Third-party liability (TPL), the function that protects Medicaid as the payer of last resort, is a multi-layered process. From as early as enrollment, there are many potential points of failure along the eligibility and claims payment continuums that, without adequate controls in place, could leave stakeholders vulnerable to myriad risks.
An effective TPL program ensures the appropriate coordination of benefits and care for Medicaid fee-for-service and managed care members — approximately 10% of whom are estimated to have access to other coverage. Maintaining these activities throughout the member lifecycle is equally complex and critical, making strategic partners with direct and proven experience vital to the effort.
When evaluating potential TPL contractors, prioritizing a few key attributes can help ensure you’re building a robust program equipped to address all critical areas of cost, quality and compliance.
- 5+ Years of Direct Medicaid Agency Experience
In a dynamic field such as healthcare, it is important to maintain a competitive and balanced procurement environment. However, this should not come at the compromise of performance, of which experience is a key indicator.
Due to the complex and evolving nature of Medicaid TPL, direct and longstanding experience should be a primary criterion in selecting a partner to help navigate these efforts. Suppliers with an extensive track record supporting a diversity of state Medicaid agencies and managed care organizations (MCOs) offer a broad and intricate understanding of program needs and stakeholder involvement. And because Medicaid has a limited reclamation window, it is imperative that TPL partners have the infrastructure in place to get your program up and running quickly and efficiently.
- Established Data Use Agreements
Identifying other coverage in today’s complex health insurance ecosystem requires a robust and current set of eligibility and claims data, with contributions from payers across all plan types, including commercial, dental and long-term care. Securing data use agreements (DUAs) with these key stakeholders is a complex and legally intensive process that can take up to several years to finalize.
For newer entrants into the TPL market, data limitations can be both a barrier to entry and a risk to the payers they serve. An insufficient data infrastructure can generate false positives and low match rates, resulting in delayed or foregone savings and potentially putting highly sensitive information at risk. In considering TPL contractors, it is important to assess the breadth and diversity of DUAs they hold to ensure they are well positioned to deliver value from day one.
- Innovation in Data Matching
Without a truly interoperable healthcare system and unique patient identifier, matching individuals to their health data is one of the industry’s greatest and most pressing challenges. Not only can matching errors potentially compromise protected health information and negatively affect the revenue cycle, but they can also result in an individual being wrongly denied coverage — in some cases, at the point of service.
With a robust data source as the basis, today’s TPL contractors should make use of advanced analytics and data science techniques to match individuals to third-party coverage with pinpoint accuracy, accounting for a wide array of data imperfections (e.g., incorrect or out-of-date information, common name matches and slight variations in demographic data). Well established and experienced partners have had the opportunity to develop and refine matching algorithms over several years, ideally applying machine learning technologies to drive continuous improvement in accuracy.
- Electronic Billing Capabilities
Electronic billing may seem like the price of entry in modern healthcare, but manual, even paper driven processes are still very much in practice, exacerbating the already heavy administrative burden of reworking claims. Not only is this poor practice from a stakeholder relations standpoint, but it can substantially delay — if not erode — savings and recoveries for healthcare payers. At a minimum, your TPL partner should have electronic billing in place to streamline these processes for the liable party, increasing the likelihood and timeliness of payment.
- Provider Sensitivity & Engagement
Providers are integral to Medicaid’s ability to serve its members. They are also central to the TPL process, particularly with regard to disallowances, which drive significant return on investment for Medicaid. TPL services must therefore be conducted in a manner that is sensitive to the needs of these vital stakeholders, ensuring activities are not disruptive to their ability to deliver quality care.
TPL partners that understand these sensitivities and have the demonstrated ability to enroll providers in a timely manner are best equipped to drive value for state agencies and MCOs. Some, like HMS, have even developed formalized provider relations programs to mitigate abrasion around TPL processes and strengthen the payer-provider relationship.
- Highly Secure Data Environment
Healthcare data security is fundamental to the integrity of Medicaid. When outsourcing health information management services, you need to be certain that your suppliers have stringent protocols in place to protect against data breaches and resulting fraud.
A TPL contractor’s data security is substantiated through both accreditation and reputation. Partners should be certified according to HITRUST CSF, an industry-standard data security framework, and maintain a regulatory track record free of data breaches. Partners with the longstanding experience to have built a robust data security program and the agility to continuously adapt to ever-changing regulations are key to protecting your members, your provider network and your organization from risk.
Experience Drives Value
Because costs for Medicaid TPL are largely a percentage of recoveries, procurement scoring should be weighted heavily toward technical capability and experience. This ensures the highest value from your investment, while avoiding the risks of partnering with unqualified vendors or managing multiple, disparate solutions.
HMS is an HITRUST-certified partner to 300+ health plans and 40+ Medicaid agencies, with more than 45 years of experience coordinating health benefits and maximizing healthcare dollars.