Pandemic Response Drives Relaxation of Claims System Rules
The initial sweep of the COVID-19 pandemic was a public health emergency (PHE) that required ongoing adaptive action from public health officials, including leaders at the Centers for Medicare & Medicaid Services (CMS), the Centers for Disease Control (CDC), and state Medicaid agencies.
Amid the crisis, strict eligibility requirements and benefits protocols that once protected programs, beneficiaries, and taxpayers alike now became undue burdens for those seeking access to health care services and programs. Alongside misinformation and uncertainty around the new and deadly virus, already vulnerable populations faced sudden, pronounced challenges in getting medications and receiving services.
In response, state Medicaid agencies altered their Medicaid claims adjudication systems, disabling or easing claims processing edits and thereby expanding benefits and making payments faster. Certain edits that previously denied claims and flagged errors or issues for review now allowed more claims to pass through the payment system. Further, disabling the eligibility system edits served to prevent terminations as well as interrupt and prevent completion of renewals. Program integrity oversight was relaxed due to staffing limitations and the incentive to not disrupt care and continue making payments regardless.
PHE Unwinding Prompts Return to Greater Diligence
Now that the PHE is unwinding, these disabled edits — the altered switches and levers that remain in the claims adjudication system as outdated artifacts — may need to be re-enabled to ensure program integrity and to protect against fraud, waste, and abuse. State programs across the nation differ from one another, each with its own unique features and requirements. And because these changes likely occurred in every state, the ongoing issues and potential problems are pervasive.
However, adjusting these systems while accounting for nearly three years of coding and payment methodology updates is no simple mandate.
Much more complex than merely flipping switches, changing various state claims adjudication engines to more stringent standards means careful scrutiny, evaluating each requirement and associated edit, both individually and against the backdrop of the larger system. Getting it wrong means wasted taxpayer funds, significant payment issues for providers, increased FWA, and compromised benefit programs. Getting it right requires meticulous and proven benefits testing.
Guidance What Happens if States Do Nothing
Leaving these PHE edits in the pandemic scenarios may allow payments for non-eligible services, members, or providers. States might be left shouldering the burden of the federal share of funds paid for non-eligible services and members, ultimately draining funding for these and other programs that benefit fragile populations.
The Program Integrity Solution: Benefits Testing
Underpinned by intensive data analytics and claims policy experts, our benefits testing includes a predictive analysis component encompassing scenarios that generate a more fine-tuned response in identifying potential payments that do not align with policy. Some scenarios are simple mistakes that can be easily remedied by enabling a system edit; others are potential provider-generated fraud, waste, or abuse that need to be elevated to the state’s program integrity unit or Medicaid fraud department. The key to success is understanding complex coding and reimbursement methodologies, and knowing how to apply analytics to connect the dots for our clients.
Consider the Case Study that follows. We explain the complex needs of one of our state clients, which sought to enforce program integrity and protect against FWA through rigorous and disciplined benefits testing.
A Real-Life State Medicaid Agency Example:
Myers and Stauffer was engaged by the state client to assist with evaluating benefits paid through the state Medicaid and Children’s Health Insurance Program (CHIP). The benefits testing project uses specific agreed-upon processes to assist the agency with testing claims paid through their claims adjudication system. This process includes a computation of the financial liabilities and receivables related to incorrectly paid fee-for-service (FFS) claims and capitation payments made during a state fiscal year (SFY). Based on the outcomes from applying these procedures, the agency determines the need to make adjusting journal entries to their financial statements. Based on identification of errors and the recovery of incorrect payments, this engagement also helps the agency prevent future payment errors through modifications to the claims payment system, correcting issues identified through the testing. The testing procedures are updated annually, or as needed, to address additional issues and analyses requested by the agency.
- Testing and repricing of paid claims to identify claims that may not have been paid in accordance with Medicaid and CHIP coverage and payment policies. These claims may be randomly selected based on sample sizes approved by the agency or based on claims identified for a focused analysis.
- Identification of payments that should not have been made, such as duplicate payments or for ineligible members
- Identification of other amounts that should have been paid but were not.
- Identification of and/or quantification of payment errors in the universe of paid claims for selected categories of incorrect payments or as otherwise directed by the agency.
We have assisted in the identification of enhancement opportunities to claims adjudication system edit and audits, identified millions of dollars in overpayments for collection, and prepared estimates of the agency’s annual financial liabilities and receivables related to paid claims, capitation payments, and administrative fees. We deliver an annual report that can be relied upon by financial statement auditors to complete an annual audit of financial statements. In SFY 2015 alone, our analyses identified approximately $31 million in potentially recoverable payment errors. This amount includes payment errors made for both FFS claims and capitation payments.