(gentle upbeat music)
- All right, Joe and I are back together today.
Welcome back to "GovTech: In Case You Missed It,"
our weekly livestream that dives into the latest trends,
news, and best practices
in the world of government technology.
Today we're talking about improving
Medicaid claims management and reducing avoidable denials.
We'll be discussing the current state
of Medicaid claims processing,
the impact of avoidable denials
of both providers and payers,
and exploring how technology and collaboration
can modernize the process
for increased efficiency and satisfaction.
So grab a seat.
Let's dive into this exciting and informative discussion.
Let's welcome back to the show, Optum's John Campbell,
director of Product Management
for Optum State Government Solution.
John, thanks so much for carving some time out today.
All right, so first... - Hello.
- For those that missed your last episode back in November,
can you tell us a little bit about yourself
and your public and private sector background?
- Sure.
Thanks again for having me back.
I appreciate it.
So I've been with Optum about seven and a half years now
working primarily on the Medicaid space
and offerings that Optum has in that area,
mostly about modernizing Medicaid programs
and identifying products
that are being used and innovated in the commercial space
and seeing if they are applicable to the Medicaid space
and then when they are, helping to mature those products
and bring them to that market.
Prior to my tenure here with Optum,
I was with the state of Utah
where I was the director of Medicaid Enterprise Systems.
And in that role for about seven and a half years also,
about half of it, I was working
on the Legacy Claims Payment System, administering that
and managing the improvements to that process.
And then for the last three and a half years,
I worked on the Medicaid Claims Payment Replacement Project
and led the technology components of that solution.
So all from the state side.
Now, prior to my government work,
I worked in a variety of sectors in technology,
principally in database management and leadership,
worked in pharmaceuticals, finance,
supply chain management, telecommunications,
and probably one or two other industries
that are escaping my memory at the moment, so...
- All right, well, that's super helpful and thanks for that.
Now, given your, you know, experience in the Medicaid space,
maybe you could break it down for our audience.
How are governments currently managing
the Medicaid claims process?
And what do you mean by avoidable denials?
- Sure.
It's a great question.
It probably comes up a lot
when people see these words together.
So our focus really is on claims for services
which are rendered and have been building good faith.
Now, we're not talking about claims
which might fall into the fraud, waste,
and abuse categories.
Those are what I would call legitimate denials.
But really those claims were services were rendered,
the member and the provider did all of that in good faith,
and so we want to get ahead of that process.
So when we're talking about how Medicaid programs
are currently billing and addressing claims of this nature,
there isn't really anything special
about how the claims engines are adjudicating claims.
They are applying the rules
as they're published and programmed within them.
The issue here really is that Medicaid programs
are necessarily complex programs
and the billing and reimbursement rules are equally complex.
So getting ahead of that complexity
can be achieved through transparency,
and that is the transparency of those program rules
and the reimbursement requirements
and getting that in front of providers
in a way that they can utilize
and leverage as they're building their claims
to send them forward to the program for reimbursement.
Now what we've identified
through some recent academic studies
is that about 86% of all claims that are denied
are avoidable in one way or another.
The remaining denials, the other 14-ish %
are those legitimate claims or denied claims
that probably shouldn't have been billed in the first place.
So we want to identify how techniques and processes
and systems that we can implement
that would allow us to reduce that 86%
down to a much more reasonable number.
And this has a substantial impact on providers
and their performance within the program.
So kind of going back to that academic study
that I mentioned,
that same study has shown that Medicaid claims themselves
are denied at a substantially higher rate
than Medicare or commercial claims.
In fact, about 25% of initial claims
submitted to Medicaid programs are denied on average,
and that's about nearly four times the initial denial rate
for Medicare and commercial.
Now the reasons for the denials,
they range all over the map and they're pretty universal.
So things like eligibility issues,
missing and/or invalid claims data,
coding errors, services not covered,
things of that nature
all fall within this 86% that I'm referencing.
Now, what the impact of this is, is that, (clears throat)
pardon me, providers have to...
There is an impact on both sides, you know, payers,
the program itself, has to handle providers
when they're calling up
and inquiring about why a claim was denied.
Similarly, a payer, the provider themselves,
has to pursue reimbursement of that claim
after it's been denied
and they feel they're actually due the reimbursement.
So providers in the Medicaid space though,
they have an outsized burden in terms of recouping
their expected reimbursements from the payer.
And this is due to the fact that the cost
of going through the reimbursement, or sorry,
the cost of going through the appeals process
siphons away about 17.5% of their expected
but already low revenue.
So on average, we see that Medicaid providers
are losing some substantial portion of their revenue
due to these
anticipated or improper denials,
I guess I should say.
