Insurers continued receiving payments even after beneficiaries moved to other states, the paper reported
As Congress considers cuts in Medicaid funding, The Wall Street Journal reported that Medicaid managed care plans received at least $4.3 billion in duplicate payments over a three-year period, due to recipients who moved from one state to another.
Centene, the largest private Medicaid insurer, collected $620 million in duplicate payments between 2019 and 2021, while Elevance Health received $346 million and UnitedHealth Group took in $298 million, The Journal reported on March 26.
All told, more than 270 insurers received duplicate payments. The paper noted that private insurers handle coverage for 70% of the 72 million Medicaid recipients.
“We may be paying premiums on behalf of an individual who might have moved, and we don’t know that they have moved,” healthcare consultant Caprice Knapp, PhD, told the newspaper. “It definitely is wasteful.”
The reporting was based on an analysis of the Transformed Medicaid Statistical Information System (T-MSIS), a database of beneficiary information maintained by the Centers for Medicare and Medicaid Services (CMS).
In response to a Wall Street Journal article about managed care plans receiving billions in duplicate Medicaid payments, Craig Kennedy, chief executive of Medicaid Health Plans of America, noted how heavily regulated the health insurance industry is. (Photo copyright: LinkedIn.)
Multiple States Paid Double Payments to Medicaid Insurers
“Government guidelines stipulate that if Medicaid recipients move to another state, they are supposed to cancel their coverage in their former state when signing up in the new one, which often gives them a different insurer,” The Journal reported. “But the recipients don’t always cancel, leaving states to play catch-up.”
States paying the highest rates of duplicate payments include Georgia, Florida, and Indiana, according to The Wall Street Journal’s report.
To illustrate how this works, the story used the hypothetical example of a Medicaid recipient in Florida. There, the state pays $291 per month to the private Medicaid insurer. The individual moves to Georgia and enrolls in that state’s Medicaid program. Georgia begins paying an insurer $339 per month. But Florida continues to pay the monthly fee even though the recipient is now receiving medical care in Georgia. (The payment amounts are estimates based on averages in each state, the paper said.)
The state might not know that a beneficiary has moved until it conducts an annual eligibility check, the story noted. In the meantime, insurers “can collect months of payments before a patient is dropped from the rolls.”
To determine if a patient had moved, the analysis looked at where they received medical care. “The data don’t indicate where recipients are actually living or reflect all adjustments later made to payments,” the story noted.
Some insurers criticized the analysis. Most of the three-year period overlapped with the COVID-19 pandemic, when emergency rules made it difficult to disenroll beneficiaries, insurers told The Wall Street Journal. A Centene spokesman said the analysis “ignores the financial safeguards in place to address potential overpayments.” The insurer told the paper that it had repaid $2 billion to the states between 2019 and 2021.
The duplicate payments amounted to $800 million in 2019, then jumped to $1.3 billion in 2020 and $2.1 billion in 2021, the paper reported. KFF, citing CMS data, reported that states spent an estimated $880 billion on Medicaid programs in fiscal year 2023.
Craig Kennedy, chief executive at Medicaid Health Plans of American—an industry group that represents managed care organizations—told The Journal that insurers are closely watched by regulators.
“[Health insurance is] a heavily regulated industry,” Kennedy said. “Following rules and regulations is the No. 1 priority here.”
Office of Inspector General Weighs In
The Wall Street Journal analysis followed an earlier report from the US Department of Health and Human Services’ (HHS) Office of Inspector General (OIG). The OIG report, issued in September 2022, was based on an audit covering Medicaid managed care capitation payments in August 2019 and August 2020. It was also based on data from T-MSIS.
“All 47 States reviewed made capitation payments on behalf of Medicaid beneficiaries who were concurrently enrolled in two States,” the OIG reported. “Specifically, capitation payments were made on behalf of 208,254 concurrently enrolled beneficiaries in August 2019 and 327,497 concurrently enrolled beneficiaries in August 2020. The Medicaid program incurred costs of approximately $72.9 million in August 2019 and $117.1 million in August 2020 for capitation payments associated with beneficiaries in one of the two concurrently enrolled States.”
OIG advised CMS to provide state agencies with T-MSIS enrollment data. CMS dismissed the recommendation, claiming that the Public Assistance Reporting Information System (PARIS), designed to deter improper public assistance payments, was sufficient, and that T-MSIS would add inefficiency and confusion. However, current and former state Medicaid officials told The Wall Street Journal that PARIS “doesn’t always include up-to-date or complete information.”
