Dr. Leo Damasco and Phoebe Gutierrez unpack the latest Medicaid budget cuts and Medicare Advantage audits, offering telemedicine physicians critical insights to protect their practice and ensure compliance in a shifting healthcare landscape
In this episode, co-hosts Dr. Leo Damasco and Phoebe Gutierrez dive into the major changes impacting Medicaid and Medicare Advantage plans. They explore proposed Medicaid budget reconciliation changes, including work requirements, increased eligibility documentation, and reduced state autonomy, and their impact on physicians and vulnerable patient populations. Phoebe sheds light on the intensified Medicare Advantage audits, with CMS hiring 2,000 additional reviewers to address fraud, waste, and abuse, targeting an estimated $17 billion in overpayments.
Telemedicine physicians will learn how to safeguard their practice through proper documentation, understanding medical necessity, and avoiding pitfalls like upcoding or AI-driven coding errors. This episode is a must-listen for physicians working with federal healthcare programs or exploring entrepreneurial opportunities in telemedicine.
Three Actionable Takeaways:
Everybody welcome back to telemedicine Talks. So this episode we're gonna just focus a little bit on kind of like educating and sharing a little bit about, , some of the key changes that are happening at the federal level and how you as physicians either working in telemedicine or thinking about jumping into telemedicine, can, really protect yourself, ESP.
Especially if you're working with any Medicare Advantage plan. So, um, I'm gonna share some information about the Medicaid, cuts and what that really means in terms of, just some key things that physicians are gonna just need to think about and what they mean from a patient perspective.
Um, and then also I really, really, really want to. You know, share some of the key updates on the Medicare Advantage plan audits. And while, most physicians don't think that's going to impact them, I want to respectfully disagree and really explain what happens [00:01:00] when, a health plan gets audited, and ultimately how it really does fall on the provider who is, , doing the service.
I'm gonna exclamation point that you just made too, because, you know, when, when you brought up this subject I'm like, oh, great Medicaid. I needed to go look up for that. But looking up especially about this audit subject, and we're gonna go into more about it, , this is gonna be , very relevant to us as physicians and really telemedicine physicians on how we practice, how we document, and how we approach things.
Especially if you're trying to. Like you said, create your own business. You know, you're this budding entrepreneur. You're gonna have to pay more attention to this. Um, because yeah, it's gonna cut in your bottom line. It's gonna change how you do things nowadays.
, Unless you're gonna go strict cash pay, which is now becoming less and less, more common. Right. And more telemedicine, companies are relying on payers, Medicare, Medicaid, . This is gonna be very important. So Phoebe, thank you so much for [00:02:00] bringing up this topic. Can't wait to hear more. Yeah.
So I'm gonna do just a quick, like key update on the, budget reconciliation and what's going on right now and what some of these like, key changes, , mean. So, , as many people have heard, and there's lots of physicians out there that have sparked some like outrage.
I kinda wanna explain a little bit about what of these like. Proposed changes mean mainly on one, how it's gonna impact physicians, but also how it's just gonna impact patients. Um, so just to do like a quick recap, like Medicaid is like the country's like safety net. So low income, disabled individuals, pregnant women, the sick of the sick, the poor of the poor.
You know, basically, Medicaid is based on, you have to meet what's called federal poverty limits, and each state sets what that is. Ultimately, you have to basically make very, very, very little money to even qualify. Um, we're talking, I think, like an individual person, let's [00:03:00] say, you know, $15,000 a year.
I didn't research that, but I probably should have. Um, but it's, it's a low number and I think that what I'm trying to emphasize is, , as there's gonna be. Kind of like media around like, oh, like it's, it's a population that just does not have a lot of money or is also like very, very sick.
So some of the key changes proposed are imposing requirements, like work requirements in order to be eligible. Um. It's a little problematic given that one, , a lot of people wanna work. It's really hard to , find jobs and, , there are some stipulations saying like, you could volunteer, you could do community service.
