A New York state system that keeps on giving

It’s the system that keeps on giving. I’m referring again, of course, to New York State’s Medicaid program — the massive, $52-billion-plus health care delivery system that’s long been plagued by abuse, fraud, and waste. The latest alarm, from a recent article in the Wall Street Journal, highlights New York’s ongoing and increasingly costly effort to modernize its Medicaid billing system. According to the WSJ report, “Over the past decade, the state has paid a Virginia-based IT company nearly $1 billion to set up and operate a Medicaid billing and processing system hobbled by delays, cost overruns and programming flaws.”

New York’s State Medicaid system management information system, known as eMedNY, is the largest of its kind in the nation. It’s intended to serve as Medicaid’s operational base, if you will, for financial reporting, quality control measures, auditing and fraud prevention. In other words, it should function as the hub of New York’s administrative oversight and, as such, it should be the place to ensure effectiveness and efficiency.

But it hasn’t worked. According to one top state health official quoted in the article, “…eMedNY admittedly limits the state’s ability to introduce programs that could help control fraud and abuse through better claims management.” That speaks for itself. It also leaves me asking a few questions. For one, does the current system prevent the more widespread utilization of cutting-edge technology like that developed and fine-tuned by the Horseheads-based Salient Corporation? If it does, that has to change. The Salient technology can work to prevent fraud, mismanagement and other waste.

For proof, we can look at its successful utilization right here in Chemung County. Salient is a key piece of Chemung’s Medicaid managed care project, Priority Community Health Care, and it’s already produced significant savings in its first year of operation. By having the right information in a timely manner physicians and staff can better identify the needs of patients and better oversee the system’s utilization. Salient allows the clinic to see if patients have filled their prescriptions, received blood tests or x-rays, or visited a specialist they were referred to. With this information, Priority Community Health Care can assist their patients follow the directions that will help them stay healthy. That is the only way to really save money when it comes to health care.

But maybe most of all, the WSJ analysis begs this question: why has the state tolerated, for so long, such a key oversight mechanism that clearly doesn’t work? The state began looking for a replacement system in 2007 after numerous reports kept pinpointing these shortcomings. According to the state comptroller’s office, state audits conducted between 2006 and 2010 revealed an alarming lack of oversight of Medicaid’s payment functions and that eMedNY’s failure to prevent billing mistakes resulted in more than $450 million in overpayments.

All of this comes on the heels of a new study in Health Affairs showing that the nation’s mid-Atlantic region, including New York, has the highest Medicaid spending in the nation – spending per beneficiary was $1,650 above the national average with most of this overspending, in another important revelation, the result of overuse of medical services. That’s a point that sometimes gets overlooked in the more dramatic and sensational reports of fraud. But overutilization, clearly a product of mismanagement, is a prime driver of unnecessary costs – and, again, it’s exactly what Salient can address so effectively.

Which brings me back to the overall oversight of this sprawling and enormously expensive system. It’s why the WSJ article remains so troubling. Governor Cuomo’s administration remains committed to the change so clearly needed, but they cite the need to carefully consider the change in the context of New York’s other evolving Medicaid reforms as part of this year’s state budget. Fair enough. We need to get this right, but it’s equally important to pay heed to the urgency to get it done.

On a related note, the governor recently nominated a new Medicaid Inspector General, thereby opening the door to a new era of combating Medicaid abuse, fraud and waste. We have to walk through that door. We’re coming off a 2011 legislative session that’s being recognized as productive in many key areas. But there’s important work ahead. Just ask any local official about the ongoing burden of affording Medicaid and its impact on local property taxpayers. It’s the single mandate that these officials pinpoint for reform, and it clearly deserves all of the priority attention we can give it.

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