Coordination of Benefits
and Third Party Liability
(COB/TPL)
In Medicaid
2020
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3
Acknowledgment
The COB/TPL Handbook was completed by the COB/TPL Team in the Division of Health Homes,
PACE, and COB/TPL (DHPC), Disabled and Elderly Health Programs Group (DEHPG), Center for
Medicaid and CHIP Services, with technical support and assistance provided by Manatt, Phelps,
& Phillips, LLP, under contract with Mathematica Policy Research, Inc. Members of the
COB/TPL Team were Nancy Dieter, Technical Director; Barry Levin (2014), Cathy Sturgill, and
Ginger Boscas (2015 - ), Health Insurance Specialists. The COB/TPL Handbook was developed at
the direction of Nancy Klimon, Former Director, and Carrie Smith, Director, DHPC (2015 - 2019).
The COB/TPL Handbook was revised in 2020 at the direction of former Director, Carrie Smith,
and Mary Pat Farkas, Director, by the COB/TPL team in the DHPC, DEHPG, CMCS. Members of
the COB/TPL team Cathy Sturgill, Technical Director; Ginger Boscas, Sara Rhoades (2016 -
2020), Trista Chester (2017 - ), Andrea Ormiston (2020 - ), Health Insurance Specialists.
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ABOUT THIS HANDBOOK
1. Purpose: The purpose of the Handbook is to provide an overview of COB/TPL policy on a
variety of individual subjects.
2. Intended Audience: The Handbook is intended for CMS Central Office (CO) and Regional
Office (RO) staff working on COB/TPL issues, state Medicaid agency staff, and all other
parties interested in Medicaid COB/TPL policies.
3. Content: The Handbook contains policy guidance on a variety of COB/TPL topics that is
current at the time of publication.
An Acronyms and Abbreviations list is included immediately after this summary.
TIP: Acronyms will appear in the Handbook as blue, underlined text. Position the cursor over
the acronym and the full term will be displayed.
4. Updates: Changes to the Handbook may only be made by CMS CO COB/TPL Team staff.
Requests for changes to current information, or addition of information to address new
topics should be forwarded to the Centers for Medicare & Medicaid Services, 7500 Security
Blvd., Mail Stop S2-16-25, Baltimore, MD 21244, Attn: Technical Director (TD) for
COB/TPL/DHPC/DEHPG/CMCS.
5. Organization of the Handbook:
a. Chapters are major subject groupings and are designated with Roman numerals.
b. Sections discuss major topics within chapters and are designated with capital
letters.
c. Subsections discuss single topics within sections and are designated with numbers.
d. Divisions discuss single topics within subsections and are designated with lower-
case letters.
e. The Table of Contents lists chapters, sections, subsections, and divisions, with page
numbers.
f. The Index lists all topics in alphabetical order, with location identified by chapter,
section, subsection, and division references.
g. A Reference section located at the back of the Handbook includes lists of statutes
and regulations.
6
h. An Appendix located at the back of the Handbook includes COB/TPL training
presentations.
TIP: Topics in the Handbook can be accessed quickly from the Table of Contents.
Position the cursor over the topic and press Ctrl + Click to move directly to the topic.
6. Questions about format or content of the Handbook should be directed to the TD for
COB/TPL.
7
ACRONYMS AND ABBREVIATIONS
Acronym
Abbreviation
(the) Act
Social Security Act
AI/AN
American Indian/Alaska Native
AOR
Assignment of Rights
BBA
Bipartisan Budget Act
CAHPG
Children and Adults Health Programs Group, CMCS/CMS
CFR
Code of Federal Regulations
CHIP
Children’s Health Insurance Program
CMCS
Center for Medicaid & CHIP Services
CMS
Centers for Medicare & Medicaid Services
CO
(CMS) Central Office
COB
Coordination of Benefits
COB/TPL
Coordination of Benefits/Third Party Liability
DEE
Division of Eligibility and Enrollment (formerly DEEO, Division of Eligibility,
Enrollment, and Outreach) (CAHPG)
DEERS
Defense Eligibility Enrollment Reporting System
DEHPG
Defense Eligibility Enrollment Reporting System
DHPC
Division of Health Homes, PACE, and COB/TPL (DEHPG)
DMEP
Division of Medicaid Eligibility Programs (formerly DEE, CAHPG)
DHHS
Department of Health and Human Services
DMEPOS
Durable Medical Equipment, Prosthetics, Orthotics, and Supplies
DOD
Department of Defense
DRA of 2005
Deficit Reduction Act of 2005
DSG
Division of State Systems Group
EPSDT
Early and Periodic Screening, Diagnosis and Treatment
FBDE
(Medicare) Full Benefit Dual Eligible
FEMA
Federal Emergency Management Agency
FMAP
Federal Medical Assistance Percentage
FFP
Federal Financial Participation
FPL
Federal Poverty Level
ICF/IID
Intermediate Care Facility/Individuals with Intellectual Disabilities
HIS
Indian Health Service
MAGI
Modified Adjusted Gross Income
MCO
Managed Care Organization
MMIS
Medicaid Management Information System
MSP
Medicare Savings Program
OAA
Older Americans Act
OBRA 93
Omnibus Budget Reconciliation Act of 1993
OCSE
Office of Child Support Enforcement
PACE
Program of All Inclusive Care for the Elderly
PBM
Pharmacy Benefit Manager
QDWI
(Medicare) Qualified Disabled and Working Individual
8
Acronym
Abbreviation
QI
(Medicare) Qualifying Individual
QMB
Qualified Medicare Beneficiary
QMB Only
(See QMB)
RA
Remittance Advice
RO
(CMS) Regional Office
SLMB
Specified Low-Income Medicare Beneficiary
SLMB Only
(See SLMB)
SMA
State Medicaid Agency
SMM
State Medicaid Manual
SSA
Social Security Administration
SSI
Supplemental Security Income
(the) State
Plan
Medicaid state plan
TAG
Technical Advisory Group
TD
Technical Director
TEFRA
Tax Equity and Fiscal Responsibility Act of 1982
TPL
Third Party Liability
U.S.C.
United States Code
VA
Department of Veterans Affairs
9
Table of Contents
ABOUT THIS HANDBOOK.......................................................................................................... 5
ACRONYMS AND ABBREVIATIONS ........................................................................................... 7
COB/TPL Overview ................................................................................................................. 13
Chapter I: COB/TPL Core Concepts…………..………………………………….………………………….…………16
A. Federal and State Partnership in COB/TPL Activities………………………………………………………16
B. Federal Funding of COB/TPL Activities ................................................................................ 17
C. Assignment of Rights (AOR) ................................................................................................ 18
1. Relationship to Medicaid COB/TPL Activities ...................................................................... 18
2. AOR: General Requirements Related to Medicaid Eligibility .............................................. 18
D. Payer of Last Resort .......................................................................................................... 20
1. General Requirements ...................................................................................................... 20
2. Exceptions ......................................................................................................................... 20
Chapter II: Coordination of Benefits (COB)…………………………………………………………………………23
A. State Plan Requirements .................................................................................................. 23
1. Required Elements in State Plan ....................................................................................... 23
2. State Laws Related to COB/TPL .......................................................................................... 24
B. Identifying Liable Third Parties ......................................................................................... 25
1. Defining Third Party Payers ................................................................................................ 25
2. Obtaining Health Insurance Information during Eligibility Determinations ...................... 26
3. Exchanging Data with Other State Databases ................................................................... 27
4. Diagnosis and Trauma Code Edits ...................................................................................... 27
5. Incorporating TPL into Information Systems ..................................................................... 28
6. TPL Action Plans ................................................................................................................. 29
7. Waiver of Requirements .................................................................................................... 30
C. Payment of Claims ............................................................................................................. 31
1. Paying Claims with Established TPL .................................................................................. 31
2. Paying Claims with No Established TPL .............................................................................. 33
3. Suspension or Termination of Recovery Efforts ................................................................ 34
4. Waiver of Requirements .................................................................................................... 34
5. Never-covered services ...................................................................................................... 35
D. Medical Child Support Payments ...................................................................................... 37
1. Relationship to Medicaid COB/TPL Activities .................................................................... 37
10
2. General Information ........................................................................................................... 37
3. Court-Ordered Health Insurance Coverage for Medical Child Support ............................. 38
4. Court-Ordered Cash Payments for Medical Child Support ................................................ 38
5. Distribution of Collections…………………………………………………………………………………………..…39
E. Dually Eligible Beneficiaries ............................................................................................... 40
1. Introduction: Medicare and Medicaid Coverage for Dually Eligible Beneficiaries ............ 40
2. Medicare Coverage ............................................................................................................ 40
3. Types of Dually Eligible Beneficiaries ................................................................................. 41
4. Medicaid Coverage for Medicare Costs ............................................................................. 43
5. Medicaid Coverage for Medicare Advantage Plans (Medicare Part C) Enrollees .............. 44
6. Medicaid Payment Methodologies for Medicare Cost-Sharing......................................... 46
7. Medicare Bad Debt Provider Enrollment .......................................................................... 51
F. Managed Care .................................................................................................................... 52
1. General Requirements ....................................................................................................... 52
2. COB/TPL Activities by MCOs .............................................................................................. 53
3. Other Managed Care Issues ............................................................................................... 54
G. Data and Systems .............................................................................................................. 56
1. State Systems ..................................................................................................................... 56
2. State Medicaid Eligibility Determination Systems ............................................................. 56
3. State MMIS ......................................................................................................................... 56
Chapter III: Liens and Recovery TPL……………………………………………………………………………………58
A. Liens .................................................................................................................................. 58
1. Description of Liens ........................................................................................................... 58
2. When Liens Are Permitted ................................................................................................ 58
3. Restrictions on Placing Liens ............................................................................................. 59
4. Termination of Liens.......................................................................................................... 59
B. Estates ............................................................................................................................... 61
1. General Overview of Estate Recovery ............................................................................... 61
2. What Services Must or May be Included in an Estate Recovery Claim ............................ 62
3. When Recovery is Permitted ............................................................................................. 63
4. What Assets May Be Recovered ........................................................................................ 64
5. What Assets May NOT Be Recovered ............................................................................... 65
C. Casualty/Tort Recovery ..................................................................................................... 67
11
1. General Overview of Casualty/Tort Recovery ................................................................... 67
2. Ahlborn Limitations on Settlement Funds Subject to Recovery ....................................... 67
3. SMAs’ Ability to Reduce Total Recovery ........................................................................... 68
4. Tort Recovery in Global Settlements ................................................................................ 69
5. Settlement of Claims for Medicare/Medicaid Dually Eligible Beneficiaries ..................... 69
Chapter IV: Other Topics……………………………………………………………………………………………………71
A. Adoption & Surrogacy ....................................................................................................... 71
1. Adoption ............................................................................................................................ 71
2. Surrogacy ........................................................................................................................... 71
B. Indemnity Plans ................................................................................................................. 72
C. American Indians/Alaskan Natives ..................................................................................... 73
1. IHS is a Secondary Payer to Medicaid ............................................................................... 73
2. Estate Recovery ................................................................................................................. 73
3. Federal Share for Reimbursement of COB/TPL Collections .............................................. 73
D. Department of Veterans Affairs (VA) ................................................................................. 74
1. COB: General Rule ............................................................................................................. 74
2. Exception to COB: Payment for Nursing Home Care ........................................................ 74
3. Exception to COB: Payment for Emergency Treatment at Non-VA Facilities ................... 74
E. Department of Defense (DOD)/TRICARE ............................................................................ 75
1. TRICARE for Life ................................................................................................................. 75
2. Timely Filing ....................................................................................................................... 76
F. CMS 64 Reporting ............................................................................................................... 77
1. 9A – Third Party Liability (TPL) Collections ...................................................................... 77
2. 9B – Probate Collections ................................................................................................. 77
G. Health Savings Accounts (HSA) .......................................................................................... 77
H. Contingency Fee Contracts ............................................................................................... 77
1. SMM 2975.4A .................................................................................................................. 77
2. SMM 2975.5 .................................................................................................................... 77
3. 45 CFR 92.36(a) ............................................................................................................... 77
4. SMM 2975.1, section 1903(a)(7) of the Social Security Act, 42 CFR 433.15(b)(7).......... 78
5. 45 CFR 92.36(a) ............................................................................................................... 78
REFERENCE ............................................................................................................................. 79
List of Statutory Provisions ..................................................................................................... 79
13
COB/TPL Overview
Coordination of Benefits:
Medicaid and Other Coverage: A Medicaid beneficiary may have a third party resource (health
insurance, or another person or entity) that is liable to pay for the beneficiary’s health care.
Who are “third parties”?
Health Insurers (includes private or employer-based coverage, Medicare and TRICARE)
Other government programs
Other liable people or entities
Why identify third parties?
To ensure that Medicaid does not pay more than required, and to help recover Medicaid
payments, when a third party is responsible to pay for all or some of the health care
received by the Medicaid beneficiary.
Third parties should pay to the limit of their legal liability. Third party payment reduces
or eliminates Medicaid payment.
Coordination of Benefits (COB): Primary and Last Payers
When a person has Medicaid and there is another liable third party:
Health insurance, including Medicare and TRICARE, generally pays first, to the limit of
coverage liability.
Other third parties generally pay after settlement of claims
Medicaid is last payer for services covered under Medicaid, except in those limited
circumstances where there is a federal statute making Medicaid primary to a specific federal
program. The statute must expressly state that the other federal program:
Pays only for claims not covered by Medicaid; or,
Is authorized, but not required, to pay for health care items or services.
Types of Third Party Payments
Third party payments include health insurance benefits, settlements or court awards for
casualty/tort (accident) claims, product liability claims (global settlements), medical
malpractice, worker’s compensation claims, etc.
14
Special types of third party payments include liens (TEFRA and other), and a claim against the
estate of a deceased beneficiary.
COB: Medicaid and Medicare Coverage
Beneficiaries who have both Medicare and Medicaid are “dually eligible.”
There are several types of dual eligibility: Full Benefit Dual Eligible beneficiaries (FBDE),
Qualified Medicare
Beneficiaries (QMB), Specified Low-Income Medicare Beneficiaries (SLMB), Qualifying
Individuals (QI), Qualified Disabled Working Individuals (QDWI), and QMB Plus & SLMB Plus
(dually eligible beneficiaries who are also eligible in another Medicaid coverage group).
Medicaid coverage of Medicare cost sharing (premiums, deductibles, coinsurance, and
copayments) varies by type of dual eligibility.
When Do COB and Third Party Liability (TPL) Activities Take Place?
Identification of third parties: when Medicaid eligibility is granted or shortly thereafter.
“Cost avoidance” (requires providers to bill health insurance before billing Medicaid):
before Medicaid pays a claim.
COB (requiring cost avoidance before billing Medicaid for any remaining balance after
health insurance payment): when Medicaid pays a claim.
“Pay and Chase” (the third party resource is not known when the claim is submitted to
Medicaid, or the claim is for preventive pediatric care, including Early and Periodic
Screening, Diagnostic and Treatment (EPSDT), or for a child with IV-D enforcement in
place): when Medicaid pays a claim or becomes aware of the resource.
Creation of Casualty/Torts, Liens, and Estate Recovery claims on behalf of the Medicaid
program: after Medicaid pays a claim and determines, or is advised, that the beneficiary
may have a casualty/tort claim that includes the medical items and services that
Medicaid paid or the beneficiary has died.
References
Statute: Social Security Act (the Act)
General COB/TPL: Section 1902(a)(25)
Assignment of Rights: Section 1912
15
Estates and Liens: Section 1917
Regulations: Code of Federal Regulations (CFR)
42 CFR 433.36 Liens and Recoveries
42 CFR 433 Subpart D Third Party Liability
Medicaid State Plan (State Plan):
Section 4.17 and Attachment 4.17-A, Estates and Liens (for additional information
please refer to pages 53 and 53a – h of the state plan)
Section 4.22, TPL (for additional information please refer to pages 69 and 70 of the state
plan)
Supplement 1 to Attachment 4.19-B, Medicare Cost-Sharing Payment Methodologies
(for additional information on a state’s Medicaid buy-in, please refer to page 29 and 29a
– d of the state plan)
COB/TPL Team in CMS Central Office – 2020
Cathy Sturgill, Technical Director: 410-786-3345; [email protected]
Ginger Boscas, Health Insurance Specialist: 410-786-3098; [email protected]
Trista Chester, Health Insurance Specialist: 410-786-0499; [email protected]
Andrea Ormiston, Health Insurance Specialist: 410-786-1206;
Andrea.O[email protected]
16
Chapter I: COB/TPL Core Concepts
A. Federal and State Partnership in COB/TPL Activities
Medicaid’s COB/TPL activities—like the rest of the Medicaid program—are administered through a
federal–state partnership. Both the federal and state governments have the responsibility to
ensure that Medicaid is appropriately identifying potentially liable third parties and coordinating
benefits to reduce Medicaid program costs.