Again, like , it's just the population, which is just gonna be, I don't know, it's an extra hoop that a already hard population is gonna have to jump through. The key issue here is the actual documentation of it. So it's not as simple as you have to have a job. It's like this like monthly reporting process that people are gonna have [00:04:00] to have their employer sign off on, submit to the, like, the state government, federal government,, and like what the, what those hoops look like.
Like I'm a, I'm really bad with paperwork. , I couldn't imagine having my healthcare tied to a monthly submission. So one key thing is like. Can administratively like the states even handle this? And also like, are people going to be able to support it there? One of the key states, there's a couple states that have this active today, uh, Georgia being one, and the individual who actually was like the face of like work requirements for Medicaid, he has actually come out and been like.
, My healthcare has gotten canceled multiple times for like a paperwork error and then in order to get back on and he had a job, like in order to get back on, he said he had to just like it, it was just, it was a nightmare. And so he's actually saying like, it, this whole thing doesn't work. It doesn't drive people to be more [00:05:00] employed.
It doesn't do anything, but just like already kind of pick on a population that's already kind of struggling. The other one is they're gonna have to submit., Eligibility documentation twice a year versus once a year. Again, just administrative hurdle after administrative hurdle. Um, imagining have to having to file your taxes twice a year.
So it's, it's something like that where you're gonna have to submit all this paperwork by a certain deadline, , pray and hope that it gets there on time, gets reviewed on time, and you get to your eligibility. Part of these things are, you know, my idea of if they can potentially deem people ineligible due to some of these, like paperwork errors or issues, , of course that's gonna save on Medicaid dollars because you're gonna have less people that are eligible.
But it's not necessarily saying that those people aren't deserving of the care. It's gonna just be, again, the hurdles that are gonna create some, issues. I think there's a few other kind of like [00:06:00] key things. Um, it's kind of sh taken a little bit of like state's autonomy to be able to determine what their benefit packages are.
So there's a lot on immigration and undocumented immigrants. California is a state that currently has, we call it wraparound services. So whatever the feds don't cover for certain populations, the state of California comes out of pocket and goes, we're gonna, we're gonna cover you regardless of what they say.
I. Undocumented immigrants are one of those wraparound services that we cover today. I wrote the regulations, so now I'm like, oh, they're, they're gonna unw. So you know it like, oh yeah, I, I didn't I regulations take years. But I was like, I was the first one where I was like, all right, let's, let's start figuring out how we're gonna get this into, like actually write the regs.
Um. So basically what, what the federal government is saying is if you continue to do that, you can, we're gonna reduce your federal matching by 10%. [00:07:00] And for a state like California, that's, that's something that like 10% or just those instances like yeah, 10% federal matching of funds, which is. That's huge. A lot of money.
Yeah. Huge. And so they're putting states in , these, you know, positions where they are having to kind of pick and choose between, like do we do the right thing as a state or do we, you know, kind of have to keep, keep afloat, not go super negative into the budget. Um, so those are, those were kind of like some of the three key areas that I focused on.
There's some other ones they're changing. Um, you know, a CA enrollment, so if you're enrolling through a marketplace, um, they're shortening the amount of time that you can do that. They're shortening special enrollment. So if like. You lose access today if you, if you have no access, right? Like you, you get fired or something were to happen, you could enroll year round.
Um, and they're changing those requirements to basically say you can only enroll like once a year during this timeframe. And it's like trying, [00:08:00] they're, you know, very short. Um, again, hoping people like miss it. Um, and then there's some other things again, like around tax reimbursement and, and certain, certain areas.
Um, you know, in, in the Medicaid world, I'm, I'm very curious to see kind of like where it all lands, of course, um, especially in California and how California's gonna take it. And, um, I think the one thing I will say is watching it unfold has been. A little sad for me. Um, a lot of these programs were things that I actually had a very close hand in writing and creating and establishing In California, I.
And it does break my heart a little bit to see some of the things unwound. I don't know if you remember Leo, but like my first job in healthcare was implementing the Affordable Care Act in California . And so to me you're taking my baby and dismantling it a little [00:09:00] bit.
