7 Medicaid Claims Management Risks for MCOs

“Variability in Medicaid is the rule rather than the exception. States establish their own eligibility standards, benefit packages, provider payment policies, and administrative structures under broad federal guidelines, effectively creating 56 different Medicaid programs—one for each state, territory, and the District of Columbia.”

– Medicaid and CHIP Payment and Access Commission (MACPAC)

What does this mean for the 280 Medicaid Managed Care Organizations providing comprehensive care for over 55 million US adults? The complexity and variability in state-by-state regulations have health plan executives scrambling to keep up with each state’s latest Medicaid payment policies and fee schedules.

Within each state Medicaid program, there are numerous pricing models that may be based on patient population or geography. For the same procedure on a similar patient, a hospital in Stockton, California may have a different pricing model than a hospital in Sacramento. The diversity and economic status of the Medicaid population mean it can also be a more medically complex population than other payer sectors.

With the increasingly complex and dynamic state-by-state regulatory and payment environment, it has become nearly impossible to keep up to date with and adapt to the constant and nuanced changes in Medicaid payment policies and fee schedules.

But what are the real risks of not keeping up to date with the rapidly changing, dynamic world of Medicaid pricing? When fee schedules and configuring payment policies aren’t updated in real time?

1. Health plan waste – Internal team is responsible for updating content, leading to high overhead, inaccuracies, and significant effort spent on IT infrastructure and maintenance
2. Provider abrasion – Slow and inconsistent payments and repeated overpayment recovery strain payer-provider relationships
3. Competitive disadvantage – Inaccuracies, lag, and strained provider relations can impair a health plan’s chances of contract renewals and winning bids.
4. Overpayments - Using the wrong edits and price increases the risk of overpayments and downstream recovery
5. Denials & Rework – Delayed fee schedule updates can lead to inaccurate claims  
6. Missed Reimbursements & Incorrect Payments – Incorrect claims drive missed reimbursements & inaccurate payments
7. Lost Time Resolving Payments Disputes – Payment disputes take up precious time  

The traditional approach of Medicaid MCO Claims Management is inefficient and drives unnecessary costs for the health plan. For health plan leaders that want to reduce these inefficiencies and drive down claims processing costs, they need to think differently and invest in solutions that lighten the load on internal teams while providing frequent and accurate data updates health plans need to succeed in managed care.

Download our white paper Medicaid MCOs: It is time for a new claims management strategy to understand how our Payment Integrity solution, Source, is revolutionizing the way Medicaid claims are handled.