The federal government takes the lead with respect to the following COB/TPL activities:
Interpreting federal statutes governing Medicaid
Developing federal regulations and other guidance regarding requirements governing
COB/TPL
Ensuring that state plans include the required program descriptions and assurances
Providing technical assistance to states in administering COB/TPL programs
Auditing state records to ensure compliance with COB/TPL rules
The states generally perform the following functions:
Enacting state laws and regulations, and developing other guidance needed to carry out
COB/TPL activities
Drafting policies and procedures that comply with federal requirements and state laws
Carrying out COB/TPL activities for Medicaid beneficiaries, including identifying third
party resources, coordinating benefits during claims payment, filing claims and
recovering payment for Medicaid benefits from settlements or awards made by liable
third parties, and making claims against the estates of deceased Medicaid beneficiaries
when appropriate
Advising CMS on current COB/TPL issues through the COB/TPL Technical Advisory Group
(TAG)
Reporting on recoveries, indicating the portion of recovered funds due to the federal
government
COB/TPL Technical Advisory Group (TAG)
The COB/TPL TAG is a forum for state Medicaid senior COB/TPL managers to discuss technical and
operational issues and share best practices with CMS, relating to Medicaid policy issues. The purpose
of the TAG is to inform and advise CMS as it prepares guidance, identifies and resolves issues, reviews
operational policies, and carries out its responsibilities with respect to Medicaid COB/TPL
requirements. The TAG also enables CMS to apprise members of current and planned initiatives in
areas of interest. State members of the TAG include a Chairperson and 10 State Representatives, one
for each of the 10 CMS regions. Each State Representative is responsible to solicit subjects for
discussion from the states in his region and share TAG meeting summaries and other communications
with the states. The COB/TPL team and Regional Office staff attend monthly conference calls, and
other program and state staff attend the TAG meetings, as appropriate.
17
B. Federal Funding of COB/TPL Activities
The federal government pays a portion of the cost of health care items and services provided to
Medicaid beneficiaries, as well as a portion of the costs of administering the COB/TPL activities in
each state.
The rate of federal matching funds (the “Federal Medical Assistance Percentage,” or “FMAP”) for
health care items and services varies by state, with 50 percent at the minimum. For
administrative costs, including carrying out COB/TPL activities, the federal government covers 50
percent of state Medicaid agencies’ (SMA) costs.
1
Federal matching funds are not available for Medicaid payments if:
2
The SMA fails to comply with COB/TPL rules by failing to establish the liability of a third
party and seek reimbursement from that third party
The SMA did not incur any costs since it received reimbursement from a liable third
party
The SMA should prohibit private insurers from discriminating against Medicaid
beneficiaries. For example, a private health insurer is prohibited from limiting or
excluding payments on the basis of the individual is Medicaid eligible.
If the SMA receives federal matching funds for a payment and is later reimbursed by a
liable third party, the SMA should refund the federal government for its share of the
payment, less any amount needed for incentive payments.
3
1
42 CFR § 433.140(b).
2
42 CFR § 433.140(a).
3
42 CFR § 433.140(c).
References
Statutes & Regulations
FFP and Payment of Federal Share. 42 CFR § 433.140
18
C. Assignment of Rights (AOR)
1. Relationship to Medicaid COB/TPL Activities
Medicaid’s AOR requirements are part of the eligibility determination process, but they also
support Medicaid COB/TPL activities. Specifically, AOR supports Medicaid’s payer of last
resort status by providing the basic authority for COB with beneficiaries’ health insurance
coverage and for recovery from settlements in casualty/tort cases of all types. Questions
about AOR as it applies to COB/TPL should be directed to the DHPC, DEHPG.
General information about AOR as it applies to Medicaid eligibility is provided below. Detailed
questions about AOR policy should be directed to the Division of Eligibility and Enrollment (DEE),
Children and Adults Health Programs Group (CAHPG).
2. AOR: General Requirements Related to Medicaid Eligibility
Individuals must assign to the Medicaid program their rights to medical support and payment of
medical care from a third party.
4
The individual must assign his or her rights (as well as the rights of any other eligible
individuals for whom the applicant has the legal authority to assign rights), and
cooperate in identifying and providing information to assist the state Medicaid agency
in pursuing liable third parties, unless the individual has good cause not to do so.
States must provide Medicaid to any otherwise eligible individual who
5
:
o Cannot legally assign his or her own rights
o Would otherwise be eligible for Medicaid but for the refusal of a person legally able
to assign the individual’s rights or to cooperate on the individual’s behalf
Except for poverty level pregnant women, an individual must cooperate with the state
Medicaid agency in establishing paternity and obtaining medical support or payments,
unless the individual has good cause not to do so.
Individuals who are able and required to assign their rights to medical support and payment of
medical care, but fail to do so, are not eligible for Medicaid, and a state Medicaid agency may
not pay for any services for those individuals.
4
Social Security Act § 1902(a)(45); Social Security Act § 1912.
5
42 CFR § 433.148.
19
Medicare beneficiaries are not legally allowed to assign their rights to Medicare (except to
allow payment directly to providers). As a result, individuals who are eligible for both Medicare
and Medicaid will only assign their rights to Medicaid.
In some states, individuals will need to affirmatively assign their rights as part of the Medicaid
application. In other states, assignment of rights to the SMA is automatic under state law. If
assignment is automatic, the state must inform the individual of the terms of the state law and
that accepting Medicaid coverage leads to assignment.
6
For Supplemental Security Income beneficiaries in some states (these states are referred to as
“1634” states), the Social Security Administration (SSA) determines whether an individual is
eligible for Medicaid. In these cases, the SSA will explain orally the requirement to assign
rights to Medicaid. The SSA will also explain that the applicant must cooperate with the SMA
in establishing paternity and providing information to assist the state in pursuing any liable
third party. The SSA will have the applicant sign a form to assign rights.
6
42 CFR § 433.146.
References
Statutes & Regulations
Social Security Act § 1902(a)(45).
Social Security Act § 1912.
Rights Assigned; Assignment Method. 42 CFR § 433.146.
l f l b l §
20
D. Payer of Last Resort
1. General Requirements
Medicaid is generally the “payer of last resort,” meaning that Medicaid only pays claims for covered
items and services if there are no other liable third party payers for the same items and services. This
concept is implied in statute and regulation, and has been cited by the U.S. Congress and the U.S.
Supreme Court.
The Social Security Act (the Act) requires that states take “all reasonable measures to ascertain
the legal liability of third parties.”
7
The Act further defines third party payers to include, among
others, health insurers, managed care organizations (MCOs), and group health plans (health
plans offered by an employer or employee organization to provide health coverage to
employees and their families),
8
as well as any other parties that are legally responsible by
statute, contract, or agreement to pay for care and services. The regulations mirror this
definition of third parties
9
.
This broad definition of “third parties” includes a range of federal programs, including the
following:
Medicare
TRICARE/CHAMPUS
The Vaccine Injury Compensation Fund
Public health programs administered by the Health Resources and Services Administration,
Centers for Disease Control and Prevention, and the Substance
Abuse and Mental Health Services Administration (e.g., the Hansen’s Program [leprosy];
Black Lung program [coal worker’s pneumoconiosis])
The requirements for when Medicaid will and will not pay for a particular service if a third party
is liable are described in more detail in the Coordination of Benefits chapter.
2. Exceptions
There are a few exceptions to the general rule that Medicaid is the payer of last resort and these
exceptions generally relate to federal-administered health programs. For a federal-administered
program to be an exception to the Medicaid payer of last resort rule, the statute creating the
program must expressly state that the other program pays only for claims not covered by
Medicaid; or, is allowed, but not required, to pay for health care items or services.
7
Social Security Act § 1902(a)(25).
8
Social Security Act § 1902(a)(25)(a).
9
42 CFR § 433.136.
21
The federal statutes creating the following programs expressly state that they pay for a service
after Medicaid (and thus are exceptions to the payer of last resort rule):
Crime Victims Compensation Fund,
10
Parts B and C of the Individuals with Disabilities Education Act (IDEA),
11
Ryan White Program,
12
Indian Health Services,
13
Women, Infants, and Children Program,
14
Veteran’s benefits, for emergency treatment provided to certain veterans in a non-VA facility,
15
Veteran’s benefits for state nursing home per diem payments,
16
State health agencies,
17
State vocational rehabilitation agencies,
Grantees under Title V of the Social Security Act (Maternal and Child Health Service Block
Grant), e.g. Children with Special Health Care Needs if provided for by arrangement or
agreement with the state Medicaid agency).
World Trade Center Health Program; P.L. 111-347
Title IV-E prevention and family services (Section 8082(b)(1) of H.R. 6 was amended by section
471(e)(10) of the Act effective October 3, 2018).
Additionally, Medicaid will pay for a service if there is another party that may—but is not legally
obligated to—pay for the service. Two examples of this are the Older Americans Act (OAA) and the
Federal Emergency Management Agency (FEMA).
Under the OAA, there is a source of funding to cover some services that are also covered by
Medicaid. Individuals, however, are not legally entitled to receive services through the OAA,
and thus the OAA program has no legal obligation to cover those services. Since the OAA
program is not legally liable for the service, the OAA does not fall within the definition of “third
party.” Accordingly, Medicaid will pay for a service even if the OAA program would also pay for
the service.
FEMA will sometimes pay for items, such as wheelchairs, that would otherwise be covered by
Medicaid. FEMA is not legally obligated to pay for those items, however, and therefore
Medicaid could pay for the service.
10
42 U.S.C. § 10602.
11
Social Security Act § 1903(c)
12
42 U.S.C. §§300ff et seq.
13
See Social Security Act §1905(b)
14
42 U.S.C. § 1786.
15
38 U.S.C. § 1715.
16
38 U.S.C. § 1741.
17
Social Security Act § 1902(a)(11).
22
References
Statutes & Regulations
Social Security Act § 1902(a)(11).
Social Security Act § 1902(a)(25).
Social Security Act § 1903(c).
Social Security Act § 1905(b).
Definitions. 42 CFR § 433.136.
Purpose. 42 U.S.C. §§300ff et seq.
Special Supplemental Nutrition Program for Women, Infants, and Children. 42 U.S.C. § 1786.
Crime Victim Compensation. 42 U.S.C. § 10602.
23
Chapter II: Coordination of Benefits (COB)
A. State Plan Requirements
1. Required Elements in State Plan
State plans must include specific information and assurances related to COB/TPL.
18
The
following sections of the Medicaid state plan address TPL, liens and estate recovery, and
Medicare cost-sharing payment methodologies for dually eligible beneficiaries:
TPL: In Section 4.22 (a and b), states must affirm compliance with statutory and
regulatory requirements in Section 1902(a)(25) of the Act and 42 CFR 433 Subpart D.
The section also requires narrative descriptions of state processes and limitations for
most of the regulatory requirements. For additional information, please also refer
to pages 69 and 70 of the Medicaid state plan.
Liens and Recoveries: In Section 4.17 and Attachment 4.17-A, states affirm
compliance with statutory and regulatory requirements and/or election of statutory
and regulatory options in sections 1902(a)(18) and 1917(a) and (b) of the Act and 42
CFR 433.36. (NOTE: The reference to age 65 in the regulation is superseded by the
change to age 55, which was made in the Omnibus Budget Reconciliation Act (OBRA)
1993 amendment to section 1917(b)(1)(B) of the Act.) Section 4.17 and Attachment
4.17-A also require narrative definitions and descriptions of state processes and
limitations for most of the statutory and regulatory requirements. For additional
information please also refer to pages 53 and 53 a-h of the Medicaid state plan.
Medicaid’s methodology for paying Medicare cost sharing for dually eligible
beneficiaries: In Supplement 1 to Attachment 4.19-B, states list elections with
regard to paying Medicare coinsurance, deductible, and copayment costs for various
dual eligibility coverage groups, as required by sections 1905(p) and 1902(n) of the
Act. States may also include narrative descriptions of state limitations on payment
of Medicare cost sharing for specific services or coverage groups.
For additional information on a state's Medicaid Buy-in information, please refer to
pages 29 and 29a-d of the Medicaid state plan.
18
42 CFR § 433.137.
24
2. State Laws Related to COB/TPL
a. COB
To ensure that states can effectively coordinate benefits, the Deficit Reduction Act of
2005 (DRA of 2005) requires states to provide assurance satisfactory to the Secretary,
U.S. Department of Health and Human Services (DHHS), that they have laws in effect
imposing certain requirements on health insurers and other potentially liable third
parties. Section 6035 of the DRA amended section 1902(a)(25) of the Act.
19
States
must enact these laws in order to receive federal matching dollars for their Medicaid
programs. Specifically, states must enact laws requiring that health insurers, broadly
defined to include most potentially liable third parties, do the following:
Accept the state’s right to recover amounts it has paid through its Medicaid
program.
Accept that Medicaid beneficiaries have assigned their rights to the state for any
amounts paid by the state on the beneficiaries’ behalf.
Process, and if appropriate, pay claims for reimbursement from Medicaid to the
same extent that the plan would have been liable had it been properly billed at
the point-of-service.
Not deny claims submitted by the state on the basis of a procedural formality,
such as the date of submission of the claim, the type or format of the claim form,
or a failure to present proper documentation of coverage at the point of service,
if the claim is submitted by the state within three years from the date the item
or service was provided and the state began its action to enforce its rights within
six years of the state submitting its claim.
Each state’s law is intended to clarify the responsibilities of potentially liable third
parties, facilitating a smooth coordination of benefits process. To be considered
satisfactory, the state law must include, at a minimum, the requirements set out in
section 6035 of the DRA of 2005. A state may elect to impose a more stringent standard;
for example, a state may choose to lengthen the minimum claims filing time period
beyond the 3-year period specified in the DRA of 2005. The format and content of state
laws will vary from state to state.
19
Social Security Act § 1902(a)(25)(I) (added by Section 6035 of the Deficit Reduction Act of 2005).
25
b. Estate Recovery
Medicaid estate recovery claims must be filed against the estate of a deceased Medicaid
beneficiary in accordance with the state’s probate code specifications. The probate
code may also establish the Medicaid agency’s standing in the priority order of payment
to creditors of the estate.
B. Identifying Liable Third Parties
1. Defining Third Party Payers
The first step in the coordination of benefits process is identifying potentially liable third
parties. Under the Medicaid rules, a “third party” is broadly defined to include
20
:
Health insurance
Self-insured plans (employer provides health benefits and is at risk to pay claims)
Group health plans (employer- or employee organization-offered plans)
Service benefit plans
Managed care organizations
Pharmacy benefit managers (PBMs)
Workers’ compensation
Liability insurance (including automobile, homeowners and medical malpractice)
Indemnity plans (if review of the plan determines that the policy provides for
payment of health care items or services, including policies that pay a cash
benefit to the policyholder if the payment is conditional upon the occurrence of
a medical event).
Any other parties that are, by statute, contract, or agreement legally responsible
for payment of a claim for a health care item or service.
20
See section 1902(a)(25) of the Social Security Act; 42 CFR § 433.136.
References
Statutes & Regulations
Social Security Act § 1902(a)(25)(I)
Section 6035 of the Deficit Reduction Act of 2005.
State Plan Requirements. 42 CFR § 433.137.