And yeah. But tho you know, again, the way that, how I see this kind of playing is again, you're going to see a lot less physicians wanting to work in Medicaid given some of the changes to reimbursement given to, potential lower, eligibility for folks. And then ultimately, you're going to see.
Companies probably focus their attention on other populations, which again, is just gonna create more and more access issues for an already, like dire situation. It's it's really hard already to get doctors to wanna support Medicaid, members given the reimbursement rates.
Yeah. So it's just gonna make that problem bigger. Yeah. It leads to wonder, a lot, I know personally I'm working with a lot of companies right now that are trying to woo kind of Medicaid providers, Medicaid insurers and how that's gonna change, if the [00:10:00] reimbursements are gonna go down, and some of these providers, I definitely believe in their mission and they mean well.
But yeah it's not gonna be sustainable. And you're right. We're gonna have this huge hole. This population that may not be able to get services. They won't really. They won't. Yeah. And what's gonna happen, downstream, are they gonna, are, it's not you could say, oh yeah, then they could turn to cash pay.
But you're talking about, this population, this is why this population exists. They can't turn to cash pay. They're really not going to have that many options. You're, gosh, the ER's gonna get flood. And I know this telemedicine talks, but. Brick and mortar ERs is gonna get flooded. Maybe, I don't know, maybe cash pay services are gonna go up, but again, they can't pay. So I don't know. It's gonna be interesting to see what the downstream effects of this is gonna be on the medical system as a whole. But you're right. It is sad that there's gonna be this hole in this and for this population, for the care.
Yeah. And even for the people who do stay eligible, right? They are [00:11:00] recommending copays. They're in Medicaid world it's called like a share of cost. Yeah. But basically it's it's a copay. But again, you're talking about a population that. Makes little to no money. And so even having something where it goes oh $5 to go see a pediatrician or to go see, to get a certain prescription it is going to create like a barrier to care.
There are certain, like exclusions, I shouldn't have said pediatrician, 'cause like children's services are excluded. Yeah. So there are certain exclusions there, but again, like it just. It just makes it hard and for somebody who, like I'm completely self-made, right? There were, self-made young mom, like there were days where, and I wasn't on Medicaid.
I was a government worker, which is, I probably should have qualified for medication. But, yeah it's like stuff is really hard and like you have to like really clearly be like, yeah. Am I gonna, am I, should I go to the doctor or should I put food on the table?
And I think that , the [00:12:00] whole reason to have the safety net is you don't have to choose. You get access. There should be no barrier. You need transportation. It's there. You need, a prescription. It's there. And again, I think you're just gonna see people like, use the services less.
Yeah. That could potentially, like I. Benefit a little bit on the physician side. A lot of the health plans rely on capitation. So they have, capitated rates, per member per month where they get a fee. So if you're not seeing people, ultimately, like the health plans are gonna make money, which allows them to, negotiate better rates with, providers.
Again, it's like a double-edged sword. Yeah. Yeah. No, totally understood. All right. You wanna jump into Medicare now? Oh yeah. Let's go do it. Isn't that the same thing? Okay.
One would think, one would think so. I. As somebody who like literally had such a close hand in working very closely with [00:13:00] California auditors when the news broke that CMS was hiring 2000 more, basic like billing reviewers to detect fraud, waste and abuse, like I knew it's about like it was gonna hit the fan for a lot of.
Providers, value-based care companies, anybody who is doing anything in Medicare Advantage right now. And I think the interesting thing is as you talk to physicians and as you talk to, as you talk to the actual providers, they are not at all thinking about. How this is gonna impact them.
And I wanted to really emphasize that these companies that you're working with, or the health plans that you are, partnering with, are supposed to be overseeing and monitoring for accuracy, for compliance and. [00:14:00] Most may do a decent job and now you actually have the federal government that is going, we're not just looking at 30 Medicare advantage plans or 50 Medicare.
