What’s important in a Medicaid TPL partner? Know what you are and aren’t getting

When it comes to your Medicaid third-party liability program, be weary of contractors and vendors selling style without substance.  

Third-party liability (TPL) is essential to the integrity of the Medicaid program and its ability to serve our nation’s most vulnerable. Billing liable third parties the first time around means fewer dollars lost in improper payments, less administrative hassle to get them back and a stronger safety net for those who rely on it most.

As state Medicaid agencies, managed care organizations (MCOs) and, certainly, their TPL partners can attest, coordinating benefits for the approximately 10% of Medicaid members who have other sources of insurance coverage is far more complex in practice than in concept. Procedural denials, data sharing limitations and administrative constraints are just a few widely cited barriers to capturing TPL and protecting Medicaid as the payer of last resort. 

The stakes for getting payments right are higher than ever. In 2020, the Centers for Medicare and Medicaid Services reported an estimated $86.49 billion in improper Medicaid payments — a sobering figure considering millions more Americans are turning to Medicaid during the current health and economic crisis.   

Fortunately, there are healthcare experts and analytics-driven solutions that manage TPL on behalf of Medicaid programs and streamline the process for states and healthcare organizations. Unfortunately, there are also diverse, industry-agnostic firms that may lack specialized knowledge and tools but make up for it with gratuitous claims and analytical jargon. Which one are you getting and why does it matter? Here’s what to look for — and look out for — in a TPL contractor. 

The “if you build it, they will come” approach may have worked for Kevin Costner in the movie Field of Dreams, and it can work for TPL vendors, too; it’s just important to clarify what exactly they mean by “built.” Newer, non-traditional entrants into the Medicaid TPL market will naturally lack familiarity with complex, industry-standard software and systems that are critical to capturing TPL (we’re looking at you, MMIS). These technologies aren’t a quick learn, either, leading some to develop solutions based off of existing systems, processes and platforms that took more established players decades to develop — or tout aspirational solutions that either exist elsewhere or would be prohibitively time- and cost-intensive to implement. 

When evaluating potential TPL partners, dig deep into experience and results, and look beyond the buzzwords. While artificial intelligence, machine learning and intelligent automation tools are crucial components of 21st-century TPL programs, a capable partner will be able to put these concepts into context so that you understand what they mean for your bottom line. 

The U.S. healthcare system is its own unique entity. When it comes to the Medicaid program, not only do provisions vary widely by state, but the healthcare needs of beneficiaries are often complex and may differ significantly from other populations. 

Understanding these intricacies is critical to the proper coordination of benefits and care for Medicaid patients. A multinational or multi-industry conglomerate with one or two state contracts, for instance, isn’t going to have the intimate, local knowledge of an established U.S. firm serving hundreds of state agencies and MCOs. A TPL partner with an expansive national footprint will have dedicated, on-the-ground staff to support your state-specific program needs. 

Identifying TPL requires a vast amount of data and advanced analytics to accurately match individuals to third-party coverage despite common variations in healthcare data. Securing data use agreements (DUAs) with third-party payers is generally a long and complex process that can take several years to complete. For these reasons and others, TPL contractors with established DUAs in place and, as a result, a robust and comprehensive data source encompassing a broad range of payers and plan types, are best positioned to drive value from day one. 

While there are opportunities to improve the collection and exchange of TPL data, states can take action by strengthening regulations to compel insurers to share complete data and adopting best practices to ensure that all systems, including those used by managed care plans, are in alignment. Be cautious of vendors emphasizing the need to create entirely new TPL data structures — especially those without the data to back it up. 

When outsourcing financial and claims processing services, you need to trust with unequivocal certainty that your data — specifically, your members’ data — is being protected to the highest security standards. While healthcare data breaches are nothing new, the expansion of telehealth during the COVID-19 pandemic and some of the regulatory changes to facilitate it created new vulnerabilities. In 2020 alone, the U.S. Department of Health and Human Services Office for Civil Rights recorded more than 500 healthcare data breaches. In one recent incident that made headlines in Texas, personal information was compromised for nearly 275,000 people, the majority of whom were Medicaid members, according to The Dallas Morning News.  

When it comes to healthcare data security, prioritizing style over substance isn’t just poor practice; it has the potential to impart significant personal and financial harm. To ensure your program, organization and, most importantly, your vulnerable members are protected, any outside vendors handling your TPL data should be HITRUST certified, exclusively healthcare focused and maintain a true culture of security and compliance.  

Imagine a world in which the entirety of your TPL program — from pre-payment cost avoidance to post-payment recovery — is managed through a centralized, secure platform. Imagine the ability to instantly verify other coverage information in real time as early as the point of enrollment and on demand at any point along the healthcare continuum. Imagine machine learning-driven matching technology working in the background, powered by a national eligibility database comprising hundreds of millions of lives to ensure all sources of coverage are being captured and billed appropriately.

There’s no need to imagine, because this already exists. It’s HMS’ HITRUST-certified TPL solution, and it’s saving states and healthcare organizations billions of dollars annually. More than 350 health plans and government agencies trust us with their data to save costs and improve program efficiency. With more than 45 years of experience serving the U.S. healthcare community exclusively, we’ve been here from the start and are building toward the future — continuously innovating to move healthcare forward for the institutions we serve and the people you serve. 

To learn more about HMS’ payment accuracy solutions for states and health plans, visit hms.com. 
 

Through our industry-leading technology, analytics and engagement solutions, HMS saves billions of healthcare dollars annually while helping people lead healthier lives. Our broad range of payment accuracy and population health management solutions advance healthcare by helping healthcare organizations reduce costs and improve health outcomes.