medicaid news recap to help you stay up-to-date. The monthly recap focuses on developments, analysis, and legislation that relates to Medicaid integrity, cost avoidance, coordination of benefits, improper payments, fraud, waste, and abuse. Here is a recap of last month's noteworthy Medicaid news.

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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.

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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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