Report finds hospitals could benefit financially from Medicaid expansion

insurance, medicaid, claim formUnder the Affordable Care Act, hospitals will see a $2.59 increase in Medicaid revenue for every dollar they lose in private payments, according to a new report from the Urban Institute and the Robert Wood Johnson Foundation.

Click here to read the full report.

As of next January, ACA’s Medicaid expansion will extend public coverage to adults making below 138 percent of the federal poverty level (FPL). The expansion will increase hospitals’ public insurance revenue by creating a larger Medicaid coverage pool.

Originally mandated by ACA, the Supreme Court ruling allowed states to opt out of the law’s Medicaid expansion, leaving each state’s decision to participate in the hands of state lawmakers. In Florida, about 20 percent of the population is already on Medicaid.

Although Florida Gov. Rick Scott, who had been among the plan’s harshest critics is now championing Medicaid expansion, Florida lawmakers are showing signs they are unwilling to pass it during this session.

The report notes that “even with a Medicaid expansion, hospitals will continue to provide uncompensated care, 46 percent of which will go to patients with incomes at or below 138 percent of FPL. Medicaid expansion could let the ACA’s new provision for hospital-based presumptive eligibility cover a sizable portion of these remaining uncompensated care costs

If states choose to expand their Medicaid programs, hospitals would get another $293.9 billion from 2013 to 2022, a 22.8 percent increase in Medicaid reimbursements, the study notes.

However, it also notes that hospitals must still help to pay for health reform’s coverage expansion, even if their state opts out.

GAO finds Medicare Advantage plans overpaid $5.1 billion

A photo of dollar bills falling from skyJust last month, I wrote about how the government was falling short in its job to collect hundreds of millions of dollars in Medicaid overpayments. That news came from a report released by the Department of Health and Human Services’ Office of the Inspector General.

The saga continues with another report from the Government Accountability Office which finds that insurers that offer Medicare Advantage plans received up to $5.1 billion in overpayments between 2010 and 2012. These plans are offered by private companies that contract with Medicare to provide both Part A and Part B benefits.

The GAO audit is critical of how the Centers for Medicare and Medicaid Services (CMS) calculated payment rates for Medicare Advantage plans.  It notes that the plans are incentivized to adjust the risk scores for private Medicare beneficiaries versus public fee-for-service patients.

The report found the following:

GAO estimated that cumulative Medicare Advantage (MA) risk scores in 2010 were 4.2 percent higher than they likely would have been if the same beneficiaries had been enrolled continuously in Medicare fee-for-service (FFS). For 2011, GAO estimated that differences in diagnostic coding resulted in risk scores that were 4.6 to 5.3 percent higher than they likely would have been if the same beneficiaries had been continuously enrolled in FFS. This upward trend continued for 2012, with estimated risk scores 4.9 to 6.4 percent higher.

While CMS did not change its risk score adjustment methodology for 2013, agency officials said they may revisit their methodology for future years.

Click here to read the full report.


Government fails to collect $226 million in Medicaid overpayments

A surgical clamp holding money.The government is falling short in its job to collect hundreds of millions of dollars in Medicaid overpayments, according to a report released this month by the Department of Health and Human Services’ Office of the Inspector General.

The job of collections falls to the Centers for Medicare and Medicaid Services and according to the report there’s about $226 million in Medicaid overpayments that have gone to 11 states.

As of December 2012, CMS reported collecting $987,481,600 of the $1,213,085,167 in overpayments issued between fiscal years 2000 and 2009, according to the report. “However, CMS had not collected the remaining $225,603,567 because it had not always proceeded with the collection process in a timely manner,” the report notes.

OIG made the following recommendations:

  • Collect the remaining $225,603,567 that is due the federal government.
  • Review and address delays in resolving OIG audit recommendations and promptly pursue corrective actions.
  • Maintain adequate documentation to support the collection of overpayments in accordance with OMB Circular A-50 and CMS standard operating procedures.
  • Educate the states about their responsibility to report overpayments on the correct line of the CMS-64 to improve oversight of the reporting process.

In its response, CMS said it failed to collect some overpayments because additional review of the claims was needed, according to the report.

States affected are: Indiana, Illinois, Kansas, Louisiana, Missouri, New Jersey, Oregon and Pennsylvania. CMS is working to collect overpayments to Medicaid providers in Florida, New York and Massachusetts.

Click here to read the entire report.


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