The Future of Improper payments in Medicare and Medicaid

Every year, thousands (yes, thousands) of Medicare, Medicaid, and CHIP (Children’s Health Insurance Program) payments are paid in error. Whether that is through overpayment on a claim, underpayment, duplicate payments, or payments made to people ineligible for coverage.

It may come as a surprise to realize that 2022 is trending to be the lowest improper payment year since 2012. Especially after an unprecedented global pandemic and the sheer amount of claims that have been submitted since 2020.

Let’s dive into an overview of how the pandemic affected improper payments and the measures taken to make 2022 the lowest improper payment year yet.

Effects of Covid-19 on Medicare and Medicaid claims

One thing to understand out of the gate is that improper payments are not typically an indication of fraudulent behavior or other wrongdoing. Sometimes, they are payments that simply failed to satisfy statutory, regulatory, and administrative requirements

According to the Medicaid and CHIP’s COVID-19 summaries, “Preliminary evidence suggests that there has been a sharp increase in the number of adults reporting adverse mental or behavioral health conditions during the COVID-19 pandemic compared to prior years. Similarly, preliminary evidence indicates that there has also been an increase in drug-related mortality during the COVID-19 pandemic.”

The increase led to more beneficiaries getting care via telehealth services, particularly in the CHIP populations. While in-person visits, especially for mental health, declined, the usage of remote virtual services increased.

The role of telehealth

Telehealth services are done virtually, where patients and providers are required to submit information digitally. This means that one key component is eliminated from the claims management process: the human element. For example, let’s say a patient goes to their doctor’s office. Sometimes, they enter their information at a digital kiosk, but most places still rely on paper and pen. That clipboard is then given to the receptionist, who enters it into the system. What if the patient’s handwriting is hard to read? What if that receptionist reads a ‘5’ instead of a ‘2’ in the procedure code or a ‘D’ instead of a ‘B’?

What if the doctor is tired and instead of submitting a general physical to the insurance company, they submit the claim for the previous patient’s procedure?

Telehealth or better processes?

Like most industries during the pandemic, healthcare had to force a shift towards an outcome that should have taken a decade or more to initiate. Healthcare has always been one of the slowest to adopt newer technologies, and of course, with all of the red tape(HIPPA, compliance, data regulations), that’s no surprise. The pandemic forced healthcare institutions to think ahead in order to improve both their patient experience and patient outcomes.

The downward pattern in payment errors may not solely be the result of adopting new tech. It could also mean that Medicare is putting a magnifying glass on their policies in order to avoid improper payments at a time when they already have so much on their plate.

CMS (Centers for Medicare and Medicaid Services) has applied a specific approach by highlighting provider training, guidance, problem reductions, as well as emphasizing prevention-oriented routines.

These preventions included determining and clarifying policies and creating tasks that ensure applicable coverage, payment, and coding guidelines are achieved.

What does the data say?

Looking at CMS’s data is fascinating, especially when we look at the trends pre-COVID. In 2020, improper payments decreased from 7.25% in 2019 to 6.27%. This happened during a pandemic, when claims were likely being submitted and processed at lightning speed.

Fast forward to 2021, and improper payments declined even more to 6.26%. That number was 10.1% in 2013.

If the introduction of telehealth could lower the improper payment rates so drastically, imagine what could be accomplished with an RPA (robotic process automation) solution, created for claims processing. Free your examiners to work on more complex tasks and contact us to speak with one of our specialists today.