While Medicaid focus on mere member eligibility, the MCOs reap the benefit
The attitude, the opportunity and the environment together bolsters certain individuals to abuse the healthcare system. When it comes to ineligible beneficiaries, fraud permeates in different dimensions from eligibility abuse and card sharing to Doctor shopping and drug diversion. However, not all the Medicaid abuse is directly attributable to ineligible beneficiaries, but, the payout of huge lot of such unnecessary premiums (on behalf of those ineligible beneficiaries) by Medicaid to Managed Care Organizations(MCOs) result in substantial loss to the government. The beneficiaries could turn ineligible for so many reasons (employment, asset creation, gift deeds, recovery from temporary disability, etc.) but, the MCOs could knowingly / unknowingly maintain status quo and continue to accept and retain those beneficiaries in their service bracket. Presence of such ineligible beneficiaries in the system result in huge amount of Medicaid improper payments to MCOs thereby causing losses to the tune of Billions of $.
In 2012, $21.9 billion in Medicaid improper payments were primarily due to ineligible or indeterminable eligibility status for Medicaid beneficiaries. Even with the most conservative estimate, such payments made to MCOs account for at least ~60% of the overall Medicaid improper payments made year-on-year.
The prevalent eligibility checks are perhaps, impractical.
By far, the eligibility standards, for the beneficiary inclusion, set forth by the payers are very frail. Today, a beneficiary applies and joins the Medicaid program simply based on the eligibility fitment through disclosed documents, pertaining to income and assets. They include very basic checks that circle around the declared information. The third-party applications used by some of the State analysts, to capture beneficiary information, neither exhibit intelligence nor assist the analysts in making critical decisions. These applications don’t alert the analysts about those beneficiaries who may soon fall into the ineligible category. Hence, the MCOs continue to receive funds from Medicaid for such ineligible beneficiaries. This is mere draining of funds by Medicaid into such large bucket of MCOs, which can be effectively prevented. The existing eligibility standards are not robust enough to isolate beneficiaries at the first occurrence of abuse.
A pragmatic approach to preventing beneficiary fraud
The Medicaid system should be well-equipped with the history of beneficiaries, their associations, pattern of transactions, their income and assets and accordingly earmark them based on risk scoring. Also, they should be constantly monitored for any first occurrence of suspicious activities and accordingly adjusting their risk scores from time-to-time. This risk-scored profiling of the beneficiaries should be
made available to all the States at any point in time. Not just that! the corresponding MCOs, associated with State Medicaid agency, should be alerted about the status of such beneficiaries who fall under the ineligibility brackets for various reasons and MCO’s list of beneficiaries should be constantly monitored. This means, bringing about a transformational change in Medicaid’s technology assets and enablers.
Medicaid requires a generational decision-intelligence system that would enable the States to seamlessly maintain vigil and prevent the occurrence of fraud, by effectively aggregating information from multiple disparate sources and by dynamically enabling effective collaboration among all the stakeholders.