31 Aug BETTER COVERAGE DATA CAN STRENGTHEN MEDICAID PAYMENT INTEGRITY
Medicaid payment integrity depends on accurate, timely information being available when claims are processed. An August 2026 HHS OIG audit found continued shortcomings in federal payment integrity efforts and reported an increase in Medicaid’s improper payment rate for FY2025.
The HHS OIG report found Medicaid’s improper payment rate increased from 5.09% to 6.12% between FY2024 and FY2025. Auditors also determined that HHS had not demonstrated sufficient improvement in Medicaid payment integrity.
OIG’s findings reinforce a basic principle of payment accuracy: effective controls depend on having the right information at the right time.
Coverage Data Changes
This is particularly important for COB and TPL.
Medicaid beneficiaries can gain or lose employer-sponsored insurance or move between commercial health plans. As those changes occur, coverage information maintained by Medicaid programs can become incomplete or outdated.
That matters because federal COB/TPL requirements generally make Medicaid the payer of last resort and require states to take reasonable measures to identify third parties that may be legally responsible for beneficiaries’ healthcare expenses.
When coverage information is incomplete, the ability to properly coordinate a claim can be affected.
From Periodic Identification to Point-of-Payment Visibility
Traditional TPL processes often identify coverage through periodic data matching or after Medicaid has already paid a claim.
When another payer is identified afterward, recovery becomes necessary. Syrtis has previously examined the implications of Medicaid improper payments and reliance on pay-and-chase recovery.
Federal guidance distinguishes this retrospective process from prospective cost avoidance. CMS TPL guidance generally describes cost avoidance as pursuing a known liable payer before Medicaid payment and pay and chase as pursuing reimbursement afterward.
Improving coverage visibility at adjudication can increase opportunities for the former.
Use Data When It Matters Most
Real-time insurance discovery can supplement existing COB/TPL processes by identifying active third-party coverage closer to the point of payment.
For Medicaid programs and MCOs, that additional visibility can support more accurate coordination of benefits, stronger payer-of-last-resort compliance, and increased pre-payment cost avoidance.
Medicaid payment integrity depends not only on collecting coverage information, but on making that information actionable when payment decisions are made. Improving the timeliness and accuracy of third-party coverage data can help shift more payment integrity activity from retrospective recovery to prospective prevention.