26
2. Obtaining Health Insurance Information during Eligibility
Determinations
The SMAs collect information about potential third party payers at eligibility
determination and redetermination or in follow-up activities after completion of the
eligibility process. The exact process for collecting the information will depend on
whether the SMA or some other agency determines whether an individual is eligible. If
another agency determines eligibility, the SMA must have in place an agreement with
the other agency outlining the data that the other agency will collect and how it will
transmit that data to the SMA.
In some cases, an individual may not know that they have or are eligible for third party
health insurance. State Medicaid agencies may want to ask additional questions if an
individual reports income from any one of the following sources:
Railroad retirement benefits or Social Security retirement/disability benefit.
These benefits may indicate eligibility for Medicare coverage.
Longshore and Harbor Workers’ Compensation and Worker’s Compensation.
These benefits include compensation for medical care related to injuries on the
job.
Black Lung Benefits. Benefits include compensation for coal worker’s
pneumoconiosis (“Black Lung Disease”).
Title IV-D Payment. Financial support payments from an absent parent may
indicate potential medical support.
Certain Work History. Individuals who have belonged to a union or have served
in the military may have access to health insurance coverage.
Medicaid’s eligibility determination activities support Medicaid COB/TPL efforts, by
identifying third party resources such as health insurance and pending tort/casualty
claims. States also provide information about assignment of rights to third party
payments and estate recovery policies at, or shortly after, the eligibility determination.
In 1634 states, SSA has the responsibility for obtaining assignment of rights and third
party information from applicants.
Questions about eligibility determination and follow-up activities, as they apply to
COB/TPL, should be directed to the DHPC, DEHPG.
27
General questions about eligibility determination and follow-up activities should be
directed to the DMEP, CAHPG.
3. Exchanging Data with Other State and Federal Databases
The SMA must also attempt to match beneficiary-identifying information with data with
other state databases that may provide valuable information on potentially liable third
parties. Specifically, the SMA is required to try to obtain data exchange agreements
with the following information systems
21
:
State Wage Information Collection Agency (SWICA) and the Social Security
Administration wage and earnings files. Data from these sources may identify an
employer of the beneficiary or the beneficiary’s parent. Once the SMA has
identified the employer, the agency must follow up to determine whether the
employer offers health insurance to the beneficiary (or the beneficiary’s parent).
State Workers’ Compensation or Industrial Accident Commission Files. These
databases may indicate that a beneficiary had a work-related injury covered by
workers’ compensation.
State Motor Vehicle Accident Report Files. Similarly, the motor vehicle accident
report files will help a state Medicaid agency in identifying a beneficiary injured
in a motor vehicle accident, regardless of whether the individual was a driver,
passenger, bicyclist, or pedestrian. Motor vehicle insurance may be liable for
these claims.
If the SMA is unable to secure agreements with these other data exchanges, it must
submit documentation to the CMS RO demonstrating that the agency made a
reasonable attempt to enter into these agreements.
The SMA should reflect how frequently it conducts each of these data exchanges.
The SMA should also leverage or establish data query of federal systems to check for
Medicare eligibility. For information on relevant CMS systems, please see here. For
information on relevant SSA systems, please see here.
4. Diagnosis and Trauma Code Edits
21
42 CFR § 433.138.
28
SMAs must also review claims to flag diagnoses that are indicative of traumatic injury, if
the SMAs have determined that these diagnoses are likely to indicate the existence of a
potentially liable third party. A third party (or his/her insurer) may be liable for claims
arising out of that injury.
22
Once a claim has been flagged for a particular diagnosis, the SMA should follow up to
determine whether there is a liable third party. The state should identify the trauma
codes that yield the highest third party collections and give priority to following up on
those codes. SMAs may follow up by contacting the beneficiary by phone or
questionnaire to determine the nature of the trauma and then follow up with the
relevant insurance companies, attorneys, witnesses, and others to establish liability.
After follow up, all information that identifies legally liable third parties should be
included in the eligibility file, the third party database, and third party recovery unit (for
more information, see “Incorporating TPL into Information Systems”, below).
SMAs may elect not to identify or follow up on specific codes, based on experience that
the codes are not productive of recovery from third parties. SMAs do not need to
submit a state plan amendment or TPL Action Plan to change the codes subject to
trauma code editing. NOTE: CMS still requires that the state plan reflects how
frequently the SMA completes diagnosis and trauma edits and also outlines a procedure
for identifying the trauma codes that yield the highest third party collections and giving
priority to following up on those codes.
SMAs should not follow up on specific codes if it is not cost-effective to do so. SMAs
may set a cost-effectiveness threshold for initiating recovery efforts, choosing a specific
dollar amount, a period of time to accumulate claims, or a combination of those
methods. If the SMAs elect to set a time period threshold, SMAs must accumulate
claims using a specific code tied to the beneficiary, and must pursue those claims once
the accumulated claims collectively reach the threshold level.
5. Incorporating TPL into Information Systems
Once an SMA has identified a liable third party, it must incorporate that information into
its information system to streamline the COB process. Regulations specify that the
SMAs must incorporate information related to liable third parties in the following
systems:
Eligibility case file
Third party database
22
42 CFR 433.138(e).
29
Third party recovery unit
This regulatory requirement was promulgated before automated eligibility
determination systems and/or TPL subsystems of the MMIS existed in many SMAs. At
that time, the hard-copy file was often the sole eligibility case file. Currently, SMAs can
rely on the electronic files in the Medicaid eligibility determination system for the
beneficiary as the “eligibility case file,” perhaps supplemented by a hard-copy file
containing verifications or historic information. The MMISs now have the TPL
subsystem, which can be considered the “third party database.” “Third party recovery
units” still exist, but COB developmental work (determining the nature and scope of a
beneficiary’s health insurance coverage, primarily for MMIS claims adjudication
purposes) is generally done via direct automated data matches between MMIS and the
carriers (or data matching through use of a contractor). The actual recovery work of the
third party recovery units, primarily with third party resources other than health
insurance, in casualty/tort claims, estate claims, or medical malpractice, may still be
recorded in hard-copy files or have automated systems support.
Given the current level of automation, CMS allows the SMAs flexibility in deciding where
to maintain required information, in hard-copy or electronic form, to facilitate effective
use. The key point is that the SMA gathers and maintains the information specified in
the regulations, to support Medicaid’s status as payer of last resort (except for the
limited instances of statutory exception).
SMAs decide how to maintain information in the manner they deem most effective and
efficient, so long as all information specified in the regulations and any State Medicaid
Manual (SMM) guidance is maintained. The SMA should indicate in the state plan or the
TPL Action Plan where specific information is maintained. The SMM guidance suggests
that the TPL Action Plan is the better place to record location.
6. TPL Action Plans
The SMA may develop and submit a TPL Action Plan to the CMS RO. The action plan
should specify how the SMA will do the following
23
:
Identify third parties
Determine the liability of third parties
Avoid payment of third party claims
Recover reimbursement from third parties, as appropriate
Record information and actions related to the action plan
23
42 CFR § 433.138(k).
30
The TPL Action Plan is the MMIS operational side of COB/TPL activities. The CMS/SMA’s
MMIS contract is the official document identifying system requirements related to
COB/TPL activities. If the SMA chooses, they can update their TPL action plan to reflect
current federal policy requirements. If a SMA establishes new or revised TPL MMIS
policies, procedures, and technologies that require CMS approval, the SMA may also
update its TPL Action Plan when it receives approval, and provide an updated copy to
the CMS RO.
7. Waiver of Requirements
SMAs may request a waiver of certain requirements to determine TPL, if the SMA
determines that the activity would not be cost-effective. An activity is not cost-effective
if the cost of the required activity exceeds the TPL recoupment and the required activity
accomplishes, at the same or higher cost, the same objectives as another activity that is
being performed by the SMA.
24
To obtain a waiver, the SMA must submit a request for waiver of the requirement in
writing to the CMS CO, through the CMS RO. The request must document that meeting
a requirement is not cost-effective. CMS has 30 days to grant or deny the waiver.
If CMS grants the waiver without specifying an end date, the SMA must notify CMS if
t
here is a change in the conditions that supported the request and approval of the
waiver.
CMS may rescind a waiver at any time, if it determines that the SMA no longer meets
the criteria for approving the waiver. If the waiver is rescinded, the SMA has 6 months
from the date of the rescission notice to meet the requirement that had been waived.
24
42 CFR § 433.138(l).
References
Statutes & Regulations
Social Security Act §1902(a)(25)
Definitions 42 CFR § 433.136.
Identifying Liable Third Parties. 42 CFR § 433.138.
31
C. Payment of Claims
1. Paying Claims with Established TPL
a. Standard COB: Cost Avoidance
If the SMA has determined that a third party is likely liable for a claim, it must reject
(but not deny) the claim in most circumstances.
25
This is referred to as “cost
avoidance” and generally occurs when the third party resource is health insurance
coverage.
When an SMA rejects a claim because of known or suspected TPL, it sends the claim
back to the provider noting the third party that Medicaid believes to be legally
responsible for paying the claim. The provider should then bill the legally liable third
party. If a balance remains after the third party has paid the provider or denied payment
for a substantive (i.e., non-procedural) reason, the provider can submit a claim to the
SMA for payment of the balance, up to the maximum Medicaid payment amount
established for the service in the state plan. We note that generally Medicare fee-for-
service claims will automatically cross over to the SMA to adjudicate for coverage of the
Medicare cost-sharing amount (see Section E for detailed discussion).
A rejected claim is a claim that does not meet the state’s basic format or data
requirements for submission. It contains one or more errors (for example, an invalid
beneficiary ID number or a failure to identify a suspected liable third party) that are
discovered via initial system edits, and before the claim is adjudicated. The SMA alerts
the provider or clearing house that the claim cannot be processed as-is. Since rejected
claims are not entered into the Medicaid program’s claims processing system, typically
no internal control number (ICN) is assigned.
A denied claim passes initial system edits, is processed and assigned an ICN, but
payment is denied. A Remittance Advice letter is sent back to the provider containing a
denial code and explanation (for example: “This Procedure Requires Prior
Authorization”). Denied claims appear in the Medicaid program’s claims adjudication
reports. Typically, denied claims can be appealed and sent back to the SMA for
processing.
States often employ clearinghouses for claims submission to lower the incident of
rejected claims. A clearinghouse has software that allows it to “scrub” a claim prior to
submission to the State. Online claim submission portals used by States will often reject
a claim in real-time (i.e., shortly after the provider submits the claim. The provider
should then bill the legally liable third party. Often, real-time rejection by the portal
25
42 CFR § 433.139(b)(1).
32
does not allow the State to track rejection rates. Rejections for claims submitted
electronically often come back as an “Electronic Data Interchange,” (EDI) rejection and
will not show up on a Remittance Advice from the state. An EDI rejection might show a
brief message such as “Please Resubmit – Invalid Member Number” or something
similar.
Because rejected claims are not considered to have been “received” by the SMA, and do
not make it into the claims processing system, Medicaid beneficiaries cannot be held
liable because the services were never actually billed. Provider follow-up action is to
correct and resubmit the claim. Denied claims have been accepted and processed by the
Medicaid program’s adjudication system, and should not be resubmitted because the
State has already finalized the payment determination.
Provider follow-up action would be to appeal the denial.
Detailed questions regarding MMIS system processing of denied vs rejected claims
should be directed to the Division of State Systems Group (DSG).
The Bipartisan Budget Act (BBA) of 2018 (Public Law 115.123) was signed into law on
February 9, 2018. The BBA of 2018 makes changes to the BBA of 2013, specifically to
Section 202(a) to SSA Section 1902(a)(25)(E) and (F). These changes narrow the TPL cost
avoidance exceptions. These exceptions were delayed by two years, and were effective
October 1, 2019. The repeal and amendment of the BBA of 2013 Section 202 provisions
take effective retroactively, as if enacted on September 30, 2017, and applies with
respect to any open claims, including claims pending, generated or filed after that date.
This means that a state is no longer required to cost avoid for prenatal (including labor
and delivery and post-partum care) services retroactively to September 30, 2017.
The rules establishing whether the SMA must pay all or a portion of the balance are
discussed below.
b. Exception to Standard COB: Pay and Chase
There are some circumstances, however, under which an SMA may pay a claim even if a
third party is likely liable and then seek to recoup that payment from the liable third
party. This is referred to as “pay and chase.” Pay and chase is required or permitted in
certain circumstances where there is a risk that if the SMA were to cost-avoid claims,
providers might choose not to participate in the Medicaid program, in order to avoid
dealing with the administrative burden associated with Medicaid cost avoidance claims
processing requirements. Specifically, pay and chase is required or permitted in the
following circumstances:
Medical Support Enforcement. SMAs must pay and chase if the claim is for a
service provided to an individual on whose behalf child support enforcement is
33
being carried out if (1) the third party coverage is through an absent parent and
(2) the provider certifies that, if the provider has billed a third party, the provider
has waited 100 days from the date of service without receiving payment before
billing Medicaid.
26
This requirement is intended to protect the custodial parent
and the dependent children from having to pursue the non-custodial parent,
his/her employer, or insurer for third party liability.
Preventive Pediatric Services. SMAs must pay and chase for claims for
preventive pediatric services (including EPSDT).
27
Depending on how a provider bills, the SMA may need to pay and chase claims that it
otherwise would attempt to cost avoid. For example, some providers submit a bundled
claim. If a bundled claim includes any cost-avoided services (in addition to pay and chase
services) and the cost-avoided services cannot be identified and adjudicated separately,
the SMA must pay and chase the entire bundled claim to ensure it complies with the
requirements.
After an SMA pays a claim using the pay and chase method, it must then seek to recover
from the liable third party, unless the recovery of reimbursement would not be cost-
effective.
2. Paying Claims with No Established TPL
If there is no established liable third party, the SMA may pay claims to the maximum
Medicaid payment amount established for the service in the state plan. If the SMA later
establishes that a third party was liable for the claim, it must seek to recover the
payment. This may occur when the Medicaid beneficiary requires medical services in
casualty/tort, medical malpractice, Worker’s Compensation, or other cases where the
third party’s liability is not determined before medical care is provided. It may also
occur when the SMA learns of the existence of health insurance coverage after medical
care is provided.
The SMA should first seek recovery from the liable third party. If that is not feasible (for
example, Medicare will not accept a claim directly from an SMA), it may be necessary to
recoup the payment from the provider and ask the provider to rebill correctly. SMAs
must seek reimbursement within sixty days from the end of the month in which it learns
of the existence of the liable third party.
26
42 CFR § 433.139(b)(3)(ii).
27
42 CFR § 433.139(b)(3).
34
3. Suspension or Termination of Recovery Efforts
SMAs may suspend or terminate efforts to seek reimbursement from a liable third party
if they determine that the recovery would not be cost-effective.
28
SMAs may set
threshold amounts for recoveries and may accumulate billings until it would be cost-
effective to seek reimbursement. If an SMA sets threshold amounts or accumulates
billings, it must:
29
Either specify in its state plan the threshold amount or other guideline to use in
determining whether to seek reimbursement from a liable third party or
describe the process it uses to determine whether recovery would be cost-
effective. If an SMA sets its thresholds above $100 for health insurance or $250
for casualty claims, it must submit documentation to CMS supporting that
recovery would not be cost-effective below those thresholds.
Specify in its state plan a dollar amount or period of time for which the SMA will
accumulate billing with respect to either an individual Medicaid beneficiary or a
particular third party. For example, an SMA may accumulate pharmacy claims
for a sixty-day period or until a set threshold is reached before it will bill the
third party.
4. Waiver of Requirements
SMAs are permitted to request a waiver of the general requirements to cost-avoid
claims if cost avoidance would not be cost-effective.
30
These requests seek authority to
pay and chase an entire category of claims (for a specific covered service, for example)
instead of applying normal cost-effectiveness authority to suspend or terminate
recovery efforts for a specific claim, as discussed in Subsection 3, above. Generally, the
SMA must prove that the pay and chase method of processing these claims is at least as
cost-effective as the cost avoidance method. An activity would not be cost-effective if
the cost of the activity exceeds the expected recovery and the activity accomplishes, at
the same or at a higher cost, the same objective as another activity of the SMA.
The SMA must submit a request for a cost avoidance waiver in writing to the CMS CO,
through the CMS RO.
