29 May STATES ADDRESS MEDICAID COSTS WITH REFORM AND TECHNOLOGY
With the passing of the Trump administration’s spending bill in the House, Medicaid is at the center of the healthcare policy conversation. The program now consumes roughly one-third of most state budgets, placing enormous strain on state finances. Medicaid expansion and pandemic-era policies have driven enrollment to record highs, and with that, the cost of maintaining the program has surged. Now, as states across the country face growing budget challenges, many are searching for sustainable solutions that preserve access while reining in waste and inefficiency.
At the heart of the problem is a staggering level of improper payments. According to CMS, Medicaid made over $50 billion in improper payments in FY2023, with nearly 80% resulting from insufficient documentation and the inability to verify eligibility. Over the past decade, that figure has exceeded $543 billion nationally. These losses are not only unsustainable—they weaken the integrity of the program and divert resources away from those who truly need them.
States Taking Action: Policy Reforms on the Rise
Several states are attempting to address the issue by implementing legislation aimed at restoring Medicaid integrity and improving oversight:
- Indiana’s Senate Bill 2 eliminates self-attestation for Medicaid eligibility, requiring regular cross-checks of applicant data against federal tax records, state wage reports, and other government sources. The bill also mandates quarterly reporting on improper payments and fraud recoveries.
- Texas has enacted measures to leverage federal tax data and third-party databases for verifying eligibility, while investing in modernized systems to automate these checks.
- Florida and Missouri have passed laws requiring frequent eligibility redeterminations and enhanced oversight of Medicaid Managed Care Organizations.
- Arkansas and Georgia have reinstated stricter eligibility reviews and data-driven redetermination procedures, aiming to ensure continued eligibility and reduce enrollment errors.
- Some states, like Indiana and Arkansas, have also included work requirements for certain Medicaid beneficiaries, alongside efforts to enhance verification of income and employment status.
These reforms reflect a broader trend: states recognizing that outdated systems and lax verification processes have allowed Medicaid to become bloated, inefficient, and vulnerable to fraud and waste.
Technology: The Key to Cost Avoidance
While policy reform is essential, states cannot achieve meaningful cost control without the support of modern technology. That’s where solutions like ProTPL from Syrtis Solutions come in.
ProTPL is a real-time, automated platform that identifies third-party liability (TPL)—ensuring Medicaid is the payer of last resort. This technology enables Medicaid plans to:
- Avoid improper payments before they happen, not just recover them after the fact,
- Automatically flag pharmacy and medical claims with active other commercial coverage.
- Reduce administrative burden, minimize manual verification, and improve audit readiness,
- Enhance compliance with federal cost avoidance and COB regulations.
This shift from reactive to proactive payment controls is critical. With tools like ProTPL, Medicaid plans can improve operational efficiency, lower costs, and better serve members, without reducing benefits, waiting for lengthy legislative cycles, or resource-intensive manual processes.
As states grapple with Medicaid budget cuts and rising costs, there’s growing consensus that preserving the program’s future requires both strong governance and smart innovation. Legislative reforms that promote transparency, accountability, and real-time oversight are an important first step. But to truly make these reforms work at scale, state Medicaid plans must adopt advanced technology that can deliver a measurable impact today. States that act decisively—combining good policy with proven technology—will be best equipped to reduce fraud, cut unnecessary costs, and ensure Medicaid serves those who need it most.