For health plans, coordinating benefits is challenging under the best of circumstances. Due to the complexity of payment systems, and a lack of data uniformity, interoperability and transparency, most plans rely on recovery vendors to identify third-party liability after claims are paid. It is a highly manual and inefficient system that results in overpayments going uncollected and significant increases in costs and labor efforts.

In many ways, Medicaid plans face the greatest challenges. In spite of ongoing efforts to improve the integrity of these programs, and a legal obligation for Medicaid plans to be the payer of last resort, in 2015, improper Medicaid payments reached a five-year high, according to a CMS report.

The CMS Transforming Medicaid initiative provides states greater flexibility to promote stronger accountability and program integrity. According to the agency, “In 2019, CMS will continue efforts to give states even greater flexibility to unleash innovation in their Medicaid programs as the states move toward more accountable, value-based payment delivery systems.”

One way in which health plans are supporting this key CMS initiative, and improving program integrity, is by pursuing strategies that move beyond pay and chase models and adopting ways to identify third-party liability before claims are paid. Health plans adopting this prospective approach have seen substantial savings over pay and chase models. In one report, CMS identified $1.23 billion in savings for Medicaid programs through prepayment reviews. In addition to greater cost avoidance, plans also benefit from an improved member experience, reduced provider abrasion and a more efficient process that requires far fewer internal resources. 

COB Smart is a national registry of coverage information gained exclusively from some of the largest health plans in the nation. This coverage information uniquely offers Medicaid agencies and health plans the ability to significantly improve program integrity. Participating health plans supply coverage information to the registry, where it is compared with data from other participating health plans to identify members with dual eligibility and/or multiple forms of coverage. NAIC primacy rules are then applied to determine the correct order of benefits and the information is returned to the applicable health plans.

COB Smart can be an effective approach to advancing the CMS Transforming Medicaid initiative by giving health plans the resources to improve coordination of benefits and program integrity. This prospective model saves time and resources, reduces reliance on costly third-party recovery vendors and alleviates administrative burdens.

Learn more about how COB Smart supports Medicaid plans.