31
The request must document that meeting a requirement is not
cost-effective. SMAs may submit, for example, documentation related to the
28
42 CFR § 433.139(f).
29
42 CFR § 433.139(f).
30
42 CFR § 433.139(e).
31
42 CFR § 433.139(e).
35
administrative costs, the denial rate for claims, equipment costs, and computer costs.
CMS has 30 days to grant or deny the waiver after receiving sufficient information to
determine that it is not cost-effective to cost avoid claims. If CMS grants the waiver, the
SMA must notify CMS if there is a change in waiver conditions. CMS may rescind a
waiver at any time, if it determines that the SMA no longer meets the criteria for
approving the waiver. If the waiver is rescinded, the SMA has 6 months from the date of
the rescission notice to meet the requirement that had been waived.
Since current billing and claims systems are more sophisticated than when the cost
avoidance waivers were first permitted in the 1980s, it is rare that an SMA can
sufficiently demonstrate that it is not cost-effective to cost avoid claims. As a result,
CMS rarely, if ever, grants a cost avoidance waiver. As of 2014, there were no currently
approved cost avoidance waivers.
5. Never-covered services
States may exempt certain items or services from third party liability (TPL) requirements
when submission of claims for those items or services would always result in denial
because the general insurance industry does not cover them. CMS requires the state to
have clear and convincing documentation of non-coverage by insurers. If a state has
documentation, there is no need to further verify by submitting claims because there
would be no liable third party and Medicaid TPL rules would not come into play. The
controlling regulation is found at 42 CFR 433.139(b)(1), which states that "the
establishment of third party liability takes place when the agency receives confirmation
from a provider or a third party resource indicating the extent of third party liability."
However, the state needs to follow certain procedures to document thoroughly the
absence of third party coverage. States are permitted to take the following steps to
satisfy the documentation requirements:
The state may bill third parties and receive claims rejection notices. However, the
state must assure that national billing codes for the items or services are included on
claims, or, if local billing codes are used, that national codes and local codes are
matched, so that rejection notices accurately reflect non-coverage of the item or
service.
The state may conduct a survey of insurers' benefit packages. The state can
demonstrate non-coverage if the state confirms with the top ten insurance carriers
that their scope of benefits did not cover an item or service. However, since many
insurers change their benefit packages on an annual basis, the state would have to
confirm continued non-coverage on a yearly basis.
36
For insurers not included in a survey, or as an alternative to a survey, the state may
establish a precedent file by initially billing the insurer to obtain documentation of
non-coverage, so that future claims would not need to be submitted to that
insurer. The state would have to confirm continued non-coverage on a yearly basis.
The state may request verification from the state agency or commission that
oversees compliance with state law and regulations governing insurance plans that a
certain item or service is never-covered in insurance policies available in the state,
either for the general population or for a specific population segment (for example,
children under age 21). The state would have to confirm continued prohibition of
coverage on a yearly basis.
When non-coverage has been documented, the state may permit providers to use a
specific code on the claim denoting non-coverage by the third party. This code could
allow the MMIS to override the cost avoidance edit and pay the claim. The state would
have to require providers to maintain documentation to substantiate non-coverage
when using override codes, and could conduct provider audits to assure that the
provider has appropriate documentation of non-coverage.
References
Statutes & Regulations
BBA of 2018 Payment of Claims.
42 CFR § 433.139.
37
D. Medical Child Support Payments
1. Relationship to Medicaid COB/TPL Activities
Medicaid’s Assignment of Rights (AOR) requirements include pursuit of medical support
from absent parents of Medicaid child beneficiaries. Generally, SMAs will refer custodial
parents to the Office of Child Support Enforcement (OCSE), the state IV-D agency, to
obtain a support order. Cooperation with this process is required as part of the
determination of Medicaid eligibility for the custodial parent (in the absence of good
cause not to cooperate). These activities also support Medicaid COB/TPL efforts by
establishing court orders for the absent parent to enroll the child in available health
insurance, or to pay a sum of cash medical support in lieu of such enrollment. The
availability of health insurance, or of cash support, reduces Medicaid’s costs for the
child’s health care.
Questions about medical child support as it applies to COB/TPL should be directed to the
DHPC, DEHPG.
General information about the process of obtaining medical child support is provided
below. Detailed questions should be directed to the DMEP, CAHPG.
2. General Information
Recovering from liable third parties may require assistance from other state agencies or
from other states.
To ensure that SMAs are able to recover from third parties to the maximum extent
feasible, states enter into cooperative agreements with other states and agencies.
Specifically, as a condition of receiving federal matching dollars, the state plan provides
for entering into written cooperative agreements for the enforcement of rights with at
least one of the following entities:
The state’s title IV-D agency (OCSE);
Any appropriate agency of any state;
Appropriate courts and law enforcement officials.
32
SMAs generally have flexibility with regard to the substance of cooperative agreements.
They must, however, include in their agreements with title IV-D agencies that the SMA
will provide reimbursement to the title IV-D agency only for those child support services
32
42 CFR § 433.151.
38
performed that are not reimbursable by the OCSE under title IV-D of the Act and that
are necessary for the collection of amounts for the Medicaid program.
The state plan must also provide for making incentive payments to a political
subdivision, a legal entity of the subdivision, or another state that enforces and collects
medical support and payments for the SMA.
33
The incentive payment must be 15
percent of the amount collected and be made from the federal share of the total
amount collected.
34
Incentive payments using federal funds are only permitted if the
political subdivision or other state is involved in the enforcement and collection of
medical support and payments:
“Enforcement” means the pursuit of medical support against someone other than
the beneficiary or the pursuit of medical support against some source, if the other
source is obligated to pay for medical services because of its relationship with an
absent responsible relative of the beneficiary. For example, enforcement includes
the pursuit of medical support against an insurance company covering a
noncustodial parent and that parent’s dependents. Enforcement does not include
pursuit of a third party based on a health insurance policy held by the Medicaid
beneficiaries, themselves.
“Collection” means amounts collected from sources that are responsible to pay for
medical services provided to Medicaid beneficiaries.
3. Court-Ordered Health Insurance Coverage for Medical
Child Support
SMAs will pay and chase claims for a child on whose behalf child support enforcement is
being carried out when health insurance coverage is provided through the absent
parent. This is an exception to the standard cost avoidance processing of claims for
insured Medicaid beneficiaries.
4. Court-Ordered Cash Payments for Medical Child Support
Child support orders may include a requirement that the noncustodial parent make a
cash payment for medical support; for example, when the noncustodial parent does not
have access to, or cannot afford to pay for, health coverage for the child. State OCSEs
may request this type of support payment when requesting general child support orders
33
42 CFR § 433.153(a)
34
42 CFR § 433.153(b).
39
for Medicaid-enrolled children. When the support is collected, the OCSE will send the
medical support payments to the SMA.
5. Distribution of Collections
Once a state has made collections, the SMA must distribute collections among the state,
the federal government, and the beneficiary in accordance with the following rules:
35
State. The SMA should receive an amount equal to the non-federal share of the
Medicaid expenditures that were recovered.
Federal Government. The SMA must distribute to the federal government the
federal share of the Medicaid expenditures that were recovered, minus any
incentive payments.
Beneficiary. If any amount remains, the SMA must distribute the remaining
funds to the beneficiary. Any amount given to the beneficiary must be treated
as income or resources, as appropriate.
Before the SMA makes distributions to the beneficiary, it should use funds recovered to
offset amounts spent on any Medicaid service provided to the beneficiary, even if that
service is not covered by the third party plan. This includes payment for premiums by
Medicaid to an insurer under a premium assistance program.
35
42 CFR § 433.154.
References
Statutes & Regulations
Cooperative Agreements and Incentive Payments. 42 CFR §
433.151.
Requirements for Cooperative Agreements for Third Party
Collections. 42 CFR § 433.152.
Incentive Payments to States and Political Subdivisions 42
40
E. Dually Eligible Beneficiaries
1. Introduction: Medicare and Medicaid Coverage for Dually
Eligible Beneficiaries
Medicare beneficiaries who have limited income and resources may get help paying for
their Medicare premiums and out-of-pocket medical expenses from Medicaid.
Medicaid may also cover additional services beyond those provided under Medicare.
Individuals entitled to Medicare and eligible for some form of Medicaid benefit are
often referred to as “dually eligible beneficiaries.” Dually eligible beneficiaries fall into
several different categories. These beneficiaries may be enrolled first in Medicare and
then qualify for Medicaid or vice versa.
2. Medicare Coverage
The Medicare program includes four components or “Parts”:
Medicare Part A. Medicare Part A is hospital insurance. Medicare Part A is
automatic for individuals aged 65 years or older (and certain individuals with
disabilities) who qualify for Social Security or railroad retirement benefits. Most
individuals do not pay a monthly premium for Medicare Part A coverage if they
or their spouse paid Medicare taxes while working. Individuals who are not
eligible for premium-free Medicare Part A may purchase coverage by paying
monthly premiums. Medicare Part A includes cost sharing on some services.
Medicare Part B. Medicare Part B is supplementary medical insurance that
covers, among other things, outpatient care and physician services. Medicare
Part B is voluntary, and individuals must enroll during specified enrollment
periods. All individuals will pay a monthly premium for Medicare Part B
coverage. Additionally, individuals must pay cost sharing for some services
covered under Part B.
Medicare Part C. Some individuals receive their Part A and Part B coverage
through private health plans, referred to as Medicare Advantage plans. Medicare
Advantage plans may also include prescription drug coverage offered under Part
D. In addition to the standard Part A and Part B benefits or Part D coverage,
Medicare Advantage plans may cover supplemental benefits, such as coverage
for dental care, vision care, acupuncture, or health club memberships. If the
supplemental benefits are covered for all enrollees in the Medicare Advantage
plan, the benefits are referred to as mandatory supplemental benefits. If the
41
enrollee may elect whether to receive the benefits, they are referred to as
optional supplemental benefits. CMS sets rules for and approves Medicare
Advantage plans, plan benefits, and cost sharing for enrollees.
o Mandatory Supplemental Benefits: Non-drug benefits that are not covered
by Medicare, but are covered by the plan for every enrollee of the plan.
Mandatory supplemental benefits are paid for in full, directly by (or on
behalf of) Medicare enrollees, in the form of premiums, cost sharing or
through application of rebate dollars.
o Optional Supplemental Benefits: Non-drug benefits that are not covered by
Medicare. However, plan enrollees may choose whether to elect and pay for
optional supplemental benefits. These services may be grouped or offered
individually.
Medicare Part D. Medicare also provides prescription drug coverage through
private plans, referred to as Medicare Part D. Medicare sets rules for and
approves Part D plans, plan benefits, and cost sharing for enrollees. Some
beneficiaries may be eligible for Low Income Subsidy (LIS), also known as Extra
Help, which lowers the costs of Medicare prescription drug coverage.
https://www.cms.gov/Medicare/Eligibility-and-
Enrollment/LowIncSubMedicarePresCov/index.html
3. Types of Dual Eligibility
“Dually eligible beneficiaries” generally describes individuals enrolled in Medicare and
Medicaid. These beneficiaries are enrolled in Medicare Part A and/or Part B and qualify
for help from Medicaid to pay some Medicare costs. Some dually eligible beneficiaries
may also qualify for additional Medicaid benefits, depending on income and resources.
The eligibility categories for dually eligible beneficiaries include:
Full Benefit Dual Eligible (FBDE) beneficiaries. An individual who is eligible for
Medicaid either categorically or through optional coverage groups such as the
medically needy. Medically needy refers to individuals whose incomes are
otherwise too high to qualify for Medicaid but who have uncovered medical
expenses that exceed their available income, or special income levels for
institutionalized or home and community-based waivers, but who does not meet the
income or resource criteria for a QMB or SLMB. (See below).
42
Dually eligible beneficiaries in the following categories are known as Medicare Savings
Program (MSP) beneficiaries:
Qualified Medicare Beneficiary Only (QMB; sometimes referred to as QMB Only).
A QMB is an individual who is entitled to Medicare Part A, has income that does not
exceed 100 percent of the Federal Poverty Level (FPL), and whose resources do not
exceed three times the Supplemental Security Income (SSI) limit.
Qualified Medicare Beneficiary Plus (QMB Plus). Like a QMB, a QMB Plus is an
individual who is entitled to Medicare Part A, has income that does not exceed 100
percent of the FPL, and whose resources do not exceed three times the SSI limit. A
QMB Plus also qualifies for full-benefit Medicaid coverage, often by meeting the
Medically Needy standards, or through spending down excess income to the
Medically Needy Level.
Specified Low-Income Medicare Beneficiary (SLMB; sometimes referred to as
SLMB Only). A SLMB is an individual who is entitled to Medicare Part A, has income
between 100 and 120 percent of the FPL, and whose resources do not exceed three
times the SSI limit.
Specified Low-Income Medicare Beneficiary Plus (SLMB Plus). Like a SLMB Only, a
SLMB Plus is an individual who is entitled to Medicare Part A, has income between
100 and 120 percent of the FPL, and whose resources do not exceed three times the
SSI limit. A SLMB Plus also qualifies for full Medicaid benefits, often by meeting the
Medically Needy standards, or through spending down excess income to the
Medically Needy Level.
Qualifying Individual (QI). A QI is an individual who is entitled to Medicare Part A,
has income between 120 and 135 percent of the FPL, and whose resources do not
exceed three times the SSI limit.
Qualified Disabled and Working Individuals (QDWI). A QDWI is an individual under
age 65 with a disability who lost Social Security disability benefits and Premium-free
Medicare Part A because they returned to work, but who is eligible for Medicare
Part A. The individual’s income may not exceed 200 percent of the FPL and
resources may not exceed two times the SSI limit.
Questions about Medicaid coverage groups for dually eligible beneficiaries should be
directed to DMEP, CAHPG.
43
4. Medicaid Coverage for Medicare Costs
Medicare cost-sharing includes Medicare Parts A and B premiums, coinsurance,
deductibles, and copayment amounts.
Medicaid will cover a different set of these benefits for each category of dually eligible
beneficiaries, as described in the chart below:
Category
Medicare
Part A
Premiums
Medicare
Part B
Premiums
Medicare
Cost-Sharing
(Except Part D)
Other
Medicaid
State Plan
Services/
Benefits
Part A
Part
B
QMB Only
QMB Plus
SLMB Only
SLMB Plus
*
QI
QDWI
FBDE
*
* SMAs may choose to cover Medicare cost-sharing for all Medicare-covered services
(Part A and/or Part B, as indicated above) or only pay for services covered in the state
plan.
Medicare Cost-Sharing Payment Methodologies
State Medicaid programs have some flexibility in setting their Medicare cost-sharing
payment methods. States can pay:
• The Medicare cost-sharing amount (generally called the Medicare rate).
• The Medicaid state plan rate for the same service when it’s provided to a non-
Medicare-eligible Medicaid beneficiary; or
• A negotiated rate that is approved by CMS.
The flexibility to set payment methods is established in the Social Security Act in §1902(n).
44
Section 1902(n)(1)-(3) is specific to a Qualified Medicare Beneficiary (QMB), but has historically
been applied to other categories of Medicare Savings Program (MSP) beneficiaries (QMB Plus,
SLMB Plus, etc.,) along with non-MSP beneficiary identified as Full Benefit Dual Eligible (FBDE)
beneficiaries.
States can choose to pay Medicare cost-sharing at the following rates:
Medicare Rate (MR): The state pays the amount that Medicare establishes as the cost-sharing
amount.
State Plan Rate (SP): If the state chooses to pay at the state plan rate, to determine the state
payment for services, the state compares the amount that Medicare has already paid for the
claim with the state plan rate. Usually, the state plan rate is lower than or equal to the
Medicare paid amount, resulting in a Medicaid payment of zero. However, if the state plan rate
is higher than the Medicare paid amount, the state would then pay the difference between the
Medicare paid amount and the state plan rate.
Negotiated Rate (NR): The state can also establish a negotiated rate for a type of service, a
specific service, or a specific group of dually eligible beneficiaries.
The state can choose to pay cost-sharing at the Medicaid state plan rate, or the Medicare rate,
whichever is less. Since the state isn’t paying consistently at either the Medicare rate or the
Medicaid state plan rate, CMS views this as a negotiated rate.
