01 Feb MEDICAID TPL TECH SOLUTION PRESENTS A CONSIDERABLE SAVINGS OPPORTUNITY
Dependence on the Medicaid program has increased exponentially over time. Currently, it is the single largest insurer in the United States, and in 2019, it accounted for more than half of all federal funds distributed to states. Regrettably, as the safety net program has grown, waste has also become more rampant. Improper payments are costing the program billions of dollars every year.
Despite being on the GAO’s High Risk List since 2003, Medicaid’s improper payment rate continues to surge and put more strain on budgets. In 2018, the program’s improper payment rate was at nine percent, and by 2020 it had increased to twenty-one percent. That equates to a staggering $143 billion. However, according to analysts, these numbers are conservative estimates that do not take into account all the needed data. In reality, the improper payment rate is believed to be closer to twenty-seven percent or $100 billion annually.
Initiatives to Lower Improper Payments
Fiscal integrity has been problematic for Medicaid since its inception. So much so that over the last fifty years, various policy and legislative initiatives have occurred to focus on improper payments. These efforts primarily assess the risk of fraud, estimate the impact of TPL, increase reporting criteria, and increase data sharing. However, while these measures help bring the problem into scope, they do nothing to prevent the improper payment rate from rising.
Apart from these legislative efforts to manage costs, some policymakers have recommended transforming how the Medicaid program is funded to reduce waste. They think that Medicaid should be incentivized to use funding more responsibly and efficiently. One thought is to implement block grants. These grants would consider the size of the eligible population within a state and give the states the ability to disperse the funds with minimal oversight from the federal government. The states would be responsible for ensuring that the appropriate care is being delivered to plan members and that program resources are not wasted. Another suggestion is for Congress to establish tax-free health savings accounts to lessen the dependence on Medicaid and increase access to health care for those in need. The accounts would be financed with the savings achieved from reducing waste in the Medicaid program.
Reducing Improper Payments with Medicaid TPL Technology Solutions
While policymakers think about program reform, one area of opportunity to considerably reduce costs exists within Medicaid’s coordination of benefits. Presently, the majority of Medicaid’s improper payments actually stem from bad quality data and inefficient TPL processes, not deliberate fraud and abuse. Payers of last resort struggle to identify primary coverage on pharmacy and medical claims. Most of the data they have access to is not current, available, complete, or accurate. Consequently, plans have no choice but to pay claims in error and chase reimbursement once other health insurance (OHI) is discovered. Unfortunately, the actual funds recovered are around twenty cents on the dollar.
Syrtis Solutions realized that Medicaid plans needed a means to identify active OHI coverage so that claims could be adjudicated correctly. In 2010, they introduced ProTPL, a real-time point of sale cost avoidance service for the payer of last resort market. ProTPL supplies powerful and accurate eligibility data that can be acted upon. The solution gives plans the ability to cost avoid pharmacy and medical claims and the related costs of recovery. Furthermore, the coverage identified by ProTPL can not be found by other vendors. Syrtis Solutions is able to do this by checking claims against the nation’s largest and most complete active healthcare coverage information database. Customers who implement the tool see an average 25% increase in OHI discovery. This means Syrtis’ customers get the best and latest eligibility responses when they need them.
In March, Medicaid enrollment reached nearly 75 million people, and that number continues to climb. As a result, the chances for waste and improper payments are likely to increase also. This is problematic considering that Medicaid is losing billions of dollars every year in improper payments already. Due to strained budgets, program integrity issues, and enrollment surges, some policymakers and states are considering innovative ideas and program reform to reign in costs and reduce waste. While these initiatives are being looked into, they have yet to be implemented. Right now, one of the most significant opportunities for reducing Medicaid’s improper payments lies within the coordination of benefits. Plan administrators should look to TPL technology solutions for additional efficiency and cost avoidance opportunities.