Inefficient state Medicaid billing and documentation systems waste provider time

Michigan frequently issues notices to providers about Medicaid billing/documentation system outages, workarounds, and makeup work required.

This raises the question: How does Medicaid compare to other insurance in such issues?

Not well, according to "A Denial a Day Keeps the Doctor Away" in The Quarterly Journal of Economics. (28 June 2023, Volume 139, Issue 1, February 2024, Pages 187–233)

Only this study's abstract is available outside the paywall.
https://doi.org/10.1093/qje/qjad035L

...Observing the back-and-forth sequences of claim denials and resubmissions for past visits, we can estimate physicians’ costs of haggling with insurers to collect payments. Combining these costs with the revenue never collected, we estimate that physicians lose 18% of Medicaid revenue to billing problems, compared with 4.7% for Medicare and 2.4% for commercial insurers.

Fortunately, details are quoted in the Economist Writing Every Day blog.

https://economistwritingeveryday.com/2024/03/21/medicaid-the-best-and-worst-health-insurance/

... Medicaid is the worst insurance for finding care, because many providers don’t accept it. One recent survey of physicians found that 74% accept Medicaid, compared to 88% accepting Medicare and 96% accepting private insurance. I always thought these low acceptance rates were due to the low prices that Medicaid pays to providers. These low reimbursement rates are indeed part of the problem, but a new paper in the Quarterly Journal of Economics, “A Denial a Day Keeps the Doctor Away”, shows that Medicaid is also just hard to work with:

24% of Medicaid claims have payment denied for at least one service on doctors’ initial claim submission. Denials are much less frequent for Medicare (6.7%) and commercial insurance (4.1%)

Identifying off of physician movers and practices that span state boundaries, we find that physicians respond to billing problems by refusing to accept Medicaid patients in states with more severe billing hurdles. These hurdles are quantitatively just as important as payment rates for explaining variation in physicians’ willingness to treat Medicaid patients.

For a great example of the headaches involved, I invite you to decipher the latest MDHHS notice. It came out yesterday.

Attention All Providers Impacted by Predictive Modeling (PM):

MDHHS is aware of the current issue preventing access to documents stored in DMP (i.e., Medical Request Letters, Medical documentation) when accessed via the claim. Until this matter is resolved, providers can access documentation through DMP using the CHAMPS External Links and search by beneficiary ID. We apologize for any inconvenience this may cause.

To view documents (i.e., Medical Request Letters, Medical documentation), access DMP through CHAMPS External Links:

     1. Access CHAMPS: click on External Links. Note: DMP will launch in a new window (make sure your pop-up blockers are turned off within the internet browser settings).

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     2. DMP Landing page

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    3. Review the DMP Overview resource for step by step instructions: Slide 8: Search Documents. Remember to search by beneficiary ID.