As today’s health plan market becomes more aggressive and markets narrow, payment integrity (PI) is taking on more importance as both a key challenge and an opportunity to improve efficiency, savings and member experience. Meanwhile, improper Medicaid payments, such as for ineligible patients or for services not provided, were estimated to be $36.2 billion in fiscal 2018, accounting for 9.8% of Medicaid spending.
In this increasingly complex and costly environment, the Centers for Medicare & Medicaid Services (CMS) is tuned in to the importance of Payment Integrity (PI). Medicaid PI activities have led to substantial recoveries, including $785 million in combined federal and state share recoveries reported by states for FY 2017. Meanwhile, determining primacy has become even more complex because of the increasing number of members with multiple coverage.
According to the CMS, about 12 million people were enrolled in both Medicaid and Medicare in 2017. Over one-third of dual eligibles were enrolled in Medicare managed care in 2017, compared with 11% in 2006.
A neutral, prospective approach to payment integrity should include access to secure, frequently updated health plan data on millions of members across the country. With this type of solution, health plans can quickly and reliably determine their own coverage responsibilities without needing to involve their members in the process, create provider abrasion and increase cost avoidance by as much as 31%.
In addition, evolving health care policies mean complex, changing rules that differ by state as Medicaid expands in some states but not in others. Even worse for health plans than the financial consequences is that poor coordination of benefits also creates a negative experience for both members and providers. Patients have a frustrating, confusing experience when COB isn’t done right, and there is provider abrasion because of unnecessary burdens and inefficiencies under the recovery payment model. As a result, robust PI and coordination of benefits (COB)/third-party-liability (TPL)are essential, particularly for Medicaid and managed care organization (MCO) payers.
Medicaid and Medicare managed care plans stand to benefit from significant cost savings through comprehensive and coordinated PI functions. Payment Integrity initiatives are estimated to save these plans between $124 and $153 per member, per year. On an operational level, PI brings together disciplines that traditionally operate in silos to form a more complete, focused and effective operations unit. Providers reduce unnecessary burden and have a more positive experience with the health plan. Most importantly, members have a smoother, less- stressful experience and are not put in the middle of payers’ COB/TPL compliance efforts. Where does effective COB/TPL start? The first step to solving COB challenges, staying compliant and demonstrating value is to develop a prospective approach and source of data to use in COB operations. Lack of a comprehensive and current data source is one of the most common mistakes health plans make in their efforts.
The road map to better COB/TPL includes the following best practices:
Implement a neutral, prospective data solution. Health plans need a neutral, prospective solution with access to a national coverage database of health plan data, updated weekly. It should identify data for the exclusive benefit of the plan and should focus on using that data for claims payment prevention, rather than recovery. It should also charge a predictable, per member annual fee and should not charge a recovery fee or have any other incentive for inefficiency, advises Morgan Tackett, group product manager for CAQH.
Health plans need a neutral, prospective solution with access to a national coverage database of health plan data, updated weekly. Electronic data-matching software alone is unreliable, and often results in the use of outdated health plan data. Plans need a solution that is HIPAA- compliant with strong administrative, technical and physical safeguards to maintain patient privacy. It must also be updated frequently and securely.
Develop a detailed strategy for proactive, prevention activities: Plans need a detailed, effective strategy to flag and prevent improper payments before they happen. Create a comprehensive process for managing the volume of data that a high-quality source can provide. Accessing data isn’t enough; COB/TPL relies on effective management of that data at scale. CAQH – a non-profit alliance of health plans offers COB Smart to address these payment integrity challenges. This tool offers health plans exclusive access to a national coverage database that is updated weekly with eligibility and enrollee data on more than 175 million covered lives sourced directly from participating health plans. It uses patient-matching logic to ensure accurate data, achieving a 99% match accuracy rate, while a built-in primacy engine determines the order of benefits responsibility.
Develop partnerships for direct, seamless communication with other health plans. Effective COB/TPL directly benefits from communication and collaboration among health plans. One example of this type of solution is CAQH simple, web-based COB Smart Portal. Data in the portal is updated weekly and gives users quick access to all information on a member and any associated members (e.g. dependents) including employer group information, Medicare information and demographic details. Plans communicate directly with other plans and can turn a 5-hour investigation into 20 seconds through the portal.
Ingber G., Kirkpatrick Dr. S., Milbourn III, G., Shirk, W. B., Stehle, J. 2017. PAYMENT INTEGRITY: What Motivates Entities Making Payments and Claimants to Optimize Ongoing Payment Integrity Efforts? Retrieved October 13, 2019 from https://www.mitre.org/sites/default/files/publications/payment-integrity-17-3400.pdf
Optum 2014. Maximize Savings With An Enterprise Payment Integrity Strategy. Retrieved October 12, 2019 from https://www.optum.com/content/dam/optum/resources/brochures/Payment_Integrity_Best_Practic- es_20WP482014.pdf
Centers for Medicare & Medicaid Services 2019. NHE Fact Sheet. Retrieved October 12, 2019 from https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpendda- ta/nhe-fact-sheet.html
HMS Advisory Services 2017. Optimizing Payment Integrity Results in Medicaid and Medicare Managed Care. Retrieved October 10, 2019 from https://hms.com/wp-content/uploads/2017/07/hms-white-paper-pi-results.pdf
CAQH, a non-profit alliance, is the leader in creating shared initiatives to streamline the business of healthcare. Through collaboration and innovation, CAQH accelerates the transformation of business processes, delivering value to providers, patients and health plans.