Medicaid Payment Reconciliation Software: 6 Questions to Ask

Poor payment reconciliation processes can cost Medicaid managed care organizations (MCO) millions of dollars annually. Manual reconciliation processes waste time and still result in revenue leakage. Medicaid MCOs that leverage internal technology teams to build automated reconciliation solutions may experience time and cost overruns.

As a result, Medicaid MCOs turn to vendor Medicaid payment reconciliation solutions that offer an automated, turnkey solution. Not all Medicaid reconciliation solutions are equal, however.

High-performing Medicaid payment reconciliation software has two main attributes:

  1. The ability to generate anticipated payments – Generating anticipated payments can be complex because the solution needs to ingest eligibility, rate, and other data to create transactions. 
  2. The ability to compare actual to anticipated payments – Reconciling payments means ingesting payment data and comparing real to expected payments.

With those requirements in mind, here are six questions to ask vendors when reviewing Medicaid payment reconciliation software.

How long does it take to implement?

You can get a good idea about configurability by asking how long it takes to implement the software. If it’s a matter of months, that’s a good sign. If implementation takes longer, try to understand why.

You also want to learn about your time commitment. Will implementation require a significant amount of time every week? What is the meeting rhythm? Is a designated project manager assigned? Solutions without clearly defined implementation processes or that require a significant amount of time could be a red flag.

For Medicaid MCOs expecting to expand their footprint, it’s also important to ask how long it takes to set up new states. Each state has different inputs and outputs and will likely require additional configuration. Again, if adding new states takes months, that may be another red flag that the solution isn’t configurable.

How frequent is the reconciliation?

One goal when introducing reconciliation software is to automate and improve the reconciliation frequency compared to manual processes. As a result, you’ll be able to submit discrepancies to the state faster for review. Because reconciliation relies on payment data, you’ll likely want to run that reconciliation each time the state delivers payment information. That could be weekly or even more frequently. Ideally, the software automates reconciliation after payment file delivery.

Is the Medicaid payment reconciliation software interface user-friendly?

You’ll likely be using the reconciliation software to review data, whether that’s beneficiary information, payment information, or variance reporting. Ask to see the user interface to ensure the software solution is easy to use.

Ask to see reports as well. Are standard reports available? If you need a unique report, how is it generated? What formats does the software make available for data extracts?

Also, ask if single-sign-on (SSO) is available. Single-sign-on enables you to use existing user permissions to sign on to the reconciliation software. Users don’t need a disparate login, and SSO delivers faster access to the software.

What’s the reconciliation output?

Most states have a format that MCOs are required to use to report mismatched payments. You’ll want a solution that, at a bare minimum, either outputs to that format or makes it easy to create that format.

Other reports can also help you track and manage payments, sending that data to your general ledger for revenue accounting. Or, you’ll likely want an aging report. Ask the vendor what additional reports are accessible, and what file format exports are available. At a minimum, they should include PDFs and CSVs.

How detailed is the variance reporting?

A beneficiary’s actual payment fails to match their expected payment. Now what?

A surface-level “payment mismatch” isn’t helpful. It may be a mismatch because the cohort differs between the state and your MCO. A retroactive change may cause a mismatch. It may mismatch because you’re missing beneficiary information.

Whatever the case, the more you know about the underpayment, the more likely you will understand the root cause. That can help you avoid future mispayments.

How does the Medicaid payment reconciliation software scale?

Your Medicaid beneficiary count may grow over time. You may acquire MCOs, enter new markets, or economic factors may lead to increased Medicaid enrollment. As a result, you want to ensure your reconciliation solution can scale to meet increased demand.

Modern reconciliation platforms use cloud-based technology to achieve scale. For example, we use Amazon Web Services (AWS) infrastructure technology. We’ve engineered our solution to leverage AWS elastic technology that can add and remove virtual computing resources in real-time should demand increase. That results in faster processing times and, should your Medicaid population increase, makes it easier to reconcile those larger populations.

Certifi’s William™ platform helps managed care plans reconcile Medicaid capitated payments, recapturing lost revenue and ensuring accurate payments.

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