As PAMA brings estimated Medicare reimbursement cuts of up to 30% over the next three years to a range of typically high-volume tests and diagnostics, medical laboratories that wish to stay competitive must understand the needs of managed care payers and learn how to optimize collections, reduce denials, and communicate value effectively or risk their financial health
Recent years have seen major shifts in consolidation, automation, and efficiency analysis to help streamline both workflows and cashflows. However, the threat from the current and coming cuts to Medicare lab test prices will be particularly acute for smaller independent laboratories and hospital/health system lab outreach programs. These labs will continue to feel added strain due to reduced reimbursement across 25 of the most common tests billed to Medicare.
And, that doesn’t account for subsequent cuts, which are estimated to reach nearly 30% over the next three years.
Cost of Service Disparities/In-Network Status Further Impact Clinical Labs
If the CLFS reductions weren’t enough, labs face another threat—managed care and commercial payers aligning with big national laboratories and narrowing networks in an attempt to lower costs and provide maximum return for both patients and shareholders. For smaller and independent laboratories, this represents a double threat.
In the first situation, larger laboratories can offer services at lower costs due to increased automation, batch processing, and other scale advantages. This means that while the lower CLFS rates will impact the financial integrity of larger labs, the actual margin lost is less than that of smaller laboratories and facilities that face higher costs to perform tests and provide services.
Compounding the situation, commercial and managed care payers searching out the best value for their patients and shareholders tend to narrow their networks by excluding many independent clinical lab companies and hospital lab outreach programs, amplifying this inherent disparity and skewing the advantage away from independent providers yet again.
Higher cost providers without a clear understanding of promoting their value to payers could have trouble obtaining in-network status. Yet, failing to obtain in-network status may reduce overall test quantities, further raise prices, and make smaller labs less competitive with larger national laboratories—a dangerous cycle with today’s competitive laboratory landscape.
Shifting Focus and Optimizing Managed Care Reimbursements
As the financial stability of Medicare reimbursements wanes, it is imperative that laboratories look to new methods to further increase efficiency and stabilize cashflows. Once a smaller portion of laboratory revenue, managed care organizations and commercial payers will be of increased importance as overall reimbursement rates continue to shrink in the face of healthcare reform and value-based care.
Special June 26 Webinar: Improving Managed Care Reimbursement Efficiency
Understanding not just what these payers are attempting to achieve for their organization—but also how they structure requirements and processes to support their goals—is an essential element of succeeding in this previously smaller share of the marketplace.
For those interested in learning more about critical concerns regarding managed care payers in the post-2018 CLFS landscape, Pathology Webinars is hosting a 90-minute webinar on Tuesday, June 26, 2018, at 2:00 PM Eastern.
The webinar will include presentations from two experts on a range of topics including:
Actionable steps to absorb the loss of Medicare revenue due to the impact of the 2018 CLFS reductions;
How managed care payers process network status and payments;
Who in the managed care chain of command should receive your value proposition;
How to better align your value propositions, policies, and workflows with the requirements of managed care and commercial payers; and,
Understanding the roles managed care payers expect clinical laboratories and anatomic pathologists to play in managing and reducing unnecessary testing.
The first speaker, Frank Dookie, MBA, will provide an inside look at:
How managed care payers function;
Their requirements and workflows; and,
What they look for when considering network status for a laboratory.
Dookie is a laboratory professional who has worked on the payer side for 28 years. He is passionate about the role that diagnostics play or can play in healthcare, and has spent his career working for instrumentation providers, clinical laboratories, the intermediary space between laboratories and managed care companies, and managed care companies.
The second speaker, Michael Snyder, will bring the entire payment process into sharp focus. He will cover:
Optimizing the collection process;
Identifying the purpose of each step, each review, and each team member involved; and,
Critical points laboratories must address to ensure payment.
Snyder is the Senior Vice President of Network Operations for Avalon Healthcare Solutions, LLC, a firm that provides comprehensive benefit management services to the health plan industry and has more than 30 years’ experience in clinical laboratory management.
Frank R. Dookie, MBA (left), Contracting Executive with a major managed care company in Woodbridge, N.J.; and Michael Snyder (right), Senior Vice President with Avalon Healthcare Solutions in Flemington, N.J., will provide critical insights and actionable details for clinical laboratory and anatomic pathology group leaders who want to ensure future revenues.
