As of October 2024, nearly 80 million Americans were enrolled in Medicaid. Medicaid offers vital services for people of all ages, particularly low-income adults, children, pregnant women, elderly adults, and people with disabilities. While many Americans need and utilize this system, it has some complications with the billing process. For example, the improper payment rate (overpayments, underpayments, or payments made without enough information to determine legitimacy) was 5.09% for 2024.
Medicaid billing can be complex, often leading to claim denials, payment delays, and administrative inefficiencies. Healthcare providers and human services organizations work through strict compliance requirements, overcoming administrative hurdles and remaining accurate in their billing processes. Case management systems like PlanStreet play a winning role in succeeding against these challenges. In this article, we'll cover the top Medicaid billing issues and how technology solves them.
1. Patient Eligibility Verification
Patient eligibility verification for Medicaid is how healthcare providers confirm Medicaid coverage status. This process has to be completed before providing services, or else it can get sticky legally. Once a patient's eligibility is confirmed, providers can submit clean claims--reducing denials and improving their revenue cycle management.
Challenge: Outdated, Complex Documentation
One of the biggest reasons behind Medicaid claim denials is outdated documentation. When relying on physical paperwork, the information on file is likely not the most up-to-date. Busy doctors or nurses may accidentally forget to send a most recent set of case notes, or a case worker may leave off pay stubs that show their client is low-income.
When this happens, a person eligible for Medicaid may be rejected. Then, their case worker has to re-file, making it difficult for the individual to receive the care that they need. On top of all of this, manual verification processes are time-consuming, leading to more delays in patient care.
Solution: Real-Time Eligibility Verification Tools
Case management software includes real-time Medicaid eligibility verification tools. The provider knows that the patient can be covered before they provide services. Automated, real-time eligibility checks reduce claim denials and make the admin's workday much easier.
2. Accurate Documentation Practices
Accurate documentation practices are required to provide proper care, prevent claim denials, and support thorough patient care. Documentation gives doctors a bird's eye view of every case so that they can make the best decisions for their patients. Some best practices to follow Medicaid document requirements include:
- Detailed documentation: This can vary, but it usually includes the service description, why the care was medically necessary, and progress notes about the patient's condition.
- Timeliness: Save information as soon as possible, keeping the client's record accurate.
- Match documentation and billing: Keep the codes the same for both, avoiding discrepancies that lead to claim denials.
- Legal compliance: Maintain signed and dated records that everyone can read and fully explain the extent of services provided. Proper procedure when changing medical records makes sure that nothing important is incorrectly adjusted.
Challenge: Incomplete or Inaccurate Documentation
While the practices above are beneficial, even the best doctors can struggle with inaccurate or incomplete documentation. On average, physicians spend .8 hours on inbox tasks per eight hours of time that's spent with patients. Combine that with the pressure from hospital administration to see more and more patients, it's easy for documentation to slip through the cracks.
However, this issue must be addressed. Incomplete and wrong documentation causes claim rejections or, even worse, Medicaid compliance risks. Hand-written systems make meeting Medicaid documentation requirements even harder, increasing the likelihood of missing critical details.
Solution: Digital Record-Keeping
PlanStreet's case management system enables digital record-keeping, ensuring accurate and structured documentation. Built-in templates, automated data capture, and AI-powered analytics help maintain compliance and reduce errors.
Keep orderly electronic health records (EHR) when all of your data is in one place. Case management software reduces data silos. Every provider on the care team updates and adds information to their client's file. They all can see the most accurate data that's correct at that exact moment.
3. Timely Claims Submission
Medicaid claims submission is how healthcare providers request reimbursement for services given to Medicaid beneficiaries. The providers must submit detailed information about the services provided, the patient, and the provider to the Medicaid claims processing.
There are two major claim types used by Medicaid:
- Professional Claims (CMS-1500 Form): Billing services provided by individual healthcare professionals.
- Institutional Claims (UB-04 Form): Billing services provided by facilities.