And that creates such a burden on them
that it ultimately has an impact on provider's willingness
to remain in the program.
- Yeah, I think that's great insight there.
I mean, as we look at avoidable denials,
it's hard to just, you know, think about all
of the implications of that.
But as you said, you know, this is a compounding problem
that has a lot of different impacts for, you know,
the payer and the provider.
Now let's kinda shift gears and talk about, you know,
how people are solving this.
So modernization is kind of one of those top of mind things
that we often hear at the state, you know, level
where they're taking, you know, archaic,
you know, on-premise, old school technology infrastructure
and looking at modernizing it.
So I'd love to kind of get your thoughts
on how state governments can leverage technology
to modernize this claims process,
you know, looking at solving that avoidable denial dynamic
and also improving provider satisfaction
and program efficiency in the process.
- Right, yeah.
So what I wanna focus on the technology aspects of it.
We don't want to get hung up
on some of the things we can't control.
And I like to refer to those as gravity issues.
So as a technologist, I can't really control
how the legislature is going to allocate
program administration and operations funds,
which directly drive reimbursement rates,
but we can work on technical solutions
that really come in at essentially a low cost
that can both improve that anticipated revenue
or the real revenue that a provider gets back.
And I mentioned a minute ago,
they have that drain of about 17%.
So by reducing that,
we can improve provider satisfaction in the long run.
So what we're suggesting here is that Medicaid programs
need to look at technologies that can provide transparency
of the program rules and policies and procedures
to the provider at the point where they need it.
And we feel that the point
that the providers need that transparency
is when they're building their claims
prior to submission for reimbursement.
Now, this has typically been performed through the use
and deployment of newer,
better, more efficient provider portals
that have the program rule documentation
published in a way that providers can get to it more easily.
But that does not address the kind of fundamental issue
of these programs are complex
and providers need to have a more simple way
of getting to that data.
And as I mentioned in the previous question and response,
these same claim types are not being denied
at the rate that they are in commercial or...
Sorry, let me rephrase that.
The same claim types that are denied in Medicaid
are not being denied at the same rate
in commercial and Medicare
because those programs are more transparent
in what the payer is expecting from the provider.
So we want to get to that kind of level of transparency
so that when providers are constructing their claims,
that they know how to do it in a much more simple
and clear manner based off of the member's eligibility
and the program rules that that member's eligible for.
So what we are suggesting is
that Medicaid programs look for solutions
that can provide that level of transparency,
either directly to the provider
as they're building the claim,
or in the EDI stream prior to that claim
hitting the adjudication engine and denying.
And technologies exist on the market.
They can provide both of those solutions
and we feel that those will benefit Medicaid programs
in a much greater way
than the traditional published documentation
and hope that they read that method
that we've worked with for so long.
- So, you know, one of the things that our audience loves
are these examples.
They wanna know who's doing it, who's doing it well.
You've made a series of kind of recommendations
and suggestions now for states to look at.
Can you share with us an example
of maybe a jurisdiction that's done, you know,
these recommendations, that's integrated the technology
that you've talked about,
and what outcomes they've observed?
- Absolutely, so I've got two examples that I'll use.
One of 'em, I'm not sure that I can name the jurisdiction
due to contractual reasons,
but that is a state Medicaid agency
who's using one of these tools that I was suggesting,
one that Optum produces.
And it's actually working within the EDI stream
to report back to providers when a claim is likely to deny
and tell the provider exactly why.
As opposed to a traditional CARC/RARC,
it's a very plain English kind of message.
What I can say though
is that we have deployed this same tool
in the Medicaid space, sorry, Medicare space.
And in fact, all Medicare MACs today
are utilizing this this product
which is providing this messaging back to providers.
And this is nationwide.
So any provider that is a Medicare provider
and submitting claims via EDI has the capability
of receiving these messages back
depending on their provider type and some other factors.
But all Medicare MACs in the country
are currently using this,
and we're seeing a lot of positive feedback
from the MACs themselves,
as well as from the providers that are utilizing it,
because of the clarity of information
that they are receiving from their payer,
which is specific to that claim and the rules surrounding
that member and the date of service
and all the other factors that go into adjudication.
It's just a very clear messaging back
and they're able to act on it in a matter of,
and in some cases, minutes,
but more realistically within a day,
and get that claim cleaned up and back to the payer
with no lag, would be a better way...
Best way to put it up.
- Great results there.
Now, you know, I know sometimes
there's some carryover innovations
and maybe some other interesting unexpected use cases
that you might have witnessed with these implementations.
Anything top of mind that, you know,
maybe stands out to you as additional unforeseen benefits
of this modernization work?
- Yes. (chuckles)
In fact, one of the...
