01 Feb MEDICAID TPL AND IMPROPER PAYMENTS LEGISLATION
Over the last 56 years, Medicaid has helped deliver health services to the most vulnerable populations in the United States. As member enrollment surges, Medicaid TPL and fiscal accountability have been problematic. To resolve these challenges, numerous legislative efforts have taken place to curb fraud, waste, and abuse. However, these measures have done little to protect program integrity and Medicaid’s improper payment rate continues to climb.
Improper Payments and Medicaid TPL Legislation
The federal government’s efforts to combat improper claims payments and improve TPL processes fall into four categories:
- Evaluating the risk of fraud
- Determining the impact of TPL
- Calling for more reporting
- Data sharing
Here is an overview of the legislation aimed towards improving Medicaid TPL and reducing improper payments.
1974 – ERISA
Congress passed the Employee Retirement Income Security Act (ERISA) in 1974. This legislation was directed at self-insured companies to ensure that they abided by the same health insurance requirements as other large group plans. Additionally, it placed them under Medicaid TPL stipulations.
2002 – IPIA
The Improper Payments Information Act (IPIA), passed in 2002, required agencies to actively identify programs or activities susceptible to high levels of improper payments. Agencies were now expected to make an annual report to Congress relating to overpayments or underpayments and measures taken to address such issues. In compliance with the IPIA, the Payment Error Rate Measurement (PERM) was created. PERM reviews Medicaid and CHIP data to measure improper payments and determine program-level error rates.
2005 – The Deficit Reduction Act
The Deficit Reduction Act (DRA) added more entities to the list of those considered third parties. By law, all entities identified as third parties are mandated to follow Medicaid TPL processes, which includes supplying beneficiary eligibility data to states (much like ERISA dictates for self-insured plans).
2006 – Medicaid Integrity Program
The DRA also introduced the Medicaid Integrity Program (MIP) under section 1936 of the Social Security Act. The MIP was the first extensive federal initiative to deal with fraud, waste, and abuse. It allowed contractors to review provider activities, audit claims, identify improper payments, and educate providers on integrity issues. It also provided support to states to address fraud and abuse.
2008 – Qualifying Individual Program Supplemental Funding Act
The Qualifying Individual (QI) Program Supplemental Funding Act of 2008 modified state participation criteria of the Public Assistance Reporting Information System (PARIS). It called for states to link their eligibility systems through PARIS, providing data for matching purposes across participating entities. CMS found that beneficiaries crossing state lines were one source of improper payments because a system did not exist for states to exchange data and “match” beneficiary information.
2009 – Executive Order 13520
Executive Order 13520 was an attempt to decrease Medicaid improper payments. It aimed to improve efforts to eliminate payment errors, waste, fraud, and abuse while simultaneously ensuring that Medicaid and other federal programs would continue to serve their beneficiaries. EO 13520 tracked federal programs with the highest dollar amount of improper payments and established reduction and recovery target rates.
2010 – Improper Payments Elimination and Recovery Act
Congress passed the Improper Payments Elimination and Recovery Act of 2010 to increase data sharing, coordination between state agencies and third parties, and increase reporting criteria. Some of the measures taken include:
- Amendment of the IPIA to call for the leader of each federal agency to review and determine vulnerabilities in their programs that could lead to improper payments
- Modifications of the criteria related to improper payment estimations
- Requirement of a statement from agencies regarding whether it has ” sufficient resources with respect to internal controls, human capital, and information systems and other infrastructure to prevent improper payments”
2015 – Fraud Reduction and Data Analytics Act
The Fraud Reduction and Data Analytics Act called for the Office of Management and Budget to develop new guidelines for federal agencies to enhance TPL management. Under the legislation, agencies needed to “establish financial and administrative controls to identify and assess fraud risks.” Furthermore, agencies were expected to submit annual reports to Congress regarding their progress on these efforts.
2015 – Federal Improper Payments Coordination Act
Congress also passed the Federal Improper Payments Coordination Act in 2015. It addressed administrative operations, reporting requirements, and data-sharing to improve TPL and cost avoidance. Under the legislation, the judicial branch, legislative branch, and state government agencies managing federal programs were authorized to use the U.S. Treasury Department’s Do Not Pay Program.
2015 – Medicare Access and CHIP Reauthorization Act
The Medicare Access and CHIP Reauthorization Act of 2015 featured several sections relevant to Medicaid programs, including a section impacting TPL data sharing. It instructed the Secretary of HHS to explore “incentives for states to work with the Secretary under the Medicare-Medicaid Data Match Program.”
ProTPL Saves Medicaid TPL Millions
Discovering Medicaid TPL is very challenging for program administrators as they deal with bad quality data that is not up to date, usable, or correct. Since they are unable to effectively identify TPL before claims are paid, improper payments are costing Medicaid billions of dollars. Medicaid plans agree that cost avoidance makes more sense than pay and chase, but the ability to execute it effectively has not been widely available. Now, with the help of Syrtis Solutions’ ProTPL, payers of last resort are able to cost avoid pharmacy and medical claims on the front end. Their solution, ProTPL, reduces the need for recovery and the associated expenses while cost avoiding payments. Those involved in the process of Medicaid claims adjudication have been working with the best tools they had available. Now, they have new and better tools through Syrtis.