We're looking at all, and we're gonna get completely caught up. I know we've talked in the past, Lee, about how usually like audits are done like three, three years in arrears. Yeah. And they're like, no, like we are going to look for overpayments and they're estimating real time. Real time and they, I mean they put out an RFIA request for information, basically saying who can help us build some like tech tools to make this easier to identify?
Which I think is amazing and great. Probably one of the, one of the few things I'll say that sounds amazing and great in this episode, but really it's like they're looking for a few, key things. They're going to really be reviewing all the records to ensure like diagnoses are accurate and that everything's properly [00:15:00] documented.
And like ultimately they're going to be looking at around like 200 charts per plan Now. That might seem like nothing, but if you happen to be one of those charts that gets reviewed and there is up billing. Or it appears to be a kickback because you have equity in the company or you're getting a, some sort of, referral payment for doing the service that you're doing.
You are gonna be in very hot water. And, the federal government is estimating that they're going to identify around $17 billion in overpayments. And I have no idea if that is accurate or not because auditing all of these plans every single year is un, it hasn't happened before, so [00:16:00] I have no idea at all, even how to project.
What it could look like. I know in my experience, overpayments get identified fra like pretty, pretty regularly. And that was doing, Medicaid plan audits. So you have to think about, you're talking about the federal government, they're also auditing back to 2018. So if. Oh wow. They're going way back to basically get fully caught up on all of this.
So again, it's one of those things where you really wanna make sure that the companies you're working with are doing things in the right way because the feds have a spotlight on y'all right now. And what's, so you mentioned that prior it was only 60 Medicare Advantage companies and now it's all 550.
How did they identify the initial 60 in the first place? Like why did [00:17:00] they say, okay, U 60 are under the radar? Or is it just a revolving 60? It's usually revolving. It's got it. Think the idea is that the workforce is limited. Yeah. And so usually they would, do an audit. Got it. Every three years, let's say.
Yeah. Where they'll look into it. Now again, like they're always a little behind, so it's like you might get an audit and you're not gonna get your report for eight months, nine months. So you're sitting on pins and needles as to what's happening. I think the. The idea that they have sig, I mean they're significantly staffing up means like the workforce issue is not a problem.
Yeah. They're building in tech to help identify this, which is probably the government's biggest issue right now because. At least in my experience, a lot of those things were done by hand. And so you would have to identify outliers. I wasn't on the payment integrity side, so I don't actually maybe they have some tools that do that.
I have no idea. But on the actual [00:18:00] kind of like monitoring and like oversight piece, like that was all left to like very manual processes. And so it is going to be interesting to just see. For some of these, some of these newer plans that haven't been through this before, right?
Like you, this is telemedicine talk, so it's like a lot of these like value-based care companies Yeah. That are doing RCM and like CCM and, sorry, RPM, I think RCM is a.
Rpm, remote patient monitoring chronic care management, some of those other things that are just, again, like most people or most companies have just been like, oh, it's like a surefire, thing. Yeah. It's gonna be something that's really gonna have a spotlight on it and. I would be curious, just again, what I've talked about in a lot of these episodes is companies don't know how to work in federal and state programs, especially like new startups.
And so [00:19:00] it, I'm, it could be something where, there might be some potential for, inadvertent accidental fraud. Now what are they looking for? That are auditing, what are their main points that they're looking for? Is it, what the listeners here, right?
The doctors that are working for these companies that are billing Medicare maybe on telemedicine platforms, what should they be watching out for? It sounds like there needs to be some change of documentation, right? In terms of, or maybe even practice processes. But what should we be thinking about when going through this process so we don't get caught in the cross hairs?
So I think that the biggest thing is. Physicians don't code their own stuff, right? Most don't, yeah.
Some force you to do it. There, there are some EMRs that will try to do it for you and there's some AI tools now that are like, oh, here's your suggested [00:20:00] code. But yeah. Yeah, so I'd like to say that a lot of it is gonna be coding documentation and determining medical necessity for that service.
Why was something prescribed? Why was something billed for? Yeah. And does the documentation meet medical necessity? And I think the piece that a lot of physicians miss is medical necessity is actually documented through. The Feds de decide that you can look at the different provider manuals, for Medicare Advantage plans, and it actually lists out what criteria has to be met.