For Medicare services that are also covered in the Medicaid state plan, for non-Medicare-
eligible Medicaid beneficiaries, the state may pay at a negotiated rate that is more than the
Medicaid state plan rate but less than the Medicare rate.
For Medicare services that are not covered in the Medicaid state plan, for non-Medicare-
eligible Medicaid beneficiaries, the state has greater flexibility in setting the negotiated rate,
but the rate must be sufficient for the state to assure CMS that it will not adversely affect
access to care for the beneficiary.
The state has the option to establish a different payment method for each group of dually
eligible beneficiaries (QMB, QMB Plus, SLMB Plus, and other Full Benefit Dual Eligible
beneficiaries) and can establish different payment methods for Part A deductible, Part A
coinsurance, Part B deductible, or Part B coinsurance within each group. The state may mix all
of the optional payment methods as it chooses, as long as the state can assure CMS that the
selected payment methods will not adversely affect access to care for the beneficiary.
5. Medicaid Coverage for Medicare Advantage Plans
(Medicare Part C) Enrollees
Medicaid may also provide coverage of premiums and cost-sharing for certain
categories of dually eligible beneficiaries who elect to enroll in a Part C plan to receive
their Part A and Part B coverage through a Medicare managed care plan. The extent of
45
Medicaid coverage for Part C costs depends on the enrollee’s coverage category, the
type of cost-sharing, and what the SMA opts to cover in its state plan.
See the chart below for an overview of when Medicaid may pay for costs associated
with Medicare Part C.
Medicaid Payment for Costs Associated with Medicare Part C
Category
Part C Premium
for Part A and
Part B benefits
plus Mandatory
Supplemental
Benefits
Part C Premium
for Optional
Supplemental
Benefits
Medicare
Deductible,
Coinsurance, and
Copayment
(except Part D)
QMB Only
Optional
Not allowed
Required
QMB Plus
Optional
Optional
Required
SLMB Only
Not allowed
Not allowed
Not allowed
SLMB Plus
Not allowed
Optional
Conditional*
QI
Not allowed
Not allowed
Not allowed
QDWI
Not allowed
Not allowed
Not allowed
FBDE
Not allowed
Optional
Conditional
* SMAs do not generally opt to cover Medicare cost-sharing for Medicare-only services
for individuals in the SLMB Plus category. They are, however, liable for a portion of the
cost-sharing if the following conditions are met: (1) the Medicare service is also covered
under the state plan, (2) the Medicare provider is also enrolled as a Medicaid provider,
and (3) the state plan rate exceeds the Medicare payment amount. In these
circumstances, the SMA must pay the provider up to the amount for the service
specified in the state plan.
Required: Coverage of Medicare deductibles and coinsurance are required for QMBs
under Section 1902(a)(10)(E)(i) and Section 1905(p)(3) of the Act.
Optional: The SMA may limit Medicaid payment as specified in Supplement 1 to
Attachment 4.19-B of the state plan, including nominal cost-sharing amounts as
permitted under Section 1916 of the Act and specified in attachment 4.18 of the state
plan. These payment limitations may result in a Medicaid payment of zero.
Additionally, Section 1905(a) of the Act permits payment of health insurance
premiums, other that Medicare Part B, for coverage of medical or remedial services,
except for individuals who could be enrolled in Part B but are not. SMAs may elect this
option in their state plan.
46
Conditional: For a non-QMB eligible, there is no Medicaid liability for cost-sharing in a
Medicare Advantage plan, however, SMAs are liable for payment for Medicaid-covered
services rendered by Medicaid providers to Medicaid eligible individuals in excess of any
third party liability (including Medicare Part C). When the following conditions are met,
there may be a liability for a specific service received through a Medicare Advantage
plan:
The Medicare service is also a covered service under the state plan:
The Medicare provider is also a Medicaid provider; and
The amount specified in the state plan is greater than the Medicare payment
amount.
6. Medicaid Payment Methodologies for Medicare Cost-
Sharing
a. Medicaid is Payer of Last Resort
Generally, SMAs may not pay claims if it is likely that a third party (such as Medicare) is
liable for the claim.
For dually eligible beneficiaries, Medicare is generally liable for claims, and thus SMAs
are required to cost-avoid claims for dually eligible beneficiaries. Some Medicaid
benefits, however, are not covered by Medicare, meaning that Medicare has no legal
obligation to pay for the service. Accordingly, SMAs are not required to cost-avoid
claims for services provided to dually eligible beneficiaries that are only covered by
Medicaid.
b. Coverage of Medicare Cost-Sharing Through “Crossover Claims”
For QMBs, QMB Plus, (and FBDEs and SLMB Plus for services as specified in the state
plan), SMAs will cover cost-sharing under Part A and Part B (or similar cost-sharing
applied under Part C). SMAs may not cover any cost-sharing for Part D.
36
Claims for cost-sharing submitted by providers to Medicare usually crossover from
Medicare to the SMAs, after Medicare has made the primary payment. These claims are
referred to as “crossover claims.”
36
Social Security Act § 1935(d).
47
Under the Act, SMAs must reimburse providers for QMB (including QMB Plus) cost-
sharing amounts, even if the cost-sharing is for benefits not otherwise covered under
the state plan.
37
For those FBDEs, and SLMB Plus, SMAs have the option to cover cost-
sharing for all Medicare-covered services or only for Medicaid-covered services.
SMAs may pay Medicare cost-sharing at the Medicare rate, the state plan rate, or a
negotiated rate proposed by the SMA and approved by CMS. The provider’s total
payment for a service includes the Medicare payment, the Medicaid cost-sharing
payment, plus any beneficiary responsibility for Medicaid-level cost-sharing. If a QMB
or QMB Plus beneficiary receives a Medicare-covered service that is not covered under
the state plan, the SMA must still pay for cost-sharing, but the SMA may establish
reasonable payment limits (i.e., a negotiated rate), approved by CMS, for the service.
Cost-Sharing Coverage and Payment Amounts for Medicare/Medicaid-Covered and
Medicare-Only Covered Services
Service Covered by Medicare
and Medicaid
Service Only Covered by Medicare
Cost-Sharing
Covered
Required for QMBs, QMB Plus,
SLMB Plus and FBDEs
Required for QMBs and QMB Plus;
optional for FBDEs and SLMB Plus
Payment Amount
Total payment may be capped at
the SMA’s choice of:
State plan rate
Medicare rate
Some amount in between
Medicaid and Medicare rates
(i.e., a negotiated rate), as
approved by CMS
Total payment capped at the SMA’s
choice of
“Reasonable limit” (i.e.,
negotiated rate) approved by
CMS
Medicare rate
Often, when SMAs elect to cap total payments at the state plan rate, that rate is lower
than the Medicare rate. SMAs that elect this option would pay a Medicare claim at the
state plan rate. In some cases the SMA will make no payment, if the amount paid by
Medicare exceeds the state plan rate. Regardless of whether the SMA makes a cost-
sharing payment to the provider, the SMA must issue a Remittance Advice to the
provider noting the amount of the Medicare cost-sharing paid (or not paid) by the SMA.
This is especially important for Medicare Part A providers, who need that
37
Social Security Act § 1902(a)(10)(E); see Social Security Act § 1905(p)(1) for the definition of qualified Medicare
beneficiary.
48
documentation to request coverage of bad debt from Medicare for services for which
the SMA pays less than the full Medicare cost-sharing amount.
c. Coverage of Medicare Cost-Sharing in Part C
For beneficiaries enrolled in Part C plans entitled to Medicaid payment of cost-sharing,
SMAs may make capitated payments to Medicare Advantage plans to cover the
enrollee’s cost-sharing. SMAs must outline in their state plans a methodology for
calculating the capitation payments, and that methodology must be consistent with the
cost-sharing levels for dually eligible beneficiaries outlined in the state plan.
Medicare Advantage plans, however, are not required to accept these capitation
payments.
In this case, SMAs will still cover Part C cost-sharing for QMBs and FBDEs, but the
providers must submit claims directly to the SMA. Unlike in Part A and Part B, Medicare
Advantage claims do not automatically crossover to Medicaid, once Medicare has made
the initial payment. Providers, therefore, must submit a claim for the balance directly to
the SMA, including information on the amount paid by the Medicare Advantage plan.
Some providers may be unwilling or unable to bill Medicaid directly. Since providers are
prohibited under their contracts with Medicare Advantage plans from billing QMBs for
cost-sharing (see below), providers who are unable to bill Medicaid will be deprived of
the amounts due to them for cost-sharing. Because of these challenges, many Medicare
Advantage plans will elect to accept capitated payments from the SMA to cover
Medicare cost-sharing.
d. Prohibition on Provider Balance Billing of QMB Beneficiaries
The actual payment made to a provider by the SMA plus the beneficiary’s Medicaid level
co-payments (if any) is considered payment in full for the Medicare deductibles and
coinsurance. Providers are strictly prohibited from seeking to collect any additional
amount from a QMB for Medicare deductibles or coinsurance (other than Medicaid
nominal level cost-sharing), even if the SMA’s payment is less than the total amount of
the Medicare deductibles and coinsurance.
38
Because of this prohibition on billing a
QMB, the provider may receive less total payment for services rendered to QMBs than
to other Medicare beneficiaries.
To ensure that QMBs are not billed for Medicare Part A and/or Medicare Part B cost-
sharing, SMAs must ensure that their systems can pay all crossover claims. Additionally,
SMAs must be able to transmit a RA to the provider explaining the extent of the SMA’s
38
Social Security Act § 1902(n)(3).
49
liability or why the SMA is not liable. Occasionally, SMAs report crossover claims
payment challenges related to the following:
The Medicare-certified provider submitting the claim does not participate in the
state’s Medicaid program;
The SMA’s system does not recognize the provider identifier;
The service is covered by Medicare, but not Medicaid;
The provider type is recognized by Medicare, but not Medicaid; or
The service is provided by an out-of-state provider.
Although each of these situations presents systems challenges, SMAs must create
processes to enable payment of the crossover claims in a timely manner. This may
include setting up a process to enable Medicare-certified providers to enroll in Medicaid
for the limited purpose of billing for Medicare cost-sharing amounts. Although SMAs
may set up a streamlined enrollment process for providers seeking to enroll for the
limited purpose of billing for Medicare cost-sharing amounts, the SMA must still follow
the Medicaid/CHIP provider screening and enrollment rules.
39
e. Medicare Timely Claims Filing Rules and Exceptions
Finally, SMAs only need to pay crossover claims that were submitted to Medicare within
Medicare’s timely filing period. Under Medicare rules, fee-for-service claims must be
submitted no more than twelve months (one calendar year) after the date services were
furnished.
40
Medicare regulations allow for the following exceptions to the one-year
time period for filing claims
41
:
Administrative Error. If the failure to meet the filing deadline was caused by
error or misrepresentation of a DHHS employee, Medicare contractor, or agent.
Retroactive Medicare Entitlement. If the beneficiary receives notification of
Medicare entitlement retroactive to or before the date the service was
furnished.
Retroactive Medicare Entitlement Involving SMAs. If the beneficiary receives
notification of Medicare entitlement retroactive to or before the date the service
was furnished and the SMA recoups payment from a provider six months or
more after the date the service was furnished. The provider may submit a claim
to Medicare within six months after the SMA recoups its payment.
39
Social Security Act § 1902(a)(77) and (kk).
40
Social Security Act §§ 1814(a)(1), 1835(a)(1), and 1842(b)(3)(B); 42 C.F.R. § 424.44
41
42 CFR § 424.44(b).
50
Retroactive Disenrollment from a Medicare Advantage Plan or Program of All-
inclusive Care for the Elderly (PACE). If a beneficiary was enrolled in a Medicare
Advantage plan or PACE organization but was later disenrolled from that plan or
organization retroactive to or before the date the service was furnished. The
Medicare Advantage plan or PACE organization must also recoup its payment
from the provider six months or more after the date the service was furnished.
Note that Medicare Advantage plans may establish their own timely filing limit, which
may be less the 12 months timely filing limit in Medicare fee for service.
f. Special Considerations: Durable Medical Equipment, Prosthetics, Orthotics, and
Supplies (DMEPOS) for Certain Dually Eligible Beneficiaries
Medicaid coverage for DMEPOS for dually eligible beneficiaries is described in the table
below:
Medicaid Coverage for DMEPOS for Dually Eligible Beneficiaries
Category
Medicaid Coverage for DMEPOS
QMB Only
Medicaid pays Medicare cost-sharing amounts only.
If Medicare denies payment for the service, Medicaid will not pay.
1. Medicaid pays Medicare cost-sharing amounts for Medicare-
covered DMEPOS.
QMB Plus
2. If Medicare does not cover the service, but the state plan covers
the service, the SMA will pay for the DMEPOS (subject to limitations in
the state plan) when the beneficiary obtains the item or service from a
Medicaid-participating provider.
SLMB Only
Medicaid does
premiums.
not pay Medicare cost-sharing amounts, except Part B
SLMB Plus
1. Medicaid pays Medicare cost-sharing amounts for services as
specified in the state plan.
2. If Medicare does not cover the service, but the state plan covers
the service, the SMA will pay for the DMEPOS (subject to limitations in
the state plan) when the beneficiary obtains the item or service from a
Medicaid-participating provider.
FBDE
1. Medicaid pays Medicare cost-sharing amounts for services as
specified in the state plan.
2. If Medicare does not cover the service, but the state plan covers
the service, the SMA will pay for the DMEPOS (subject to limitations in
the state plan) when the beneficiary obtains the item or service from a
Medicaid-participating provider.
51
g. Special Considerations: Skilled Nursing Facility Services
Although Medicaid provides more robust coverage for skilled nursing facility services
than Medicare, Medicare does provide some coverage of these services. SMAs,
therefore, should cost-avoid claims for skilled nursing facility services when the
beneficiary’s cost of care is fully covered by Medicare. When the beneficiary’s full-pay
Medicare coverage is exhausted, Medicare may cover additional days at the Medicare
coinsurance rate. The SMA will pay Medicare cost-sharing for the coinsurance;
however, if the dually eligible beneficiary is subject to post-eligibility treatment of
income rules, he/she may be responsible for payment of a portion of the cost.
If the claim is for a skilled nursing facility that is participating in Medicaid but not
Medicare, Medicare has no legal obligation to cover the claim. Since Medicare has no
legal obligation to cover the claim, the SMA is not required to cost-avoid that claim. If
the beneficiary could have received services at a Medicare-certified skilled nursing
facility without additional cost to the beneficiary, then the SMA may deny or reduce
payment for the service to take into account the resource, (i.e., Medicare), that was
available at no cost to the beneficiary, since the SMA would pay for cost-sharing
associated with the service.
h. Special Considerations: Pharmacy Retroactive Part D Claims
SMAs may not pay cost-sharing for Medicare Part D claims. However, a beneficiary may
have received Medicaid payment for pharmacy services before he/she was determined
eligible for Medicare Part D. If the eligibility date for Medicare Part D coverage is
retroactive to or before the date of pharmacy service for which the SMA paid, then the
SMA can recover the money through the Medicaid Pharmacy Subrogation process. The
process requires the SMA to file a claim with CMS’s contractor who operates the Low
Income Newly Eligible Transition (LINET) demonstration program for limited income
Medicare beneficiaries. The SMA bills the contractor electronically, using a National
Council for Prescription Drug Programs (NCPDP) form. With subrogation, there are no
billing time limitations or preauthorization issues.
42
7. Medicare Bad Debt Provider Enrollment
The state may require Medicare-certified providers to execute a Medicaid provider
agreement and enroll in the state’s Medicaid program in order to submit claims for
reimbursement of QMB cost-sharing. This is true for all provider types, even those that
42
45 CFR § 162.1901 and § 162.1902.
52
do not provide services under the Medicaid state plan (e.g. Long Term Acute Care
Hospitals). CMS encourages states to have a mechanism to ensure that providers who
enroll only for the sole purpose of Medicare cost-sharing are not included on lists of
other providers identified as a
vaila
ble to serve Medicaid only beneficiaries.
