Medicaid COB has never been more critical as states confront mounting fiscal pressure and federal funding cuts. Many states have already begun reducing their Medicaid budgets — even before the most significant federal reductions take effect. According to the Medicare Rights Center, states like North Carolina are slashing provider payments, while others such as Nevada are struggling to manage Medicaid programs that consume nearly a quarter of total state spending. Over the next decade, projected federal cuts could reduce Medicaid funding by as much as $1 trillion, forcing states to find new ways to sustain coverage and care.
While some policymakers view benefit reductions as the most effective way to balance budgets, cutting eligibility or optional services risks undermining the very people Medicaid was designed to protect. Instead of scaling back benefits, state Medicaid programs and managed care organizations can focus on improving efficiency, preventing waste, and maximizing payment accuracy. Doing so not only preserves access to care but also ensures that every Medicaid dollar is used for those who truly need it.
One of the most powerful levers for achieving this balance lies in addressing improper payments and improving Medicaid COB and third-party liability (TPL). Billions of dollars are lost each year because Medicaid pays for claims that should have been covered by another payer. Medicaid is the payer of last resort, but without real-time visibility into members’ other coverage — whether commercial, Medicare, auto, or workers’ compensation — many plans pay in error and must then attempt to recover funds after the fact.
This “pay and chase” model is expensive and inefficient. Recovery efforts typically yield only a fraction of what was paid — often around twenty cents on the dollar. The smarter, more sustainable strategy is to prevent these payments before they happen. That’s where technology solutions like ProTPL from Syrtis Solutions can have a transformative impact.
ProTPL enables real-time identification of other active coverage and primary liability before a claim is paid. By integrating with claims adjudication systems, it flags members with third-party coverage and helps to ensure the correct payer is billed first. This front-end, data-driven approach prevents waste, improves accuracy, and helps plans demonstrate measurable cost avoidance — all without reducing member benefits or provider access.
Improper payments continue to represent one of Medicaid’s largest and most solvable problems. The Centers for Medicare & Medicaid Services (CMS) recently reported an improper payment rate of 5.09% in fiscal year 2024, representing more than $31 billion in erroneous payments. Nearly 80% of these were not the result of fraud but of administrative and documentation gaps. Real-time Medicaid COB and TPL solutions directly address this issue, helping Medicaid programs meet program-integrity standards while protecting benefits.
For states and managed care organizations, the path forward is clear. By investing in proactive technologies and modern data integration, Medicaid programs can reduce unnecessary spending, strengthen program sustainability, and protect members from the harm of service cuts. Efficiency and accountability — not austerity — should define the next chapter of Medicaid reform.
Medicaid COB represents a clear opportunity for states to safeguard benefits while reducing costs. At Syrtis Solutions, we believe the future of Medicaid cost containment lies in prevention, not reaction. ProTPL is designed to empower plans with the actionable intelligence needed to identify third-party liability in real time, ensuring Medicaid dollars are spent wisely and responsibly. With the right technology and a commitment to program integrity, states can meet fiscal challenges head-on while preserving the benefits and care millions of Americans rely on every day.