An Essential Opportunity to Improve Your Reimbursements
This critical webinar offers anatomic pathology groups and medical laboratory managers essential information and actionable next steps to immediately leverage the potential of managed care payers. Additionally, it provides insider insight to laboratories straining to retain financial integrity as reduced reimbursements and increased regulatory burdens strain budgets and cashflows.
To register for the webinar and see further details about discussion topics, use this link (or copy and paste the URL into your browser: https://pathologywebinars.com/current/managed-care-an-insiders-guide-to-improving-your-reimbursement-efficiency-with-strategies-that-work-626/).
As further Medicare payment reductions over the next three years drive reimbursements even lower, understanding how to capture the positive attention of payers—while working within the rules and policies driving their reimbursement decisions—will be an essential element of successful laboratory management and growth. Register now!
Payers are cutting reimbursements for anatomic pathology services, making it essential for every pathology group to understand its financial present and future
Certain pathology business leaders are warning their colleagues that the era of private pathology group practice domination of the anatomic pathology marketplace is about to end. The only question is how rapidly the clinical and financial foundations of smaller pathology group practices erodes to the point where these groups are unable to generate adequate reimbursement to sustain the practice and the incomes of the individual pathologists.
However, along with this bad news comes a note of optimism. There is a once-in-a-lifetime opportunity for the anatomic pathology profession to take ownership of genetic testing and precision medicine—the most important diagnostic technologies to emerge in the past 100 years. The danger for anatomic pathologists is how to successfully transition from the private group practice model to the new clinical practice models that deliver genetic testing and precision medicine services.
Why Pathologists Are Making Less Money Today
The economic plight of private practice pathology is familiar to all pathologists. During the past decade, reimbursement for technical component (TC) and professional component (PC) services was regularly beat down by payers. For example, pathologists lost the TC grandfather clause in 2012, which immediately caused many histology labs to go from profit to loss. (See Dark Daily, “In Fixing Physician Medicare Pay, Congress Enacts Yet Another Cut in Clinical Laboratory Test Fee Schedule,” February 12, 2012.)
Similarly, over the past 10 years, each time private health insurers negotiated the renewal of a managed care contract with a pathology group practice, they aggressively cut the prices they paid for anatomic pathology services. And the corresponding explosive growth of narrow provider networks exacerbated the financial erosion from lower prices. Many smaller pathology groups found themselves excluded from these networks, causing them to lose access to the large numbers of private-pay patients served by these networks.
“It is important for every surgical pathologist and every pathology practice administrator to recognize that they have the ability to negotiate much more favorable terms and increased network access with health insurers, but only if they come to the negotiating table with the right information and techniques,” observed Robert L. Michel, Editor-in-Chief of Dark Daily and The Dark Report. “Pathology groups showing strong financial performance today know these techniques and strategies. When negotiating managed care contracts, they achieve higher reimbursements, more favorable terms, and in-network status.”
Proven Ways to Help Pathology Groups Protect and Increase Revenue
Pathologists who would like to protect their groups’ revenue and bolster their partners’ income have the opportunity to learn and master the most effective managed care contracting techniques and strategies. Three nationally prominent experts in pathology business and operations are participating in a special webinar, titled “How Payers Are Repricing Anatomic Pathology: Your Financial Present and Your Pathology Group’s Future,” which takes place on Thursday, September 28, 2017 at 2:00 p.m. EDT.
Pictured above left to right are Mick Raich, President and CEO, Vachette Pathology; Jeffrey Pearson, MD, System Medical Director, Bronson Hospital Laboratories; and, Christopher Jahnle, co-founder and Managing Director, Haverford Healthcare Advisors. The three distinguished speakers will share expertise and experiences you can use to protect your pathology group’s revenue while preserving partner income. (Photo copyright: Dark Daily.)
First to speak on this webinar is Mick Raich, founder and CEO of Vachette Pathology, of Blissfield, Mich. He will discuss how Medicare and private insurers are using new pathology and lab repricing models to slash reimbursement and control utilization of expense pathology testing services. Raich will explain why payers are engaging such third-party companies as AIM Specialty Health of Chicago, Avalon Healthcare Solutions of Tampa, Fla., BeaconLBS of Montvale, N.J., and InformedDNA of St. Petersburg, Fla., to develop coverage guidelines, issue preauthorization, and manage the network of labs and pathology groups allowed to provide services.
