1. Timothy Smith Viant, Inc. 535 E. Diehl Road Naperville, IL 60563

2. Innovation in Medicaid Medical Benefit Management Trends in Post-Pay Audit and Recovery © Copyright 2008 Viant, Inc. All Rights Reserved.

3. Medicaid Cost Containment © Copyright 2008 Viant, Inc. All Rights Reserved. Fraud Third Party Liability Credit Balance Recovery M.I.P Estate Recoveries MFADS SURS

4. The CMS RAC demonstration Reasons for the program CMS goals Elements of the demonstration RAC national expansion © Copyright 2008 Viant, Inc. All Rights Reserved.

5. RAC Results © Copyright 2008 Viant, Inc. All Rights Reserved. $1 billion in savings identified $750 million returned to Medicare Trust Fund Roughly equal: edits not in place, human error, medical necessity Low appeal rates, most providers minimally impacted Lessons learned, changes made for expansion

6. Table 3a: Error Rates and Projected Improper Payments by Contractor Type © Copyright 2008 Viant, Inc. All Rights Reserved. Source: CMS Improper Medicare FFS Payments Report, November 2007

7. Table 3b: National Error Rates by Year © Copyright 2008 Viant, Inc. All Rights Reserved. Source: CMS Improper Medicare FFS Payments Report, November 2007

8. Table 3c: Summary of Error Rates by Category © Copyright 2008 Viant, Inc. All Rights Reserved. Source: CMS Improper Medicare FFS Payments Report, November 2007

9. Survey Results Few states performing clinical audit and recovery Overwhelmed operationally or lack resources Focused on integrity/fraud Contingency attractive, though some concerns High interest in proof of concept programs © Copyright 2008 Viant, Inc. All Rights Reserved.

10. Implications for Medicaid 18.5% Medicaid payment error rate - more than 4x CMS CMS may consider a future RAC-like Medicaid program Chance to get ahead of the curve Opportunity to help develop the program in your state Proven results and processes © Copyright 2008 Viant, Inc. All Rights Reserved.

11. Opportunities Non-random, proprietary selection, auditing and recovery of improper payments Reliant on detailed review of the medical record Focus on correct coding and medical necessity High-cost specialty areas have minimal oversight © Copyright 2008 Viant, Inc. All Rights Reserved.

12. Part A Diagnosis Related Groups Medical Necessity Audits SNF Other © Copyright 2008 Viant, Inc. All Rights Reserved.

13. Part B High-cost injectables Dialysis Implants Physicians © Copyright 2008 Viant, Inc. All Rights Reserved.

14. Provider Relations Zero impact on care or coverage--all post-payment No impact on provider reimbursement rates Underpayments help balance financial impact Blueprint for future increased claim payment accuracy Sentinel effect © Copyright 2008 Viant, Inc. All Rights Reserved.

15. Challenges Impetus unlikely to come from within your organization Many vendors don’t have the clinical staff or expertise Revenue sharing models need to be worked out CMS may provide tools from the RAC program © Copyright 2008 Viant, Inc. All Rights Reserved.

16. Realistic Expectations Recoveries begin to be realized 6-8 months from audit onset Recoveries of 1% to 3% of paid claims with full implementation Significantly reduces future error rates Recovered dollars can help fund increased access, coverage and other programs © Copyright 2008 Viant, Inc. All Rights Reserved.