4 minute read 23 Aug 2023
Doctor in scrubs holding tablet in hospital corridor

Smart compliance for Medicaid

Authors
Andrea Danes

EY Global Human Services Leader

More than 28 years in Human Services. Focused on supporting governments in their use of data and program integration. Passion fueled by lived experience accessing services and role as foster mom.

Kipyn Miller

Senior Manager, Consulting, Ernst & Young LLP

Passionate about collaborating with those who serve the community to improve societal health and wellbeing. Career spanning more than 20 years supporting Medicaid, education and other health programs.

4 minute read 23 Aug 2023
Related topics Government and Public Sector
Upvote

Show resources

Helping state Medicaid agencies automate system compliance, while securing maximum federal support.

In brief

  • Systems that are noncompliant with federal regulations may be subject to corrective action and even a loss of federal funding.
  • States can benefit from new innovations in regulatory monitoring tools to help maintain this level of rigor and better safeguard their federal Medicaid funds.
  • States may use different tracking mechanisms for each of these steps and may also have different tracking mechanisms across different teams or program areas.

On May 24, 2023, the Centers for Medicare and Medicaid Services (CMS) issued a Center for Medicaid and CHIP Services (CMCS) Information Bulletin (CIB) that provided guidance regarding regulatory compliance requirements that states must meet to continue receiving a 75% federal match rate for ongoing operations of their Medicaid Enterprise System (MES). The bulletin emphasized CMS’ purview to periodically review and reapprove MES modules for smart compliance, as detailed in 42 CFR § 433.119. Systems that are noncompliant with federal regulations may be subject to corrective action and even a loss of federal funding. Considering that CMS spends $5 billion annually on state Medicaid technology, states that are found to be noncompliant with CMS requirements may be at risk of significant funding deficits. CMS has indicated that it does not expect to withdraw federal funding until after the COVID-19

Public Health Emergency (PHE) unwinding has been completed; however, CMS may begin assessing compliance before then, making the call to action for states immediate.

The key question facing states is how they will confirm that their MES is fully compliant with all existing federal regulations and applicable sub regulatory guidance. While states could manually review each individual regulation in the Code of Federal Regulations (CFR), refer to historic State Medicaid Director Letters (SMDLs) for additional guidance or even review the state’s own project documentation from when legacy regulatory changes were implemented, there are more efficient ways to confirm their compliance. Tools and technologies exist that can support states with this effort. Technology such as artificial intelligence (AI), machine learning, automation and data-driven dashboards can help states:

  • Ingest regulations, policies and other documents to identify rules
  • Automate rule mapping to responsible units or systems within the agency
  • Collect evidence of compliance and build a longitudinal repository
  • Test current MES functionality to assess compliance
  • Report compliance status in real time through user-based dashboards

While there is an immediate need for states to confirm their current compliance, CMS also plans to continue monitoring smart compliance on an ongoing basis. Now is the time for states to build a long-term, modern strategy for approaching risk and compliance to protect their federal funding. A modernized strategy includes leveraging tools that can increase the efficiency and accuracy of regulatory identification, implementation, reporting and continued compliance. This long-term approach can enable states to:

How EY can help

Government & Public Sector services

Our Government & Public Sector community brings together more than 20,000 EY people from over 100 countries. All of us share a passion to help governments work better for their people.

Read more
Health & Human Services

Our Health & Human Services team works nationally with state agencies charged with administering Medicaid, eligibility, enrollment, child support, public health and other human services functions. Our professionals are former state health agency leaders, industry thought leaders and top technology and platform experts who help our clients deal with their varied challenges.

Read more

  • Reduce manual processes

    Government regulations can be lengthy and reviewing their supporting documentation, such as Federal Register entries and SMDLs, adds to the level of effort needed to digest a regulation’s full intent. The manual effort needed to monitor, identify, and review these documents is not a small task. Capitalizing on the efficiencies that technology can offer to support this process could reduce the burden on state staff. Leveraging tools such as AI could parse out regulations into the obligations that need to be followed, making it easier for agency staff to identify and manage the necessary changes. Technology can also be used to trigger the identification of changes to existing regulations, and even escalate changes based on risk profiles.

  • Decrease financial risk

    Both the accurate interpretation and accurate application of federal regulatory requirements are critical for state Medicaid agencies to run a compliant Medicaid program. If this level of accuracy doesn’t exist, then states are at risk of CMS issuing penalties, including the potential loss of funding. States can benefit from new innovations in regulatory monitoring tools to help maintain this level of rigor and better safeguard their federal Medicaid funds. Examples include technology that can automatically test requirements using an analytics-based approach and generate dashboards to monitor compliance.

  • Consolidate tracking

    Identifying a regulatory change is just the first step in the tracking process. States must also track whether a regulation is required or optional, what the impacts are, how the state will implement the changes, confirmation of the implementation results and other key functions needed to make a Medicaid policy change. States may use different tracking mechanisms for each of these steps and may also have different tracking mechanisms across different teams or program areas. Having a single consolidated system for tracking all Medicaid regulations across an agency can better enable agencies to make sure that nothing slips through the cracks and that regulatory changes implemented in one area don’t conflict with other areas. This level of regulatory change management can also be supported through automation of certain functions, such as technology that can absorb regulatory language and automatically map it to agency functions or programs.

  • Apply a consistent interpretation of regulatory requirements

    The requirements for a government program as large as Medicaid should not be left up to subjective interpretation. The risk of noncompliance has serious implications not only for the state agencies that administer the program, but also for the people who depend on Medicaid for their health care. When agency processes are person dependent, different staff members may interpret a regulatory requirement differently. Even with supporting guidance such as SMDLs, there are risks to a requirement being misinterpreted or even missed. Using modern technology such as AI, paired with human review, to apply a consistent identification of regulatory language based on standardized rules can support states in their Medicaid program administration.

    Benefits such as those listed above are just the tip of the iceberg. Since each state has its own unique processes and approach to managing its Medicaid program, individual states could realize additional benefits to modernizing their regulatory compliance strategy based on their unique circumstances. Focusing on enhancing a state’s Medicaid regulatory compliance approach and toolkit will help states both meet CMS requirements and deliver a program that effectively serves the people who depend on Medicaid for their care.

Summary

Medicaid is governed by a complex network of both state and federal regulations, which can be challenging for stakeholders to navigate. This includes navigation by the state agencies that administer the program, as agencies have to identify regulatory changes, interpret them, implement them and then manage ongoing compliance. Given the hundreds of Medicaid regulations that exist, this can be a daunting task.

About this article

Authors
Andrea Danes

EY Global Human Services Leader

More than 28 years in Human Services. Focused on supporting governments in their use of data and program integration. Passion fueled by lived experience accessing services and role as foster mom.

Kipyn Miller

Senior Manager, Consulting, Ernst & Young LLP

Passionate about collaborating with those who serve the community to improve societal health and wellbeing. Career spanning more than 20 years supporting Medicaid, education and other health programs.

Related topics Government and Public Sector
Upvote