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Effectively Cutting New York's Medicaid Costs

May 5, 2011
By Vanessa DeSantis 

Experts agree that one of the biggest problems with New York’s budget is the inflation in health care costs. This needless inflation adds hundreds of millions to the costs of the state Medicaid program.

CEO, Joseph B. Stamm and CFO, Helen Mutchler, MedReviewThe cost cutting experts at NYCHSRO MedReview have ideas to help. MedReview president and CEO Joseph Stamm and executive vice president and CFO Helen Mutchler testified before Governor Andrew Cuomo’s Medicaid Redesign Team.

Here are some of their key recommendations:

1.    REGULATE PROVIDER CHARGES - Presently there are no limits to what health care providers can charge for services. New York should  create a State Commission that regulates these charges. This initiative has been instituted by states like Maryland to successful effect!

2.    ELIMINATE CONFLICTS OF INTEREST - Right now health insurers who offer emergency health care coverage may have an incentive to disallow medically appropriate inpatient admissions, which can lead to the premature discharge of a patient from the hospital. Conversely, some hospitals insist insurance companies must pay for at least a one-day stay at the hospital even if the patient was only there for an hour long visit. The insurer has little incentive to challenge the policy, often choosing to “play nice” to achieve or maintain its status as the preferred provider. The solution is simple: weed out the blatant conflict of interest by having such determinations made by an independent review agent with no potential financial motivation.

3.    ALLOW FOR FURTHER REVIEW OF SERVICES - Currently, once the provider gets a service pre certified, no further review is permitted even in cases of unjustifiable costs, fraud and abuse, etc. Retrospective reviews should be allowed as long as the reviewer uses the same criteria as the initial certifying agent.

4.    REQUIRE MANDATORY REVIEW AND CASE MANAGEMENT FOR FEE-FOR-SERVICE MEDICAID RECIPIENTS - There is still a significant portion of the Medicaid population that is reimbursed fee for service due to an inability to get them enrolled in managed care organizations. These patients are primarily in rural areas or have special needs. New York State should require mandatory pre certification review and case management for these patients and assign independent agents to perform the activity.

5.    VALIDATE DIAGNOSIS CODES TO SAVE COSTS - Coding a diagnosis can have a huge effect on health care costs. If that code is misassigned, it can result in costly reassignment of the diagnosis later on. To keep costs down, independent agents as opposed to insurance or health care providers—should be employed make sure codes are properly verified in the first place!

6.    PUNISH NEGLIGENT PROVIDERS BY REFUSING TO PAY FOR THEIR MISTAKES - Serious adverse events such as ones caused by incorrect or inappropriate drug administration, incorrectly interpreted tests, hospital acquired infection etc., should be discouraged by the implementation of effective punitive measures so that provider negligence is decreased and the overall quality of patient care is improved.

7.    REVIEW FOR INAPPROPRIATE READMISSION - New York State should go back to reviewing patient readmission on a claim by claim basis, not only because the financial overpayment recovery is immediate but also because the quality of the patient care is more directly impacted.

WHAT WE CAN CONCLUDE FROM THIS: It is NYCHSRO/MedReview’s belief, based on 35 years of ongoing experience, that implementation of these recommendations can save the State’s Medicaid Program hundreds of millions of dollars.

NYCHSRO/MedReview is the oldest Utilization Review (UR) organization in New York State with more than thirty five (35) years of continued service and a staff of more than 300 full-time physician, nurse, coding and other health care professionals. It is a Quality Improvement Organization (QIO) like entity as designated by the federal government and a UR agent certified by the New York State Departments of Health and Insurance.

NYCHSRO/MedReview has performed Quality and Utilization reviews on more than three million (3,000,000) records and has a proven track record of verifiable savings and effective Cost Benefit Ratios.

Over the past twenty years, savings for clients has totaled in excess of one Billion dollars ($1,000,000.000). Presently, NYCHSRO/ MedReview completes more than 10,000 reviews each month.

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