Every state has policy letters that really talks about this is what meets medical necessity criteria. And if you are, prescribing things or doing services that are, bill being billed to Medicare, and you're unable to justify. Medical necessity. I think that's a big, gonna be a very big problem because that's, that's what they're, looking for.
[00:21:00] And now is there gonna be new restrictions on the modality of of the telehealth visits? I'm hearing that. Are they gonna require face-to-face face-to-face visits, now allotted. A lot of the platforms are audio only, are maybe, stored forward. But my, my limited research on this 10, 15 minutes maybe was mentioning that, that there may be a face-to-face requirement, which is gonna be, which can be huge, right?
It can be huge. A lot of the face-to-face appointments take a very long time to do. And, coming from a provider side, it's not that efficient, right? A lot of these, a lot of these appointments don't pay the provider that much. And so if you're gonna require a significant face-to-face requirement or even a time requirement you're gonna lose a lot of telemedicine providers 'cause it's just not gonna be financially supportable.
To meet that requirement. That's one big concern of mine. Yeah, I [00:22:00] would be curious. The one really great thing is these audits are public. So once some of these audit findings are established, we'll actually be able to see what different plans were dinged for, what the fines were, and really drill down to maybe the policy does say that you don't need a face-to-face, but the auditors have interpreted it completely differently. Yeah. And they're, you they're getting providers in trouble or they're, determining providers didn't, meet standard of care, medical necessity regardless of there being flexibility around it in the law.
So I think that's gonna be one thing that I'm actually pretty curious to dig into once. Like I said, in a year once we actually have some of these audit, audits completed because it's really hard to say or even make a guess as to are they going to make a policy decision around it?
Or we'll [00:23:00] companies, ultimately make that policy decision, that business decision and go it's less risky for us to just. Require the face-to-face because it's an easier way for us to, get like automatically, approved Yeah. Meet the requirement, less. Yeah.
You're right. It almost guarantees a payment, you just don't want to go through that. Yeah, that's the biggest thing. I don't think any physician doesn't wanna go through this. And the thing, you're not gonna know, you're not even gonna know what's going on. If these things.
You're you may know that the plan is getting audited, but again, you have to understand that everything is downstream. Yeah. Like, when I would do this stuff in California it wasn't that we would go to the health plan, right? And then we would go to the health plan and we would go, okay, we're picking these, for network providers that you have. Yeah. And we're gonna go audit them. And that's how it would work. And so a lot of the companies that you're partnering with, again they have reporting requirements to the states. Or, they have reporting requirements up to the Medicare Advantage plan and the [00:24:00] Medicare Advantage plan needs to report that to the federal government.
Now, what happens if you get dinged, what happens if you are found not in compliance? Who gets hit? Is it the plan? Is it the platform, the provider? Or, if you're working, let's say you're a contractor working for a company. Is it the company that's gonna get hit? Or are you individually gonna get hit?
I think it really depends on the level of severity. Yeah, so I think that if, let's say they, they catch a individual provider, for example, who's contracted with these plans, doing what appears to be like a blatant kickback, I think you can anticipate to probably get into some pretty serious trouble for that.
If it is a small error, an overpayment error due to some sort of like billing issue. Most likely the plan. Yeah, but it, again, it's gonna be like a combination of the two because the plans, again, part of the reason why you have Medicare advantage and why you have any [00:25:00] health plan is honestly to congregate a provider network.
That they serve as the oversight body. Yeah. They are supposed to be auditing and monitoring and doing all of that stuff. That's why most health plans have internal audit teams. Yeah. Like that doesn't exist in the startup world or the value-based care world today for mo based on most of my experience.
Yeah. And it, again you're just gonna get fined unless you're found doing something like really illegal. But again, it, you never know because if they. You might be doing, we've heard stories, Leo of Oh yeah. Providers that were doing stuff in Medicare, they didn't know it was illegal.