That jurisdiction I couldn't mention
brought about an innovation
that frankly I never would've thought of.
It was just outside of the,
very much outside-of-the-box thinking.
And what they've done is use this tool
within the EDI stream
to get in front of claims that are being submitted
to their managed care organizations.
And in this context, they're performing some oversight
and collaboration with the managed care organizations
to get what are essentially realtime metrics
about provider claim submission patterns
and MCO response to those claims.
So with this tool,
we're able to give the Medicaid agency
a view into managed care organization performance
in what is near realtime model.
Whereas prior to that, the lag with oversight
of those organizations could be at best a month,
but more likely it's going to be several months
looking in arrears.
So we're able to give this state jurisdiction
a view that they previously had no insight into,
and this allows them to take corrective actions
or provide reporting to their legislative bodies
and stakeholders much more rapidly
and meaningful than they ever were in the past.
- So how should our IT audience,
public sector IT leaders, address this as a priority?
And is there a typical champion
for managing these avoidable claims denials
in a Medicaid agency?
- Yeah, so I mean, the first thing about addressing anything
is recognizing that there is a problem.
And this particular problem is one that I feel has flown
under the radar for forever, essentially.
And now that we have tools that can help rectify it,
I think, is why we're starting to to see chatter about it.
So in terms of IT professionals
and what we can do as an organization
is to champion the problem
and then also help provide solutions for that problem.
Now, the solutions that I'm espousing
are ones that are very IT-centric
and we can get behind them
and show the benefits
and the cost that are associated with it.
Now, in terms of a typical champion for such a solution,
it really ranges across the spectrum.
The first people that I look to are those that are
in the provider enrollment and management space
because providers are the ones
that are most negatively impacted
by avoidable claims denials or improper claims denials.
They're impacted in their pocketbook.
And as I mentioned,
we've got studies that are showing conclusively
that this is having a negative impact
on provider enrollment within Medicaid programs.
And that's the last thing we need,
is providers leaving because of cost reasons.
So we need to reduce the impact
that providers are feeling from that.
So provider enrollment and management team members
and leaders would be my initial choice for champions.
But then on the flip side of that, the claims teams as well,
because by reducing improper claims denials,
we're also improving the performance
of the claims system itself
by increasing auto adjudication rates,
obviously decreasing denial rates.
And this also has a follow on effect of improving
or reducing the suspend rates within the claims system,
which brings the overall workload
of the operations teams down.
- So, you know, one of the other things
that we often hear is around how do you know
what you're doing is successful?
So, you know, I've made the decision
to kind of follow your best practices,
I've modernize this infrastructure,
you know, what are the metrics that both payers
and providers can use now to track progress
and evaluate that success in reducing or eliminating
those avoidable claims denials?
Any thoughts on that?
- Right, yeah, so when it comes to metrics,
there's a few obvious ones.
You're gonna have your auto adjudication rate,
your denial rates, those are easily tracked over time.
They're probably being currently tracked
in all claims systems.
So those will give you...
Those particular metrics will give you
an objective view over whether we're seeing a trend down
or a trend up, depending on which metric we're looking at,
over time before or during and after the implementation
of one of these solutions.
Now, each payer is going to be different
and what they're looking for in terms of metrics
to track performance of claims
will change depending on their own environment
and what's important to them at that point in time.
Now many of these reports are already being run,
so suspend reports would be...
Anything around claim suspension
would be very interesting to review
as we're implementing one of these programs.
Similarly, anything on the fraud, waste, and abuse side
because these tools,
because they're getting ahead of the curve
of claim submission, are also able to communicate
proper billing expectations from the payer to the provider.
And we would be able to see a...
We should be able to see a trend down
in fraudulent claim activity.
So those are some interesting metrics that should be pursued
by anybody implementing these solutions.
But then of course, there's gonna be a whole host
of custom metrics that each payer implements on their own.
- So the easiest question
you're gonna get from us all episode,
but where does our audience go
to learn more about Optum Solutions?
- Well, I think we've got a ticker on screen right now.
So we have a URL that will tell you
specifically about the Optum solutions
that I'm talking about, optum.com/stategovACE.
And then of course,
I'm more than willing to talk to anybody
about these solutions.
I'll talk your ear off if you let me.
And you can find me on LinkedIn.
I think the ticker there has my LinkedIn address
and an email if you're so inclined, john.campbell@optum.com.
I'd be more than happy to talk
about these solutions day or night.
- Awesome, well, John, thank you so much
for coming on "In Case You Missed it"
and joining Dustin and I this week
to talk about this very important topic.
- Great, thanks for having me, Joe, Dustin.
It's great to see you guys again.
- All right, everyone, have a wonderful weekend.
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