Alternatively, states may utilize a simplified, limit
ed enrollment process for Medicare
providers seeking to enroll in Medicaid for the sole purpose of claiming Medicare cost-
sharing reimbursement while in compliance with provider screening and enrollment
requirements. As noted above, regardless of the specific enrollment mechanism chosen,
states must enable all Medicare enrolled providers, including those who are out of state,
some mechanism by which they can get the state to process their Medicare cost-sharing
claims, including claims for QMB cost-sharing.
References
Statutes & Regulations
Social Security Act § 1814(a)(1).
Social Security Act § 1835(a)(1).
Social Security Act § 1842(b)(3)(B).
Social Security Act § 1902(a)(10)(E).
Social Security Act § 1902(a)(77) and (kk).
Social Security Act § 1902(n)(3).
Social Security Act § 1905(p)(1).
Social Security Act § 1935(d).
Time Limits for Filing Medicare Claims. 42 CFR § 424.44
Payments for Services Furnished Out of State. 42 CFR § 431.52.
Pharmacy Subrogation. 45 CFR § 162.1901 and § 162.1902
Center for Program Integrity – https://www.medicaid.gov/
53
F. Managed Care
1. General Requirements
COB/TPL requirements apply in Medicaid MCOs, as well as Medicaid fee-for-service
programs. SMAs have four options for ensuring that they meet the COB/TPL
requirements in Medicaid MCOs. Specifically, states may:
Exclude individuals with known sources of TPL from enrollment in MCOs;
Enroll individuals with known sources of TPL in MCOs, with the SMA retaining
responsibility for COB/TPL;
Enroll individuals with known sources of TPL in MCOs and contractually require
that the MCO assume responsibility for COB/TPL; or,
Exclude individuals with commercial managed care coverage from enrollment in
MCOs, but enroll individuals with other types of third party coverage in the
MCOs.
SMAs can also divide responsibility for COB/TPL functions between the SMA and the
MCO. For example, the MCO could be responsible for COB/TPL for other forms of
health insurance coverage, while the SMA retains responsibility for casualty/tort, liens,
and estate recovery. Regardless of how SMAs choose to allocate responsibility for
COB/TPL activities, the contract between the SMA and the MCO must list any COB/TPL
responsibilities of the plan.
43
If an SMA delegates responsibility for COB/TPL to an MCO, the capitation rates should
be reduced by an amount actuarially equivalent to the expected amount the plan will
recover in COB/TPL. To ensure that future adjustments for COB/TPL recoveries are
accurate, SMAs must require that MCOs report any COB/TPL savings or recoveries.
If an SMA delegates responsibility for coverage of Medicare cost-sharing for an MCO’s
dually eligible enrollees, please see additional requirements in 42 CFR 438.3(t).
See subsection 3, below, for additional guidance about SMAs’ delegation of
responsibility to MCOs.
2. COB/TPL Activities by MCOs
The same general rules that apply for COB/TPL activities in Medicaid fee-for-service
apply in Medicaid managed care. For example, MCOs are required to pay certain types
43
42 CFR § 438.6.
54
of claims and then seek recovery—“pay and chase”—in the same circumstances as the
SMA is required to do so.
When a MCO seeks to recover from a third party, it has several options for how to
determine what to recover from the liable third party. Specifically, the MCO can seek to
recover:
The Medicaid fee schedule amount for the service furnished;
The full amount the insurer is legally liable to pay for the service;
The amount the MCO allows for the service;
The amount the provider bills for the service; or,
The monthly capitation payment for the service.
The exact amount sought will be determined based on the MCO’s contract with the SMA
and state law. Any amount recovered in excess of the MCO’s cost of providing the care
should be provided to the beneficiary.
If the MCO has entered into an arrangement with a provider under which the MCO pays
the provider a fixed amount for each patient, regardless of the services used (referred
to as a “sub-capitation payment”), the MCO should not limit third party recovery to the
amount of the sub-capitation payment to that provider. Instead, either the provider or
the MCO must seek recovery for the actual cost of the services rendered.
3. Other Managed Care Issues
If a Medicaid managed Care beneficiary’s third party coverage is provided by a
commercial payer, the SMA must stipulate in their contracts with managed care plans
that, unless required by statute or regulation to cover services from providers outside of
their network, managed care plans cannot pay claims for services that the Medicaid
managed care beneficiary received from a provider who was not in the commercial
plan’s network and the commercial payer denied the claim solely for that reason.
Under the Act, Medicaid beneficiaries are required to use third party sources of
coverage that are available to them at no cost. By seeing an out-of-network provider,
the Medicaid beneficiary was not using his or her available health care resources.
Consistent with the general principle that Medicaid is the payer of last resort, Medicaid
will not reimburse the provider or the beneficiary for any balance not paid by the
commercial plan.
Additionally, SMAs may delegate responsibility and authority to the MCOs to perform
third party discovery and recovery activities, including data matches as required by the
DRA of 2005. The SMA may authorize the MCO to use a contractor to complete these
activities.
55
When TPL responsibilities are delegated to an MCO, third parties are required to treat
the MCO as if it were the SMA, including:
Providing access to third party eligibility and claims data to identify individuals
with third party coverage;
Adhering to the assignment from the SMA to the MCO of a Medicaid
beneficiary’s right to payment by such insurers for health care items or services;
and
Refraining from denying payment of claims submitted by the MCO for
procedural reasons.
Third parties may request verification from the SMA that the MCO or its contractor is
working on it
s behalf, and the scope of the delegated work.
Detailed questions related to Medicaid Managed Care requirements should be directed
to the Division of Managed Care Programs (DMCP), Disabled Elderly Health Programs
Group (DEHPG).
References
Statutes & Regulations
Contracts Requirements. 42 CFR § 438.6.
56
G. Data and Systems
This chapter discusses data and systems that support the COB/TPL activities undertaken
by SMAs. It is not intended to address the many non-COB/TPL-related functions
performed by a state’s Medicaid eligibility determination system or its MMIS.
1. State Systems
To maximize TPL savings through cost-avoiding claims payments for insured Medicaid
beneficiaries (to the limit of their health insurer’s liability) and recovering for Medicaid
paid claims from liable third parties, SMAs have automated pursuing TPL to the greatest
extent possible. All state systems, including the state’s Medicaid eligibility system and
MMIS, should include features that enable the SMA to comply with federal regulations
governing COB/TPL.
2. State Medicaid Eligibility Determination Systems
An SMA’s Medicaid eligibility determination system should be able to:
Identify Medicaid beneficiaries with third party resources.
Provide basic information on the nature of the third party resource (health
insurance or other).
Report information on eligible beneficiaries and third party resources to MMIS,
to support creating a beneficiary file for claims processing.
3. State MMIS
An SMA’s MMIS must be able to perform, among other things, the following functions:
Receive beneficiary information from the state’s Medicaid eligibility
determination system and create a record on the beneficiary file, including some
third party resource information.
Store and retrieve TPL information on services covered, policy period, and
insurance company for each beneficiary.
Edit claims to flag probable TPL and cost-avoid claims, where appropriate.
Override cost avoidance edits for claims that were billed to and denied by the
third party resource.
Associate resubmitted claims with the original denied claim.
Process Medicare crossover claims, including QMB cost-sharing, for adjudication
of Medicaid cost-sharing amounts, including deductibles and coinsurance for
57
Medicare services, and to furnish the provider with an RA that explains the
state’s liability or lack thereof.
Account for TPL payments to the provider in determining the amount of
Medicaid payment still due the provider (if any).
Identify claims with trauma diagnosis codes and report them to the TPL
subsystem of MMIS, to support development of casualty/tort recovery cases.
Screen any verified TPL resource against a paid claims history going back at least
one year to identify recoverable funds.
Accumulate claims up to a specified threshold amount.
Track and report cost avoidance dollars.
Associate recoveries back to individual claims.
Automate recovery activities by maintaining a TPL subsystem of MMIS,
containing identification and status information on beneficiaries with active or
closed third party recovery cases, including casualty/tort, liens, and estate
recovery claims.
Automate data matches with health insurers, Motor Vehicle Administration, and
Worker’s Compensation Commission, to identify third party resources.
Support health insurer data matching through use of the Payer Initiated
Eligibility/Benefit (PIE) Transaction or similar information-exchange tools.
58
Chapter III: Liens and Recovery TPL
A. Liens
1. Description of Liens
Liens are rights to property that are given to secure a debt. Liens are filed with or
referenced on the title to the property to notify the property owner and any potential
buyers that there is an encumbrance on the property. When property subject to a lien
is sold, the lien must be satisfied (paid) before title can transfer to the new owner.
In Medicaid, liens are used to enable SMAs to recover assets from beneficiaries under
certain circumstances. SMAs may only file liens during the lifetime of the Medicaid
beneficiary and when certain other conditions are met (see “When Liens are Permitted,”
below).
Placing a lien does not transfer assets from the beneficiary to the state Medicaid
program; instead, it gives an SMA the right to recover up to the amount of Medicaid
expenditures from particular assets at some later date, which may be during the
Medicaid beneficiary’s lifetime, or from his estate after the Medicaid beneficiary has
died.
Note that, for Medicaid’s purposes, liens differ from estate claims, which are sometimes
referred to as liens. Medicaid estate recovery claims are discussed in Section B, below.
2. When Liens Are Permitted
SMAs generally may not place liens on the property of Medicaid beneficiaries.
44
Despite
this general rule, SMAs may place liens prior to the beneficiary’s death in the following
circumstances:
Judgment that Benefits Were Incorrectly Paid. If a court determines that
benefits were incorrectly paid, the SMA may place a lien on the individual’s
property. For example, if a court finds that an individual fraudulently obtained
Medicaid coverage, a lien may be placed on that person’s property prior to the
beneficiary’s death.
45
44
Social Security Act § 1917(a).
45
Social Security Act § 1917(a)(1)(A)(i)
59
Liens on Real Property of Permanent Residents of Institutions. SMAs may place
a lien on an individual’s land or home (referred to as “real property”) if the
individual is (1) a permanent resident of an institution; (2) required, as a
condition of receiving services in a medical institution under the state plan, to
spend all, but a minimal amount of his income (reserved for personal needs) for
costs of medical care; and (3) determined by the SMA that he cannot reasonably
be expected to be discharged and returned home.
46
For the purposes of these
liens, an institution includes a nursing facility, Intermediate Care
Facility/Individuals with Intellectual Disabilities (ICF/IID), or another type of
medical institution.
This type of lien was authorized under the Tax Equity and Fiscal Responsibility
Act of 1982 (TEFRA), and is often referred to as a TEFRA lien. TEFRA liens are
restricted in certain circumstances, as discussed in more detail in subsection 3,
below. Note that SMAs are not required to use TEFRA liens.
If a pre-death lien is permitted, a lien may be placed on any property that counts as an
available resource when determining whether an individual is eligible for Medicaid.
Liens may therefore, be placed on assets that are held in revocable trusts.
3. Restrictions on Placing Liens
SMAs may not place TEFRA liens on an individual’s home if one of the following
individuals resides in the home:
The beneficiary’s spouse,
The beneficiary’s child, if that child is (1) under age 21, (2) blind, or (3) disabled,
or
The beneficiary’s sibling, if the sibling has an equity interest in the home and was
residing in the home for at least one year before the beneficiary was admitted to
the institution.
47
Individuals whose eligibility is determined using Modified Adjusted Gross Income
(MAGI) may not be subject to TEFRA liens.
4. Termination of Liens
TEFRA liens on real property must be dissolved (i.e., terminated without collection and
removed from the official state property records) if the beneficiary is discharged from
46
Social Security Act § 1917(a)(1)-(2).
47
Social Security Act § 1917(a)(1)-(2).
60
an institution and returns to the home, since the lien is only permitted because the
beneficiary was a permanent resident of the institution.
4849
48
Effective February 9, 2018, Congress enacted the Bipartisan Budget Act of 2018 (BBA), P.L. 115-123, repealing
the SMAs ability to place liens against property for the collection of excess or improper Medicaid assistance
payments made on behalf of an individual who should not have received them in the case of a court judgment and
the state’s right to third party payment recoupment
49
Social Security Act § 1917(a)(3).
References
Statutes & Regulations
Social Security Act § 1917(a)
61
B. Estates
SMAs are required to attempt to recover Medicaid payments from the estate of a
deceased Medicaid beneficiary, for certain services received on or after, the beneficiary
attained age 55. This process is referred to as “estate recovery,” and it is explained in
further detail below.
1. General Overview of Estate Recovery
Estate recovery is permitted or required in the following circumstances:
If the deceased beneficiary was subject to a lien on real property, the SMA must
recover.
50
If the SMA paid claims for the
beneficiary at age 55 or over, it
must recover from the
individual’s estate the costs of
nursing facility services, home
and community-based services,
and related hospital and
prescription drug services.
SMAs may opt to collect costs
associated with any other state
plan services, except Medicare
cost-sharing amounts paid for
Medicare Savings Program
(MSP) beneficiaries for services
on, or after January 1, 2010.
51
If the beneficiary received
benefits under long-term care
insurance, and assets or
resources were disregarded in
determining the eligibility of the
beneficiary, the SMA must
50
Social Security Act § 1917(b)(1)(A). Note: the statute says the state must recover from the estate, but the
regulation say the state may recover. See 42 CFR § 433.36. Statutory language governs.
51
Social Security Act § 1917(b)(1)(B). Note: Statute says 55, regulations say 65. See 42 CFR § 433.36. Statutory
language governs.
Estate Recovery for the New Adult Group
Established by the Affordable Care Act
Most individuals age 55 or over receiving
Medicaid will be eligible for coverage based on
their age or a disability, but some of these
individuals will be eligible for Medicaid under the
new eligibility group created by the Affordable
Care Act (referred to as the “new adult group” or
MAGI individuals). The estate recovery rules
related to claims paid after the individual
reaches age 55 apply to individuals in the new
adult group. CMS has advised SMAs that they
may use existing statutory authorities to limit the
scope of estate recovery. For example, SMAs can
limit recovery based on eligibility group, such as
limiting estate recovery for the new adult group
to recovery for nursing facility services, home
and community based services, and related
hospital and prescription drug services. See State
Medicaid Directors’ Letter 14-001 for additional
details.
62
recover from the individual’s estate costs associated with skilled nursing facility and
other long-term care services, except that SMAs participating in the Long-Term Care
Partnership Program are permitted to exclude from estate recovery assets equal to
the amount of benefits paid out by the insurance policy.
52
This is the same amount
that was disregarded in the eligibility determination.
Disregard of assets from estate recovery because of the Long-Term Care Partnership
Program provisions above is linked with the disregard of assets for eligibility
purposes. This disregard is not applicable to MAGI individuals, because assets are
not counted for purposes of determining their eligibility for Medicaid.
Benefits paid by a Long-Term Care Partnership Program policy are treated as third
party resources.
2. What Services Must or May be Included in an Estate
Recovery Claim
SMAs are required to recover the cost of certain services provided to individuals age 55
or over, and they may recover the cost of other services:
The SMA must recover from the individual’s estate the costs of nursing facility
services, home and community-based services, and related hospital and
prescription drug services provided to individuals age 55 or over.
The SMA may opt to collect costs associated with any other state plan services,
except Medicare cost-sharing paid for MSP beneficiaries for services on or after
January 1, 2010.
53
The SMA must also recover at least a portion of any managed care capitation
payments, if the MCO covers services subject to estate recovery. If the SMA
elects to recover the costs of all state plan services, then it must recover from
the beneficiary’s estate the total capitation payment even if the MCO provides
no services to the Medicaid beneficiary. If, instead, the SMA elects to recover the
costs of some, but not all, state plan services, it must recover from the
beneficiary’s estate the portion of the capitation payment that is attributable to
the recoverable state plan services even if the MCO provides no services to the
Medicaid beneficiary. SMAs will need to work with an actuary to determine how
much of the capitation payment is attributable to services subject to recovery.
52
Social Security Act § 1917(b)(1)(C).
53
Social Security Act § 1917(b)(1)(B). Note: Statute says 55, regulations say 65. See 42 CFR § 433.36. Statutory
language governs.
63
3. When Recovery is Permitted
After a SMA determines that a deceased beneficiary may be subject to estate recovery,
it may only make recoveries from the beneficiary’s estate under the following
circumstances:
After the death of the surviving spouse (regardless of where the spouse lives).
