Like the Medicare program, the Medicaid program also celebrated its 50th anniversary in July. Unlike Medicare, which is solely a federal health insurance program, Medicaid is a dual, federal-state health insurance program. That duality effectively creates 50 different public-sector health insurance plans for those eligible to receive coverage. It also adds to the program's complexity, which is projected to spend $544.5 billion this year caring for some 70.5 million recipients.

Billing Medicaid for health care services is no less complex, particularly for providers that operate in multiple states. Regardless of how many Medicaid programs providers are billing, there are five steps they can take to improve the Medicaid claims process, according to revenue cycle experts at RelayHealth, a McKesson health IT business unit.

“Providers can obtain a wealth of knowledge about their Medicaid claims process by collecting and performing a robust analysis of their Medicaid claim data. Armed with that information, providers can zero in on process improvements that will have the greatest impact on the bottom line.” —RelayHealth
Step 1: Know the type of claim you're eligible to submit and update your eligibility accordingly

Medicaid programs accept claims based on the type of care that a provider is enrolled or eligible to submit. For example, hospitals can submit claims for inpatient care, and doctors can submit claims for outpatient care. But if a hospital submits a claim for outpatient care or a doctor submits a claim for an inpatient procedure, the state can reject the claim simply because it's not in sync with what it has on record. Providers must be registered with their state Medicaid programs for all the types of care they provide and must ensure that they are eligible to submit claims for all the types of care they provide.

Step 2: Create, maintain and index an online library of enrollment and claim forms

Medicaid programs have multiple provider enrollment and eligibility forms and multiple forms for submitting claims for payment. The same is true of Medicaid managed-care plans and any payer that processes Medicaid claims. Providers can create, maintain and index an online library of all forms required to help facilitate claim submission and payment. Providers should make the library, which must include all instructions on how to use the forms, easily accessible to everyone in billing. Ready access to all enrollment, eligibility and claim forms and their instructions is one of the easiest ways to help ensure Medicaid claim acceptance and reduce administrative costs.

Step 3: Improve claim edit processes to keep edits up to date and to limit edit overrides

Before providers submit claims, they review — or edit — them against rules, regulations, requirements, exceptions, codes and modifiers that Medicaid programs use to determine whether they're legitimate and will be paid. Providers can improve the process two ways to ensure they're submitting clean claims in a timely manner, which, in turn, will result in accurate and timely reimbursement. First, providers must have access to up-to-date claim edits, a process that can be automated. Second, providers must have claim edit protocols that prevent overuse of unnecessary edit overrides by billing staff. Undisciplined or inconsistent overrides threaten clean claims and can result in rejected or delayed claims.

Step 4: Use advanced data analytics to identify claim processes that need improvement

One of the most effective yet least-used methods available to providers is analytics. Providers can obtain a wealth of knowledge about their Medicaid claims process by collecting and then performing a robust analysis of their Medicaid claims data. Doing so can uncover causes of delays in submission or payment, rejections and denials. Armed with that information, providers can zero in on process improvements that will have the greatest impact on the bottom line. They also can compare that information with revenue cycle benchmarks from peer providers to set goals for performance improvement.

Step 5: Leverage vendor relationships to improve accuracy and efficiency of claims process

Step 1 through Step 4 are tasks that can be done manually by billing department staff. But automating them via providers' claims management systems is the preferred and recommended way to make them all happen in an accurate, consistent and efficient manner. To that end, providers should leverage their relationships with their claims management/clearinghouse vendors to ensure they are leveraging that functionality in their systems. Once that functionality is utilized, providers can then work with their claims management vendors to adjust, update and customize those tasks as the complexity of Medicaid billing requirements grows.

When Medicaid billing problems arise, whether it's delayed payments, claim rejections or claim denials, it's easy for providers to point the finger at state Medicaid programs, which are stressed by expanded recipient rolls, limited budgets and overworked program administrators. A better response — and one that will improve a provider's own business health — is taking ownership of the Medicaid claims process and implementing the five steps above to make the process as accurate and efficient as possible.

To learn more about how providers can improve their Medicaid claims processing operations, see Five Ways to Improve Medi-Cal Claims Processing (2015). Offered on


About the author

McKesson editorial staff is committed to offering innovative approaches and insights so that our customers can get the most out of the health care solutions they have and identify areas for operational improvement, revenue growth and improved patient satisfaction. If you have a suggestion for a blog topic you’d like to see covered, let us know in the comments.