Challenge: Manual Workflows
When working with Medicare, you can use electronic claims or paper claim forms. While electronic claims have faster turnaround times for Medicaid reimbursement (7-14 days rather than 90-120 days with paper processes), manual workflows make the process much slower. If there is no standard assignment for who submits which claims through Medicaid billing software, then certain forms may slip through the cracks. Delays in claims submission due to manual workflows can result in payment backlogs and financial instability for service providers.
Solution: Automated Claims Submission
A digital case management platform automates claims submission by integrating with Medicaid billing systems. PlanStreet's solution:
- Helps track submission deadlines
- Provides automated alerts
- Reduces administrative workload by simplifying the process from beginning to end
When the whole team can see who is in charge of which tasks, everything can be completed on time and properly.
4. Proper Authorization Procedures
For the Medicaid fee-for-service (FFS) program or managed care organization (MCO), healthcare providers must submit a prior authorization request with clinical and administrative information. The corresponding provider reviews the request, looking at established criteria to gauge medical necessity and clinical standards. They then make a decision to approve, modify, defer, or deny the request.
Once the decision is completed, then the healthcare provider is notified. While this process has been slow in the past, as of January 1, 2026, decisions must be made within 7 calendar days for standard requests and 72 hours for expedited requests.
Challenge: Missing Medicaid Prior Authorization
Healthcare providers can run into trouble if they provide specific services for Medicaid without acquiring a prior authorization approval. Some of the consequences of this issue include:
- Claim denial: If prior authorization is missing, Medicaid programs can deny the claim.
- Financial burden: The provider may need to resubmit the claim with proper documentation, which makes more work for everyone.
- Potential fraud allegations: Submitting a claim without prior approval is a violation of Medicaid regulations, and could result in penalties like fines of up to $50k or expulsion from federal healthcare programs.
Solution: Tracking Approvals With Case Management Software
Medicaid case management software simplifies authorization tracking by integrating with Medicaid portals, ensuring that approvals are obtained and documented before services are delivered. Doctors, nurses, and administrators have enough on their plate--with software, automated reminders prevent oversight and ensure compliance.
5. Efficient Payment Processing
Medicaid payment processing ensures that healthcare providers receive payment for the services rendered. However, this process can take months, and each state determines its own reimbursement rate and coverage of services. For example, it's required in the state of California for MCPs to clean claims for those in individual or group practices or who practice in shared health facilities within 30 days of the date of receipt. Other stipulations mandate within 90 days.
Challenge: Insufficient Payment Processes
Healthcare operations like community clinics or local providers work on tight budgets, and administrative teams can struggle with tracking payments, reconciling invoices, and addressing payment disputes. With paper systems or outdated software, Medicaid financial management can become a major challenge, particularly for smaller providers.
Solution: Real-Time Payment Tracking
Technology-driven billing solutions integrate directly with Medicaid payment systems, allowing providers to track payments in real-time. Medicaid billing automation streamlines and optimizes the process of submitting, managing, and processing Medicaid claims. PlanStreet's financial tracking tools help in:
- Monitoring outstanding claims.
- Automating invoice generation.
- Improving overall financial management.
- Detecting errors or missing information, reducing claim rejections.
Medicaid billing does not have to be a cumbersome process. With the right technology, service providers can improve accuracy, ensure compliance, and accelerate reimbursements.
Jumpstart Your Medicaid Billing Solutions With PlanStreet
If you're tired of pulling your hair out over rejected Medicaid claims, we've got your back. PlanStreet's case management system streamlines Medicaid billing by automating eligibility verification, documentation, claims submission, authorizations, and payment processing.
Our robust Medicaid case management software offers:
- An effective patient verification system
- Easy claim scrubbing
- Simplified intake
- Customizable templates
- Bulk claims
- Easy exporting of CPT, HCPCS, and ICD-10 codes into forms
Investing in the right technology eases administrative burdens and allows providers to focus on delivering the best care possible for their patients. If you're looking for a more efficient Medicaid billing process, book a live demo today, and let us show you the power of PlanStreet.