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Early Trends of Medicaid Spending During COVID – and Where to Expect Future Auditors to Pinpoint

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Original story posted on: May 20, 2020

Telehealth and Medicaid eligibility nuances are expected to be future hot topics of RAC and MAC audits.

Someday, around a campfire, we will tell our grandchildren that we survived COVID-19.

Without question, the two biggest healthcare exceptions in the time of COVID are expansion of telehealth and mandatory expansion of Medicaid eligibility. These two issues will be the hot topics of Recovery Audit Contractor (RAC) and Medicare Administrative Contractor (MAC) audits in coming years. For the purposes of this article, we will concentrate on why Medicaid eligibility will be so important for future RAC and MAC audits.

Medicaid eligibility is in high demand. In the time of COVID, more people are enrolling in Medicaid, increasing program spending at the same time that state tax revenues may be falling. The Families First Coronavirus Response Act (FFCRA) authorized a 6.2-percent increase in the federal match rate (FMAP), retroactive to Jan. 1, 2020, and available if states meet certain “maintenance of eligibility” (MOE) requirements. This could mean more federal money in your coffers. Concurrently, it means more scrutiny in future RAC and MAC audits, so tread lightly. Remember, with more than 500 different payors, healthcare providers are expected to navigate all of the varied rules, depending on the payor and the state where you are rendering services.

How to increase revenue in the time of COVID, being mindful of future audits?

Knicole’s COVID Rule: Hire one person to try to get uninsured patients covered by Medicaid. It will pay for itself twofold. Here’s how: say an uninsured patient admits. Your hired eligibility person gets to work to ensure Medicaid eligibility for your patient so you get paid. This person, whether it’s an employee or an attorney on staff, must know all of the ways that state governments may change Medicaid eligibility, and how the government has expanded Medicaid eligibility during COVID.

Stay up-to-date on the following four administrative pathways that allow states to quickly loosen Medicaid eligibility rules – whether we are in a pandemic or not. You must know the exceptions to ensure that you are paid for these uninsured visits with Medicaid federal and state dollars:

  • Medicaid State Plan Updates: every state plan is different. Your eligibility person or attorney needs to keep up with all of the Medicaid state plan updates in all states in which you render services. State plan updates are the fastest ways for state agencies to quickly and without bureaucratic red tape make necessary amendments. The Centers for Medicare & Medicaid Services (CMS) recently issued a special Medicaid state plan amendment (SPA) template that lets states change their Medicaid state plans and easily implement various eligibility and enrollment policies described in the main text.
  • Eligibility Verification Plans: these state verification plans detail how state Medicaid agencies verify eligibility and use electronic data sources.
  • Section 1135 Waivers: these are special waivers available only after both the President and U.S. Department of Health and Human Services (HHS) Secretary have declared a national emergency. In normal times, the Section 1135 waivers are not as difficult to understand, because they are mostly stagnant. But not in the time of COVID.
  • Emergency Section 1155 Waiver Changes: these, like the Section 1135 waivers, are only available after a national emergency has been declared, and they relieve states from certain requirements, like demonstrating budget neutrality and public notice and comment procedures. Like “traditional” Section 1115 waivers, Emergency 1115 waivers can be used to implement policies not otherwise allowed under Medicaid law. In the past, Emergency 1115 waivers have been used to expand eligibility and benefits, as well as streamline enrollment processes. 

Knowing your state or states’ Medicaid eligibility requirements can be the difference between getting paid and not getting paid, for many hospital visits. But remember, the more risk you take, the more you must really stay on top of the eligibility exceptions and leniencies in order to help your bottom line. This will also make you a possible target for future audits. So, do it well, hire your specialized eligibility person, and keep everything documented. And you too could increase your profit in the time of COVID.

Caveat emptor: “buyer beware.” Understand that because the rules surrounding telehealth and Medicaid eligibility are being stretched, revised, and rewritten because of COVID, telehealth and Medicaid eligibility nuances will become the hot topics of RAC and MAC audits in the future.

For more tips on increasing revenue while being cognizant of future RAC audits, and for a prep-for post-pandemic audits presentation, listen in to my webcast live on June 17 at 1:15 Eastern.

Programming Note: Knicole Emanuel is a permanent panelist on Monitor Mondays. Listen to her live reporting every Monday at 10 a.m. EST.

Knicole C. Emanuel Esq.

For more than 20 years, Knicole has maintained a health care litigation practice, concentrating on Medicare and Medicaid litigation, health care regulatory compliance, administrative law and regulatory law. Knicole has tried over 2,000 administrative cases in over 30 states and has appeared before multiple states’ medical boards.  She has successfully obtained federal injunctions in numerous states, which allowed health care providers to remain in business despite the state or federal laws allegations of health care fraud, abhorrent billings, and data mining.  Across the country, Knicole frequently lectures on health care law, the impact of the Affordable Care Act and regulatory compliance for providers, including physicians, home health and hospice, dentists, chiropractors, hospitals and durable medical equipment providers. Knicole is partner at Practus, LLP and a member of the RACmonitor editorial board and a popular panelist on Monitor Monday.

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