Raich will further explain what pathologists must know about the Medicare Access and CHIP Reauthorization Act (MACRA) physician payment program, with its MIPS—Merit-based Incentive Payment System—that is designed to pay bonuses or assess penalties each year, depending on how individual physicians perform against their own operational and clinical benchmarks.
Insidious Methods Payers Use to ‘Take Back’ by Underpaying Certain Pathology Claims
Another topic that Raich will address can mean significantly greater collected revenue for your pathology group. He will explain the new phenomenon of how private payers are auditing error rates on claims, then taking back those overpayments by underpaying the labs or pathology groups on claims for specific CPT codes (current procedural terminology codes). Raich will show how your billing/collection team can detect these claims and recover full payment from the payers.
How One Pathology Group Practice Doubled in Size
The second important financial topic of the webinar involves the merger, acquisition, and consolidation of private pathology group practices. You’ll learn why many group practices are losing their independence due to declining revenue or because their parent hospital was acquired by a health system. Pathologist Jeffrey Pearson, MD, is the System Medical Director at Bronson Hospital Laboratories in Kalamazoo, Mich. He is also a partner and President of Pathology Services of Kalamazoo, PC.
During his tenure at Bronson, Pearson helped facilitate the acquisition and assimilation of two hospital laboratories and one for-profit laboratory. His pathology practice has doubled in size and developed a high degree of subspecialization. Each time, the pathology group associated with the acquired entity had to be integrated with his health system’s existing pathology group practice. Experiences will be shared regarding:
· How to assimilate acquired laboratories;
· Practice utilization management; and
· Leveraging success to grow the practice and obtain favorable part A contracts.
Understanding How to Increase the Value of Your Anatomic Pathology Group
To round out the financial techniques and strategies you and your pathology practice administrator can use to protect your group’s revenue and boost partner income, the webinar’s third expert will discuss the latest developments in pathology practice mergers, acquisitions, and consolidations.
Christopher Jahnle is co-founder and Managing Director of Haverford Healthcare Advisors in Paoli, Penn., a suburb of Philadelphia. Over the past decade, his firm has represented Aurora Diagnostics of Palm Beach Gardens, Fla., as a purchaser of private pathology group practices.
Jahnle will describe the specific characteristics of a private pathology practice that have the highest value to buyers in today’s marketplace. You’ll understand how your pathology group’s unique mix of managed care contracts, hospital/health system relationships, and sub-specialist expertise will be valued by a potential acquirer or merger partner.
Jahnle will share case study examples to help you identify useful things your pathology group can do to make it more profitable and increase its value. This is essential knowledge if your group’s pathologists are considering such strategies as:
· “Should we merge with a bigger pathology group?”
· “Should we sell our pathology group?” and
· “Should we add subspecialists and pursue more hospital contracts?”
All three expert speakers have practical knowledge that you can use to protect your pathology group’s revenue while preserving partner income. It is why this webinar is timely and a “must attend” for you, your pathology practice administrator, and your pathology group’s legal and financial consultants.
80% of US employers are using financial incentives in wellness programs, and Penn Medicine research suggests better incentive design is needed to get people to exercise
In recent years, there’s been plenty of headlines about wellness programs offered by employers and health insurers. Data show that such programs are cost-effective. But, until now, there were few studies about employees’ attitudes toward wellness programs. Because some of these wellness programs incorporate clinical laboratory testing, medical labs have a stake in their future.
The fact is that companies want healthier employees and they’re willing to pay for it. Experts say about 80% of US employers use financial incentives in worker wellness programs. And for each dollar a company spends on a wellness program, it saves about $3 in medical costs, according to an article the journal Health Affairs. (more…)
Researchers find shopping for medical laboratory tests increased by nearly 50%, and people are saving more than a million dollars annually by shopping for blood tests
Each year, more consumers use online healthcare price-shopping tools to find hospitals, physicians, and clinical laboratories that have the lowest prices. And medical laboratory tests is among the top services on their lists!
Researchers at Vitals of Lyndhurst, NJ, a company that publishes online physician ratings, analyzed how consumers were using its price and quality transparency tools. They confirmed that shopping for medical laboratory tests/blood work is one of the top healthcare procedures checked by consumers.
According to a recent Vitals press release, approximately 46% more people shopped for blood tests in 2015 than the year before, and they saved $1,149,682 by doing so. That’s because their health plans reward them for selecting good quality and low-price providers, as well as adopting healthy behaviors, such as losing weight, exercising more, and lowering high cholesterol scores. (more…)
