Medicaid Issues Statement on Third-Party Liability 

The Center for Medicaid Services recently issued a notable statement requesting that parties conform with the duties and obligation of third-parties found in existing law. The Center recently reviewed each state’s Medicaid plan to make sure that states complied with recent statute changes. The Center for Medicaid decided that many states are yet to revise their guidelines to meet regulations found in the Bipartisan Budget Act as well as the Medicaid Services Investment and Accountability Act. Regulations found in the Bipartisan Act include statements that impact regulations connected to the treatment of some kinds of care. 


The Background of These Changes


Medicaid often disperses funds only as a “last resort”, which means that Medicaid issues payment for treatment and services only when it is assessed that no other payment sources exist. The Social Security Act’s Section 1902 requires all 50 states to take measures deemed reasonable when deciding on third-party payer liability.  The Act also specifies what the term “third-party payer” means. The definition of “third-party payer” encompasses various entities including health insurers, qualified health plans, and any other entity that are classified as legally responsible for certain medical treatment. The Bipartisan Act revised section 1902 to require all 50 states to utilize standard cost avoidance methods rather than paying the total amount allowed under the appropriate payment schedule then seeking third-party reimbursement. 


If the state’s Medicaid Agency has assessed that another entity bears the duty of paying certain claims including prenatal ones, the Agency must reject the claim. The claim must then be returned to the medical care provider. If the medical provider then issues a bill to the liable entity and either a balance still exists or the claim’s payment is denied, the medical provider can file a request to have the balance paid up to Medicaid’s maximum payment amount as is routine for the care as conforms to the state’s plan. 


The Bipartisan Act requires states to issue payments without being influenced by third-party liability for certain claims including pediatric protectives. An exception, however, exists if states perform an assessment connected to the most cost-effective techniques and care access that justifies cutting costs for 90 days. Several years ago, the Center for Medicaid released additional clarification about these changes, which permit payment for a maximum of 100 days rather than 90 days following the submission of a claim. 


States Must Follow Third-Party Liability Change


In light of these changes, states must make sure to revise their Medicaid state plan page as well as submit changes to the Center for Medicaid that depict the following: 


  • Requiring all 50 states to conform to standard cost avoidance methods to prenatal service claims  
  • Requiring all 50 states to issue payments without considering potential third party liability for pediatric services
  • Addressing flexibility for issuing payments considering third party liability for a maximum of 100 days when claims are connected to the enforcement of child support beneficiaries 


Each of the 50 states should also make sure to review as well perform the required changes to their corresponding guidelines. 


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Elder law includes many important areas of law like Medicaid. If you or a loved one needs the help of an experienced Medicaid attorney, you should not hesitate to contact Ettinger Law Firm today to schedule a free case evaluation.

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