Yeah. And then those are the ones that also got dinged. So again, it's just, it's that slippery slope where like you, you don't know. It'll, yeah, it really depends on the level of severity as they determine. And you hear these horror stories, right? They get dinged, they can't practice in other Medicaid plans, Medicare plans.
Medicare, not Medicaid, Medicare plans also, their state licenses may be up for question as well too. [00:26:00] And that's gonna be a huge hit, so it's definitely not inconsequential. It's definitely something that you don't want to be on the end of it, it's also interesting too just thinking about it too, you're talking about upcoding and showing your decision making, so forth and so on, and a lot of these telehealth companies are starting to use ai. Technology to get to the MDM to get to the decision making, and it's gonna be a big question on whether or not that's gonna be a problem, it's not if you're found dinged, I don't think you'd go up to the OT and be like a, I said, I don't think that's gonna be an acceptable answer. Really, with the. Blossoming of ai, especially in telemedicine. It's gonna be interesting to see how this is gonna change people's approach on that.
And if AI is gonna be an a viable option to get to the MDM to get to, the decision making. Honestly, hopefully it does. AI makes everything efficient, but you're right it's not a hundred percent complete and I don't think it's defensible. When you stand [00:27:00] up to the auditor.
Yeah, it's 100% not defensible. I just wanna be like very clear, like I understand that AI for our generation is great. States federal government gov government does not think AI is great. And what I mean by that is you can go on chat GPT, and you could go tell me the rules and regulations and the codes for this, and it could spit out whatever.
And if you don't fact check it, half the time it's wrong. So part of it is whatever tools are being used or baked in. Again, is there an internal process where those things are being reviewed and verified and corrected? Feedback's being provided? I think to me, like that's the only key thing is like, what is that oversight of the tech actually, where is it?
Yeah. . And I think that's the important piece. 'cause you're, you are, you're gonna have, mistakes. And, it's gonna be interesting to see how they [00:28:00] validate it too. And, how is there a way you could validate the AI and like you said, how are you gonna make that objectively audible
yeah. So yeah, that's gonna be an interesting kind of side piece on, on that argument. Yeah. Agree. Agree. I think there, I think, again, I think there's gonna be a lot of things where I. You're, I think we're gonna learn a lot. I think we're gonna learn a lot about what not to do. And I think that the one thing that I can say is, not to get political, but this administration really is, looking for fraud.
And so if there is any sort that looks out of the norm, like it, it auditors dig. What they do, they dig, they, they find the one thing that's wrong and then they ask 10 more questions. And off of those 10 questions, they're gonna ask 10 more. And they're gonna keep getting information and really just digging.
And I think that is like the biggest thing here is like [00:29:00] really just wanna make sure that everything is, tight and aligned and that, to your point, aI's great, but like it's not the end all be all for how coding is being done. All those things I think are gonna play a really big part.
Yeah. No, definitely. It's gonna be interesting to see how that plays along. Fun stuff. Yeah. Yeah. And I'll, again, I'll I'm following this stuff very closely because I'm a nerd. And she's most she really is. I do at night, I'm like, oh, love you. Like this stuff. I it's in my, I think it's in my blood.
I think part of the stuff, and we're gonna talk about this on another episode, is you grew up in the medical world where that's what you know and that's what you're comfortable with. I grew up in this since I was, 23. So to me it's, I speak this language, so I find it so interesting.
Yeah, I just, I find it so interesting that other people don't understand, like [00:30:00] this guy. Yeah. Awesome. Thank, thanks everyone for joining us for this episode. Yeah, awesome. If you guys have any questions, wanna pick Phoebe's brain and talk more about this fascinating topic definitely drop our line, phoebe@telemedicinetalks.com.
Honestly, if you have stories about this, if you run into this in the future and wanna come on the show and talk about your experiences. Please drop us a line info@telemedicinedo.com and really just, Hey, we love having people on, love having talks. If you have a topic you wanna hear about, just drop us a line again, info@telemedicinetalks.com.
Until next time yeah, we'll see you then.