In this article

The federal government has elevated expectations for preventing improper payments across federally funded benefit programs, with Medicaid identified as a priority.

In March 2026, the White House established the Task Force to Eliminate Fraud, Waste and Abuse,1 emphasizing:

Prepayment controls
Stronger validation practices
Measurable results.

For state Medicaid agencies, the immediate challenge is operational: Many programs must strengthen prepayment integrity while operating on legacy Medicaid Management Information System (MMIS) platforms, constrained data environments and limited staff capacity.

But there’s a pragmatic approach for states to expand prepayment controls without destabilizing core claims operations.

It focuses on two complementary capabilities:

Modern claims editing content and governance that can be deployed in either a first-pass or second-pass position
A hybrid prepayment model that delivers targeted analytics on state infrastructure to support intervention before payment

Federal direction and what it means for Medicaid operations

Medicaid program integrity has historically balanced prevention and recovery, but policy and oversight trends increasingly favor “shift-left” approaches that reduce improper payments before dollars leave the system.

Recent federal actions reinforce expectations that states will strengthen controls that operate prepayment, demonstrate reliable governance over edits and policies, and produce measurable cost-avoidance outcomes.

For many Medicaid agencies, meeting these expectations requires navigating three realities:

Claims adjudication is frequently anchored to legacy MMIS logic that is costly to modify.
Managed care penetration limits the portion of claims directly paid through fee-for-service workflows.
Modern analytics often cannot be deployed in real time because data and infrastructure are fragmented and systems are antiquated and hard to modify.

These constraints drive the need for approaches that improve prepayment performance while working within existing environments.

The limits of traditional claims editing

Many Medicaid agencies operate some level of first-pass claims editing embedded in adjudication. These controls are necessary but commonly constrained by rule coverage, update cadence and the ability to incorporate nuanced state policy logic across claim types.

As provider behavior evolves, deterministic rule sets can drift out of alignment with emerging abuse patterns. The consequence is that improper payment exposure can remain material even when an edit system is technically “in place.”

A second constraint is architectural: Many platforms are tightly coupled to MMIS release cycles and vendor roadmaps, making rapid translation difficult. In practice, states may face a choice between accepting slower rule updates or pursuing expensive system modifications.

Claims editing as a configurable control: first pass and second pass

One way to reduce operational friction is to treat claims editing as a configurable control that can be deployed where it delivers the most value with the least disruption. A modern claims editing capability can function as:

First-pass editing: integrated before adjudication to prevent inappropriate payments at the earliest decision point

Second-pass editing: applied before or after initial adjudication logic to identify additional savings opportunities and policy gaps without re-architecting the state’s MMIS

This flexibility matters because state environments vary widely. Some states need stronger front-end edits because existing MMIS controls are limited.

Others already have a first-pass edit platform but still experience meaningful leakage due to content gaps, configuration limitations or update lag. In those environments, second-pass editing can be an additive layer that surfaces net-new opportunities without disrupting the primary adjudication workflow.

Optum Claims Edit System (CES)

The Claims Edit System is designed to support either deployment model. CES incorporates national Medicaid edits and state-specific policy logic across professional, facility and DME claims, with an established process for ongoing content updates and quality checks.

States can use Claims Edit System as a first-pass replacement or augmentation, or as a second-pass layer designed to identify incremental savings and control gaps. To support evidence-based decision making, Optum offers a complimentary 90-day CES assessment for both first-pass and second-pass scenarios.

The assessment applies Claims Edit System content to historical claims to quantify opportunity areas, characterize root causes (policy, configuration, or workflow) and provide a practical deployment pathway aligned to the state’s infrastructure and operating model.

Hybrid prepayment: targeted prevention that works on legacy infrastructure

A common barrier to prepayment modernization is the assumption that prevention requires real-time analytics embedded directly in adjudication. For many Medicaid agencies, that approach is not feasible in the near term due to legacy MMIS constraints, data latency and limited integration capacity.

A hybrid prepayment model provides an alternative. Instead of requiring real-time transformation of the MMIS, hybrid prepay delivers AI-enabled policy-driven analytics as a service that runs on state infrastructure.

High-risk claims or providers are identified prepayment through targeted analytics, and state teams retain authority over adjudication actions (for example: deny, hold, pend, release or apply provider-level controls) consistent with state policy and governance.

In practice, the differentiator is operational compatibility. Hybrid prepay can function effectively in dated environments because it is designed to execute against the state’s existing database schema and within the state network boundary.

Why “second-pass” evaluations still matter in mature environments

States often ask whether additional savings are realistic when an incumbent claims edit system already exists.

Experience across state and payer environments indicates that incremental value is a common benefit. Reasons include differences in content breadth, state-policy interpretation, update cadence and the ability to tune edits to reduce false positives while expanding coverage.

A structured, time-boxed evaluation is the most defensible way to answer the question. The objective is not to restate known issues but to quantify net-new opportunities, identify where leakage occurs (front-end edits versus downstream workflows) and establish a pragmatic improvement plan.

For this reason, the complimentary 90-day CES assessment is positioned as a low-risk “second-pass” evaluation that can be run even when a state maintains an existing edit platform.

Implementation considerations for state agencies

States typically evaluate prepayment strengthening options across four practical dimensions:

Infrastructure constraints: ability to integrate into adjudication versus operating adjacent to MMIS
Program mix: fee-for-service exposure, carve-outs and managed care penetration
Governance: policies for edit approval, provider messaging and exception handling
Operational capacity: staffing to review pends/holds and manage ongoing tuning

Over time, states can shift additional controls left as platform capabilities and workflows mature.

A staged approach is often effective:

Infrastructure‑aware prevention wins

Federal oversight trends and the creation of the Task Force to Eliminate Fraud underscore an expectation that Medicaid agencies strengthen prevention and produce measurable cost avoidance.

The most practical path for many states is not immediate MMIS replacement but infrastructure-aware controls that improve prepayment performance within current constraints.

A configurable claims editing capability that can operate as first-pass or second-pass, paired with hybrid prepayment analytics that run on state infrastructure, provides a pragmatic way to close common control gaps.

Time-boxed assessments, such as the complimentary 90-day CES assessment, help states quantify opportunity and select a deployment approach grounded in actual claims experience.