Medicaid programs are under intense budget pressure. State health care costs nearly doubled from 2005 to 2015, reaching $929 billion. By 2025, more than 38 percent of state dollars will go to health care.
Against this backdrop of rising health expenditures, the Centers for Medicare & Medicaid Services (CMS) rolled out new requirements to ensure states examine all the financial assets of seniors seeking Medicaid coverage for long-term care (LTC).
States are required to have an Asset Verification System to determine whether Medicaid LTC applicants have assets that can be used to defray the costs of skilled nursing facilities, prescription drugs, community-based services, and other expenses.
Most states perform asset verification on liquid assets, searching for bank accounts, stocks and bonds. They may not, however, perform an in-depth analysis of real property assets, which need to be included under state and federal eligibility rules.
Existing asset verification systems for real property typically rely on very basic data matching services and algorithms, with no corroborative secondary process. Because of the legal complexities associated with real estate titles and holdings, a simple data matching service cannot adequately inform eligibility workers of disqualifying transactions or title changes which can significantly impact eligibility.
Many critical pieces of information lie in the actual content of real estate documents. Data matching services by themselves are generally not sophisticated enough to resolve conflicting information about asset holdings. The result is a data set that inadvertently omits certain properties or transactions, while including others that are not connected to the applicant.
Real estate is typically one of the most valuable assets held by Medicaid LTC applicants. This means Medicaid programs are losing out on millions of dollars in potential cost savings.
UMass Medical School has developed AVS Enhance™ – to help states strengthen their real property asset verification capabilities.
Medicaid programs already using asset verification systems to verify liquid assets and/or conduct basic real estate searches can add AVS Enhance™ to complement those activities.
AVS Enhance™ includes meticulous data gathering processes, accompanied by a detailed secondary review plus professional title interpretation and documentation. Our team of lawyers, paralegals, title examiners, and brokers examine and interpret results, manipulating the data set in ways that standard data matching processes cannot. They also provide a comprehensive report with general guidance and eligibility focus area indicators.
By uncovering real estate assets owned by Medicaid LTC applicants, AVS Enhance™ has saved one state Medicaid program more than $125 million, a figure based on the average cost of a two-year nursing home stay in that state.
Below are some key metrics that demonstrate the value of the service:
- 27% of applicants who had property did not disclose it in their application.
- UMass Medical School uncovered real estate assets that the state’s basic data search system failed to discover in 32% of the applications.
- In one grouping of 25,000 cases, AVS Enhance™ did what a data match service could not – identified and documented transactions that require further eligibility investigation:
- Trusts: 17%
- Mortgages: 12%
- Dilutions of interest/Tenancy changes: 6%