54
When the deceased beneficiary does not have a child who is under age 21 or
blind or disabled, regardless of where the child lives.
55
If recovering based on a lien on the home of a deceased beneficiary who resided
in an institution, in addition to the prohibitions above, the SMA may not recover
if:
56
o A sibling resides in the house, if the sibling lived there at least one year
prior to the beneficiary’s admission to the institution; or
o A son or daughter resides in the house, if the son or daughter (1) has
resided in the house for at least two years immediately prior to the
beneficiary’s admission to the medical institution, and can establish that he
or she provided care that delayed admission to an institution; and, (2) is
lawfully residing there and has lawfully resided there continuously since the
deceased beneficiary’s date of admission to the medical institution.
When recovery would not create an undue hardship for survivors
57
SMA’s undue hardship policy must be set out in its state plan;
The state plan need only specify the criteria for waiver of estate recovery claims
due to undue hardship;
SMAs have discretion in defining what constitutes an undue hardship. At the
state’s discretion, this may include establishing reasonable protections
applicable to the same-sex spouse or domestic partner of a deceased Medicaid
recipient.
Some common situations that may cause undue hardship if the SMAs enforced the
Medicaid estate recovery claim include:
54
Social Security Act § 1917(b)(2)(A).
55
Social Security Act § 1917(b)(2)(A).
56
Social Security Act § 1917(b)(2)(B).
57
Social Security Act § 1917(b)(3).
64
The estate claim would remove the sole income-producing asset of survivors,
and the asset produces only limited income;
The home is of modest value, which is roughly half the average home value in
the county; or
Other compelling circumstances, such as that, without the receipt of the
estate proceeds, the survivor would become eligible for public or medical
assistance or recovering the assets would deprive the survivor of necessities
such as food and shelter.
4. What Assets May Be Recovered
The SMAs recover from the beneficiary’s estate. SMAs must define the estate to include,
at the least, the beneficiary’s probate estate (the estate that passes through a
beneficiary’s last will and testament). The probate estate will be defined under the
state’s probate code and will vary somewhat across states.
SMAs may define the estate to include the broader, non-probate estate. Assets in the
non-probate estate include assets that pass automatically to another person, for
example, a joint checking account or jointly held property. Assets that pass
automatically by contract, such as life insurance policies or annuities, also would be part
of the non-probate estate.
Certain types of financial arrangements present unique challenges for SMAs seeking to
recover from estates.
Annuities. Annuities are generally not part of the probate estate (though state
laws may vary). SMAs that define estate as the beneficiary’s probate estate,
therefore, will not recover from amounts paid to the decedents’ beneficiaries
under annuities. The expanded definition of estate under the Act, however,
includes “other arrangements.”
58
The term “other arrangements” would include
annuities, and thus, in SMAs using the expanded definition of estate, the SMA
would recover from amounts paid under an annuity.
Life Estates. Under a life estate, an individual who owns property transfers
ownership of that property to another individual while retaining for the rest of
his or her life (or the life of another person) certain rights to the property. In
general, a life estate, entitles the owner of the life estate to possess, use, and to
obtain profits from the life estate as long as he or she lives. Actual ownership of
the property transfers to another person, the owner. After the individual dies,
the property passes to the owner. For example, an individual could deed a house
to someone, but retain a life estate interest that would allow him/her to live
58
Social Security Act § 1917(b)(4)(B).
65
there until death. Under common law, that individual has no interest at the time
of death, since the life estate ceases to exist when the individual dies and the full
rights to the property transfers to the owner.
Although common law holds that an individual does not have an interest in a life
estate after he or she dies, the expanded definition of estate under federal
Medicaid law does include life estates. As a result, if a SMA has elected to use
the expanded definition of estate, the life estate in which a Medicaid enrollee
has an interest at the time of death is subject to estate recovery.
5. What Assets May NOT Be Recovered
The SMA may not recover from the estate of a deceased beneficiary the following
assets, including:
Certain Income, resources, and property of American Indians/Alaska
Natives, such as:
o Property, including land and buildings, located on a reservation or near a
reservation or within the most recent boundaries of a prior federal
reservation, as designated by the Bureau of Indian Affairs and the U.S.
Department of the Interior, so long as the property is passing from an
Indian to one or more relatives (including non-Indian relatives), to a tribe,
or to one or more Indians;
o Income received from an estate where the income derived from property
that could not be recovered, so long as the individual can clearly trace
the income back to the protected property;
59
o Ownership interests in rents, leases, royalties, or usage rights related to
natural resources, including the right to fish, hunt, or harvest timber, as
well as income derived from these sources that is collected by an Indian
or a tribe and distributed to Indians; or
o Ownership interests in or usage rights that have unique religious,
spiritual; traditional; or cultural significance or rights that support a
subsistence or traditional lifestyle.
• Government Reparation Payments made to survivors of Nazi persecution. The
reparation payment itself is exempt, as are items purchased with the payment
that are not considered to be assets, such as food and clothing. However, once
59
Social Security Act § 1917(b)(3)(B).
66
the payment is used to acquire an asset that would otherwise be subject to
estate recovery, then the reparation payment no longer exists and there is no
exemption of the asset based on the source of the purchasing funds as a
reparation payment.
60
60
See H.R. 1873, § I.a., January 25, 1994.
References
Statutes & Regulations
42 CFR § 433.36
Social Security Act § 1917(b).
H.R. 1873, § I.a., January 25, 1994.
67
C. Casualty/Tort Recovery
1. General Overview of Casualty/Tort Recovery
A Medicaid beneficiary may need medical items or services because of injury caused by
the action, inaction, or negligence of a third party. Such situations include vehicular and
other accidents, injury caused by a defective product (product liability), job-related
injury, and medical malpractice. All these situations are referred to as casualty/tort
cases. In this situation, the injury creates a cause of action for the injured party, who
may make a claim for compensation for medical and other losses incurred because of
the injury. Claims in these cases may be settled with or without court action.
SMAs must recover from out-of-court settlements or court judgments (awards) that
include compensation for medical expenses, since a third party is liable for the cost of
medical care provided to beneficiaries that is necessitated by the cause of action. SMAs
are required to recover, if possible, the full amount spent on a beneficiary’s
casualty/tort-related medical care.
2. Ahlborn Limitations on Settlement Funds Subject to
Recovery
Settlements and awards often contain more than just payment for the cost of medical
care, such as payment for pain and suffering or lost wages. A state is limited to
recovering its Medicaid expenditures from the portion of the settlement, judgment or
award designated for medical expenses. Arkansas Department of Health and Human
Services v. Ahlborn, 547 U.S. 268 (2006).
In Ahlborn, the Supreme Court of the United States held that the federal Medicaid
statute only allows recovery for medical assistance from the portion of a liability
settlement attributed to medical items and services. To the extent that the Arkansas
state statute provided for filing a lien for full recovery of medical assistance payments,
the Court found it conflicted with the Medicaid anti-lien laws found at section
1917(a)(1) of the Act. This section prohibits the state from imposing liens against any
individual prior to his/her death on account of medical assistance paid on his/her behalf,
with limited exceptions specified in the statute.
61
61
In 2018, Congress enacted the Bipartisan Budget Act of 2018 (BBA), as P.L. 115-123, which repealed the existing amendment
(Bipartisan Budget Act of 2013) giving states the authority to recover from the full settlement amount. Settlements and awards
often contain more than just payment for the cost of medical care, such as payment for pain and suffering or lost wages.
Nevertheless, the current law is SMAs are required to recover funds only from the portion of a beneficiary’s settlement or judgment
intended to cover medical items or services.
68
3. SMAs’ Ability to Reduce Total Recovery
SMAs are not permitted to compromise or negotiate with the beneficiary or other third
parties to reduce the amount recovered by Medicaid, unless the federal government
has been reimbursed for its share of the SMA’s recovery amount. Some SMAs contend
that beneficiaries will not cooperate in recovery actions if they will not receive a portion
of the settlement or award. SMAs have three options related to tort recovery that could
result in the beneficiary receiving a portion of the settlement or award. Specifically,
SMAs may elect one of the following options:
Apply Cost-Effectiveness Criteria. Although SMAs are not permitted to
compromise or negotiate to limit recovery, they may not pursue recovery if it is
not cost-effective. For example, a SMA may determine that it is only cost-
effective to pursue less than the full amount of Medicaid expenditures in order
to avoid the SMA’s needing to enter litigation to recover. In this case, the SMA
would be permitted to pursue the lesser amount. After recovery, the SMA would
reimburse the federal government for its share of the total amount recovered—
not the total amount of Medicaid expenditures.
The federal share of the
recovered amount is determined by multiplying the total amount recovered by
the Federal Medical Assistance Percentage (FMAP).
SMAs may forgo recovery efforts if recovery would not be cost-effective, but
may not create rules that allow beneficiaries in every case to retain a portion of
the award. In other words, cost-effectiveness must be determined on a case-by
case basis. The state plan must describe how a SMA determines whether
recovery is cost-effective (use of a dollar threshold amount of claims, time
period to accumulate claims, or other guideline).
Allowance for Attorney Fees and Costs. SMAs may choose to require that the
full value of attorney fees and litigation costs be deducted from the settlement
or award first, and then the SMA will seek to recover the full amount of
Medicaid expenses.
When SMAs take this approach, the full value of the
attorney fees and litigation costs comes out of what the beneficiary would
otherwise receive.
Alternatively, the SMA could choose to pay a proportionate share of attorney
fees and costs. The SMA’s share of attorney fees and costs would be the same
as its share of the total award. If the SMA shares in paying attorney fees and
costs, federal financial participation is available at the standard rate for program
administrative expenditures.
If an SMA elects to pay a share of the attorney fees and costs and its claim
exceeds the total award, then the SMA would pay the full attorney fees and
69
costs. If the SMA elects to cover its share of attorney fees and costs, it would
reimburse the federal government for its share based on the total amount
recovered (determined by multiplying the total amount recovered by the
FMAP)—not the total amount of Medicaid expenditures.
Note that SMAs may not have a standard reduction in recovery to account for
attorney fees. Instead, they must determine the proportion of attorney fees and
costs they will pay on a case-by-case basis.
Compromising with the SMA’s Share. SMAs can elect to give a portion of their
share of the recovery to the beneficiary once the federal government is
reimbursed for its share of the SMA’s recovery amount.
4. Tort Recovery in Global Settlements
Mass tort global settlements present another challenge for Medicaid recovery. Often,
these mass tort global settlements arise out of product liability cases related to
defective drugs or devices. These settlements may include hundreds, or even
thousands, of plaintiffs in multiple states, each of whom may be entitled to different
recovery amounts.
SMAs may not know whether and how many of its Medicaid beneficiaries are entitled to
a portion of a global settlement. Even when a SMA can identify which Medicaid
beneficiaries are receiving a portion of the settlement, they may struggle to determine
which Medicaid claims for each individual are related to the defective drug or device.
Given these challenges, SMAs may find that it is not cost-effective to pursue recovery.
In these circumstances, SMAs should work within the established litigation process and
could agree to be bound by a settlement that compensates the SMA for the medical
expenses incurred by the SMA on behalf of the Medicaid beneficiaries involved in the
settlement.
Although SMAs are not permitted to compromise the federal share of a claim for
recovery, CMS has determined that SMAs that participate in global settlements are not
violating the “no compromise” policy, since they cannot reasonably identify the medical
claims paid on behalf of a specific Medicaid recipient for which a third party is clearly
liable.
70
5. Settlement of Claims for Medicare/Medicaid Dually
Eligible Beneficiaries
Medicare has the right to recover the cost of benefits provided from employers and
workers’ compensation carriers, liability insurers, automobile or no fault insurer and
employer group health plans before any other entity, including an SMA. Medicare also
has the right to recover its benefits from any entity, including an SMA that has been
paid by a third party. In other words, Medicare’s recovery rights are higher than and
take precedence over the rights of any other entity, including SMAs, when any of these
third parties is the primary payer.
Medicaid’s right to recover lacks the priority of Medicare’s right to recover because
Medicaid gains its right to recover through the assignment of rights process. Medicaid
can recover from third parties only because the beneficiary has allowed Medicaid to
stand in the beneficiary’s shoes and receive payments that otherwise would have been
paid to the beneficiary. Beneficiaries can only assign their own rights. Under Section
1862(b)(2)(B) of the Act, Medicare has the right to recover its expenditures from a
settlement, judgment, award, or other payment received by the beneficiary even before
the beneficiary’s share of that recovery is determined. Since Medicaid can only take the
place of the beneficiary, and Medicare’s recovery rights in a settlement, judgment,
award, or other payment exist independent of any determination regarding the
beneficiary’s share of that recovery, Medicaid’s right of recovery is secondary to
Medicare’s right of recovery.
As a result, where Medicare and Medicaid have both paid for services, and the amount
available from the third party is not sufficient to satisfy the claims of both programs for
reimbursement, the third party must reimburse Medicare the full amount of its claim
before the state Medicaid agency may be paid.
If the third party has reimbursed an SMA, or if a beneficiary/recipient, after receiving a
payment from the third party, has reimbursed an SMA, the SMA must reimburse
Medicare up to the full amount it received if Medicare is unable to recover its payment
from the remainder of the third party payment. If the SMA refuses to reimburse
Medicare in full, Medicare carriers and intermediaries are instructed to refer the case to
the RO for resolution. If payment is not made by the SMA, the federal government will
offset Medicare’s claim against any federal financial participation funds that would be
paid to the SMA.
71
Chapter IV: Other Topics
A. Adoption & Surrogacy
1. Adoption
A pregnant woman who is eligible for Medicaid is entitled to Medicaid payment for
prenatal, labor and delivery, and postpartum care. If she chooses to put her baby up for
adoption, the adoptive family may be contractually obligated to cover the costs of the
mother’s care, as adoption agreements often include a provision stating that the
adoptive family will cover the costs of medical care for the mother.
Section 1902(a)(25)(A) of the Act requires the SMA to take all reasonable measures to
ascertain the legal liability of third parties to pay for care and services under the state
plan, and to seek reimbursement to the extent of the third party’s liability. The
statutory definition of third party includes “parties that are by statute, contract, or
agreement, legally responsible for payment of a claim for a health care item or
Service.” Additionally, per section 1912 of the Act, the pregnant woman, as a condition
of receiving Medicaid benefits, has assigned to the state her right to payment for
medical care by the third party.
The SMA should review the adoption agreement to determine the nature and extent of
any contractual liability to pay for the pregnant woman’s health care. If the SMA
determines that such liability exists, it should utilize the third party resource, either
through cost avoidance or pay and chase claims processing, depending on the claims
processing requirements for the type of service as specified in 42 CFR 433.139.
2. Surrogacy
Similar to the adoption context, if a Medicaid-eligible woman acts as a gestational
surrogate, Medicaid will pay for the prenatal, labor and delivery, and postpartum care.
The surrogacy contract between the biological parents and the surrogate may specify
that the biological parents are responsible for the surrogate’s medical care. If the
biological family is contractually obligated to cover medical costs, the surrogacy contract
creates TPL, and the SMA must pursue reimbursement from the biological parents to
the extent of their liability under the contract.
72
B. Indemnity Plans
Some Medicaid beneficiaries may have a type of insurance referred to as an “indemnity
plan.” Unlike traditional health insurance plans that cover claims submitted by
providers, indemnity plans pay in a variety of ways, including paying a set amount if a
certain situation occurs. For example, a policy may pay a fixed amount per day for each
day that an individual is a patient in a hospital.
Like traditional health insurance plans, indemnity plans can be a source of TPL under the
Medicaid rules. A third party includes “any individual, entity, or program that is or may
be liable to pay all or part of expenditures for medical assistance furnished under a state
plan,” including insurance offered by a private insurer.
62
Private insurers include “any
commercial insurance company offering health or casualty insurance to individuals or
groups (including both experience-related insurance contracts and indemnity contracts
[emphasis added].”
63
To determine whether a particular indemnity plan counts as a source of TPL, SMAs
should examine the terms of the particular policy. If the policy provides payment for
healthcare items or services, the policy is a third party resource. Whether the policy
will be a third party resource for any specific Medicaid-covered service will depend on
whether the policy explicitly includes or excludes the service from coverage. A general
statement of coverage for medical expenditures would be inclusive of all Medicaid
covered services.
