Medicaid Is Now Auditing Before It Pays

Medicaid and Medicare used to pay first and chase fraud later. That model is changing fast, and the providers who haven't adapted are about to feel it.

In this clip from our episode “AI and The Future Of Behavioral Health”, host John Driscoll and Alon Joffe, Co-Founder and CEO of Eleos Health, break down why the shift to audit-first payment in Medicaid and Medicare is an existential threat for behavioral health organizations already operating on razor-thin margins.

Listen to the full episode here

🎙️⚕️ABOUT ALON JOFFE
Alon Joffe is the Co-Founder and CEO of Eleos Health, a behavioral health technology company that uses AI to automate clinical documentation and generate insights from provider-client conversations. Since its founding in 2020, Eleos has raised $28 million and expanded to more than 25 community mental health centers across 15 states.

Inspired by close friends who experienced PTSD following his military service in an elite Israeli Air Force unit, Alon focuses on using technology to improve behavioral healthcare delivery. Before founding Eleos, he launched two companies and worked on the investment team at a Boston-based venture capital firm. He holds a B.A. and an LL.B., summa cum laude, from Reichman University and was named to Forbes 30 Under 30.

🎙️⚕️ABOUT CARETALK
CareTalk is a weekly podcast that provides an incisive, no B.S. view of the US healthcare industry. Join co-hosts John Driscoll (President U.S. Healthcare and EVP, Walgreens Boots Alliance) and David Williams (President, Health Business Group) as they debate the latest in US healthcare news, business and policy. 

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Transcript

John: 0:06

Let's get into a little bit of the, the, the vulnerable population stuff. A lot of those enterprises that you're selling to are serving Medicare, the, the federal program in the United States for the elderly, and Medicaid, the poor. What's, as, uh, as we're going through, you know, restructuring, you know, health plans coming in and out of the Medicare managed care program because of V28 and covering different geographies with different kind of benefits, and in Medicaid a lot of people, uh, you know, falling off of coverage and falling off of the exchange. What's going on in your practices? What are you seeing happening to vulnerable populations right now?

Alon: 0:44

John, I think right now is probably the most, um I would say turbulent times for these population. And let me just give you like three quick headlines. One is we're seeing, you know, Vice President announce, uh,$1.3 billion suspension of Medicaid payments in California. We're seeing fees for Medicare enrollments for, uh, new home healthcare and hospice providers across the country, right? There's a lot of focus, uh, from Dr. Oz, from CMS on fraud, waste, and abuse in Medicaid and Medicare right now. And I'm, I'm not getting in, in this show in whether it's right or wrong, that's besides the point. But we're just seeing a lot of focus on that area. We're now seeing AI getting deployed to basically understand moving from what they call, "Hey, we used to pay and then we chase you," to now we're auditing first and then paying later. That's a huge mind shift in how money's flowing through Medicaid and Medicare, right? And so I think for these populations- Well, and it's a massive

John: 1:53

potential cash flow hit too.

Alon: 1:56

Exactly. And remember, these are organizations that already have very thin margins, right? Um, so we're seeing a huge shift, and for these organizations, it's about change. If they don't change now… That's what I'm hearing from CEOs. Their, their mindset is, "If I don't change now, if I don't rethink my workflows and how I operate, it just won't be sustainable."