Some policies specify that the cash payments can be used for living expenses, such as
rent, child care, or groceries. These expenses are not medical assistance under the state
plan, but the policy constitutes TPL if the cash payments are triggered by the occurrence
of a particular medical event. For example, a policy offering a cash payment for each
day an individual is an inpatient in a hospital would be a source of TPL, even if the
individual may use the cash payment to cover nonmedical expenses such as rent.
If the indemnity policy does not qualify as a third party resource, any payments made to
a Medicaid beneficiary may be countable as income for Medicaid eligibility purposes.
62
42 CFR § 433.136.
63
42 CFR § 433.136.
References
Statutes & Regulations
Social Security Act § 1902(a)(25)
Social Security Act § 1912
42 CFR § 433.139
73
C. American Indians/Alaskan Natives
American Indians/Alaska Natives (AI/AN) and Indian Health Service (IHS) providers receive
special protections under federal Medicaid law.
1. IHS is a Secondary Payer to Medicaid
Medicaid is generally the payer of last resort, meaning that Medicaid only pays for a
service if there are no other sources of payment available. There are a few exceptions to
this general rule, including, among others, IHS programs.
64
SMAs will pay for medical
expenses that otherwise would be covered by an IHS program. The IHS will stand behind
Medicaid to pay for services that are available under the IHS program but that Medicaid
does not cover.
2. Estate Recovery
Section 1917(b)(3)(B) of the Act incorporates into statute certain specific exemptions
from estate recovery for certain AI/AN income and resources, ownership interests, and
usage rights. Section 3810.A.7 of the SMM provides detailed guidance about these
exemptions.
While extensive, the exemptions from estate recovery are not all-inclusive. The SMA
may recover income, resources, and property of a deceased AI/AN that is included in
the SMA’s definition of estate and that is not exempted in the SMM.
3. Federal Share for Reimbursement of COB/TPL Collections
SMAs receive 100 percent federal matching funds for payments for services received
through an IHS program, including those operated by the IHS or an Indian tribe or tribal
organization.
65
When a SMA recovers from a liable third party for a payment for a
service received through an IHS program, the SMA should reimburse the federal
government for 100 percent of the amount paid by Medicaid, less any required
incentive payments.
64
Social Security Act § 1905(b).
65
Social Security Act § 1905(b).
References
Statutes & Regulations
Social Security Act § 1905(b).
D. Department of Veterans Affairs (VA)
1. COB: General Rule
Medicaid is generally the payer of last resort, meaning that Medicaid will only pay for a service
if there are no other sources of payment available. In other words, Medicaid will not pay
claims for services that third parties are obligated to cover.
The VA offers healthcare benefits to eligible veterans. Generally, these benefits are a source of
TPL, meaning that the VA must pay for a service before Medicaid. There are two specific
exceptions to this general rule related to payment for nursing home care and emergency
treatment in non-VA facilities.
2. Exception to COB: Payment for Nursing Home Care
The VA makes per diem payments for nursing home care provided to eligible veterans in
facilities recognized as state veterans’ nursing homes. This type of payment is generally
regarded as a source of TPL, thereby offsetting the amount Medicaid owes. A 2004 federal law,
however, prohibits these per diem payments from treated as a third party resource for the
purposes of Medicaid TPL.
66
Because of this law, the per diem payments from the VA is not
used to reduce Medicaid’s share of the cost of providing nursing home services for Medicaid
beneficiaries in these specific nursing homes.
3. Exception to COB: Payment for Emergency Treatment at Non-
VA Facilities
The VA will also pay for emergency care provided to eligible veterans at facilities not operated
by the VA (referred to as non-VA facilities). Veterans, however, are not eligible for VA coverage
of emergency treatment at non-VA facilities if they are eligible for Medicaid.
67
As a result, the
VA will not cover emergency treatment at non-VA facilities for Medicaid eligible veterans.
Since the VA is not obligated to cover this emergency treatment for Medicaid-eligible veterans,
Medicaid must cover it, and Medicaid cannot seek repayment from the VA.
66
Pub. L. No. 108-422, § 202.
67
38 U.S.C. § 1725(b)(3)(B).
References
Statutes & Regulations
Reimbursement for Emergency Treatment. 38 U.S.C. § 1725(b)(3)(B).
Pub. L. No. 108-422, § 202
E. Department of Defense (DOD)/TRICARE
The DOD provides healthcare benefits to current and retired military and their families through
the TRICARE program. Most of the general COB/TPL principles described elsewhere in this
manual apply to TRICARE, but there are a few special considerations related to the TRICARE
program.
1. TRICARE for Life
TRICARE for Life is a program for military retirees with Medicare Parts A & B, as well as their
dependents who are also covered by Medicare. TRICARE for Life acts as a Medicare
supplemental policy.
When TRICARE and Medicare both cover a service, Medicare acts as the primary payer and
TRICARE for Life covers the beneficiary’s Medicare cost-sharing. If Medicare covers a benefit,
but TRICARE does not (e.g., chiropractic), TRICARE for Life pays nothing. By contrast, if TRICARE
covers a benefit but Medicare does not (e.g., prescription drugs or overseas care), Medicare
pays nothing and TRICARE for Life cost-sharing applies.
Some individuals receiving TRICARE for Life are also eligible for Medicaid. Medicaid is the payer
of last resort for these individuals. Medicaid will only cover the handful of benefits or cost-
sharing not otherwise covered by either Medicare or TRICARE for Life.
2. Timely Filing
Under the DRA of 2005, states are required to pass laws requiring that health insurers make
payments for claims submitted by the SMA within three years of the date of service. Congress,
however, explicitly exempts TRICARE from state and local laws related to health insurance (or
other health care financing mechanisms).
68
As a result, the three-year claims filing period established under state law does not apply to
TRICARE. Instead, claims must be submitted to TRICARE within one year of the date of
service
69
or within one year after the state received the results of the annual data match from
the Defense Manpower Data Center (DMDC), Defense Enrollment Eligibility Reporting System
(DEERS) Division.
68
10 U.S.C. § 1103.
69
10 U.S.C. § 1101.
F. CMS 64 Reporting
Estate recovery as approved in the SMA’s plan outlined under 42 CFR 433.36(h) requires the SMA to
enter such recoveries on lines 9A or 9B of the CMS 64 as they apply.
1. 9A – Third Party Liability (TPL) Collections
The MBES will automatically report only collections made during the quarter for the TPL on line 9A
of the Summary Report. Report their source on form CMS 64.9a Schedule of third party liability
collections.
The MBES will automatically enter in column (a) the amount from Section-A Third Party Liability
Collections Line 2, Column (a) of the CMS 64.9a.
The MBES will automatically enter in column (b) the amount from Section-A Third Party Liability
Collections Line 2, Column (b) of the CMS 64.9a.
2. 9B – Probate Collections
Enter the amounts collected from the estates of deceased Title XIX recipients. Many Medicaid
recipients, particularly the aged in long term care facilities, die without survivors. SMAs take part
in benefit recovery through a probate collection.
If the SMA performs estate recovery, they would then be required to report on the CMS 64. In
doing so, the SMA would be required to breakdown the recouped funds to include repayment of
the federal share.
G. Health Savings Accounts (HSA)
Under IRS regulations, an individual who is enrolled in Medicaid is not eligible to make or receive
contributions into an HSA.
H. Contingency Fee Contracts
As described in Section 2975 of the State Medicaid Manual (SMM), SMAs should consult with the CMS
Regional Office (RO) before entering into a TPL contingency fee contract. The RO will review the
contract according to guidance under Section 2975 of the SMM to offer guidance on the
appropriateness of such an agreement reducing the possibility of a subsequent denial or deferral of
FFP.
1. SMM 2975.4A
States cannot pay for certain types of collections even if they are made by contingency fee
contractors:
Third party payments shown on the claim as collected by the provider,
Overpayment refunded voluntarily by the provider,
Cost avoidance from third party resources already identified in state files,
Cost-avoided claims avoided after the contractors’ initial identification of third party resource
(and after the timely reporting date for the contractor to inform the state of coverage).
The state sets the contingency fee percentage (keeping in mind the “effective and efficient”
standard).
2. SMM 2975.5
CMS doesn’t set a minimum or maximum percentage for contingency fee contracts.
CMS participates in payment of the contract’s cost.
3. 45 CFR 92.36(a)
The contractor’s fee is paid based on cost avoidance savings or actual recoveries.
4. SMM 2975.1, section 1903(a)(7) of the Social Security Act, 42
CFR 433.15(b)(7)
CMS participates in the cost of the contract at the standard (50 percent) administrative rate, not at
the FMAP rate.
CMS receives a share of the recovered funds
5. 45 CFR 92.36(a)
States must report collections and cost avoidance savings to CMS,
CMS is entitled to the FMAP share of the recover amount.
References
Statutes & Regulations
Resource Allocation Methods: Capitation or Diagnosis-Related Groups. 10 U.S.C. § 1101.
Contracts for Medical and Dental Care: State and Local Preemption. 10 U.S.C. § 1103.
REFERENCE
List of Statutory Provisions
U. S. Code and Public Law References:
Section
Reference
10 U.S.C. § 1101
TRICARE-Timely Filing
10 U.S.C. § 1103
TRICARE Timely Filing
38 U.S.C. § 1725(b)(3)(B)
Veterans Affairs – Nursing Home Care
42 U.S.C. § 10602
COB/TPL - Crime Victims Compensation Fund
42 U.S.C. § 300ff et seq.
Ryan White Program (Payer of Last Resort Exception)
42 U.S.C. § 1786
Women, Infants, and Children Program (Payer of Last Resort
Exception)
Pub. L. No. 108-422, § 202
Department of Veterans Affairs
Social Security Act – Title XVIII- Medicare
Section
Reference
§1814(a)(1)
Medicare Timely Filing Rules and Exceptions
§1835(a)(1)
Medicare Timely Filing Rules and Exceptions
§1848(g)(3)
Medicare Provider Sanctions
Social Security Act -- Title XIX – Medicaid
Section
Reference
§1902(a)(10)(E)
QMB Cost-sharing
§1902(a)(10)(E)(i)(iv)
Coverage of Medicare deductibles and coinsurance for QMBs
§1902(a)(11)
Assignment of Rights (AOR)
§1902(a)(18)
Requires that a state plan for medical assistance comply with the
provision of Section 1917 with respect to an estate recovery plan
§1902(a)(25)(A)-(I)
Legal Liability of Third Parties
§1902(a)(25)(a)
Defining Third Party Payers
§1902(a)(25)(l)
COB state assurance (added by Section 6035 of the Deficit
Reduction Act of 2005)
§1902(a)(45)
Individuals Assignment of Medical Support
§1902(a)(60)
Provides assurances satisfactory to the Secretary that the state
has
in effect laws relating to medical child support required under
Section 1908 of the Act
§1902(a)(77) and (kk)
Medicaid and CHIP provider enrollment rules
Section
Reference
§1902(n)(1)-(3)
Cost-sharing payment of options for states (QMB) and Prohibition
of Balance Billing of QMBs
§1903(c )
Parts B & C of the Individuals with Disabilities of Education Act
(IDEA)
§1903(d)(2)
Allows for reducing payments to states by the amount of TPL
reimbursement
§1903(o)
Provides that Federal Financial Participation (FFP) is not available
to a state if an insurer would have paid except for a Medicaid
exclusionary clause
§1903(p)
Allows incentive payments for collecting and enforcing rights of
support or payment assigned under Section 1912
§1905(a)
The definition of “medical assistance” expressly includes
“insurance premiums for medical or any other type of remedial
care or the cost thereof”
§1905(b)
Indian Health Services
§1905(p)(1)
Definition of qualified Medicare beneficiaries
§1905(p)(3)
Coverage of Medicare deductibles and coinsurance for QMBs
§1906
Allows for enrollment of Medicaid eligible beneficiaries in cost-
effective group health plans. States may choose to make
enrollment a condition of eligibility
§1908
Requires states to have specific laws in effect relating to medical
child support that govern employers, insurers, title IV-D and
Medicaid agencies
§1912
Assignment of Rights
§1912(a)(1)
Requires that a state plan for medical assistance require
individuals to assign their rights to third party payment and to
cooperate in establishing paternity and in identifying third parties
to the Medicaid agency
§1912(a)(2)
Requires state plans to provide for entering into cooperative
agreements for the enforcement of rights and collection of third
party benefits. These agreements may be with the State title IV-D
agency, any appropriate agency of any state, and appropriate
court and laws enforcement officials
§1917(a)
Liens
§1917(a)(1)-(2)
Liens on Real Property of Permanent Residents of Institutions
§1917(a)(1)(A)(i)
Judgment that benefits were paid incorrectly
§1917(a)(3)
Terminations of Liens
§1917(b)
Requires states to have an estate recovery program in place to
recover from deceased recipients’ estates payments for certain
Medicaid services
§1917(b)(1)(A)
Estate Recovery
Section
Reference
§1917(b)(1)(B)
Estate Recovery
§1917(b)(1)(B)(ii)
Eliminates from estate recovery, medical assistance for Medicare
cost-sharing for Medicare Savings Program benefits
§1917(b)(1)(C)
What services must or may be included in an Estate Recovery
Claim
§1917(b)(2)(A)
Estate Recovery
§1917(b)(2)(B)
Estate Recovery
§1917(b)(4)(B)
Life Estates
§1917(b)(3)
Liens & Recovery-Hardship policy
§1917(b)(3)(B)
Liens & Recovery-American Indians and Alaska Natives
§1935(d)(1)(d)
List of Regulations
42 CFR 424.44 Medicare Timely Claims Filing Rules and Exceptions
42 CFR 424.44(b) Medicare Timely Claims Filing Rules and Exceptions
42 CFR 431.52 Medicare DMEPOS-Payment – Out of State
42 CFR 433.36 Medicaid Estate Recovery
42 CFR 433.136 Payer of Last Resort - Definitions
42 CFR 433.137 COB State Plan Requirements
42 CFR 433.138 Identifying Third Parties - Exchanging Data with State Databases –
Diagnosis & Trauma Code Edits
42 CFR 433.138(k) TPL Action Plans
42 CFR 433.138(l) TPL Waiver of requirements
42 CFR 433.139 Payment of Claims
42 CFR 433.139(b)(1) Cost Avoidance
42 CFR 433.139(b)(3) Exception to Standard COB: Pay and Chase – Preventive Pediatric
Services
42 CFR 433.139(b)(3)(ii) Exception to Standard COB: Pay and Chase-Medical Support
Enforcement
42 CFR 433.139(e) Payment of claims – Waiver of Requirements
42 CFR 433.139(f) Payment of claims – Waiver of Requirements
42 CFR 140 FFP and Payment of Federal Share
42 CFR 433.140(a) FFP and Payment of Federal Share
42 CFR 433.140(b) FFP and Payment of Federal Share
42 CFR 433.140(c) FFP and Payment of Federal Share
42 CFR 433.146 Assignment of Rights – Assignment Method
42 CFR 433.148 General Requirements – Medicaid Eligibility
42 CFR 433.151 Medical Child Support
42 CFR 433.152 Requirements for Cooperative Agreements for Third Party
Collections
42 CFR 433.153(a) Medical Child Support
42 CFR 433.153(b) Medical Child Support
42 CFR 433.154 Medical Child Support – Distribution of Collections 42 CFR
438.6 Managed Care – Contracts Requirement
INDEX
A
Action Plans -II. B. Acronyms and Abbreviations - Pg. 7 Adoption and Surrogacy - IV. A.
Affordable Care Act - III. B.
American Indians/Alaska Natives - III. B., IV. C.
Annuities - III. B.
Asset Recovery - III. A., III. B. Assignment of Rights (AOR) - I. B., II. B., II. D.,
II. F. , II. F., III. C.
B
Benefits Incorrectly Paid - III. A.
C
Casualty/Tort Recovery Ahlborn settlement limitations - III. C.
Mass Tort Global Settlements - III. C.
Medicare/Medicaid claims settlement - III. C.
State Compromise of Settlements - III. C.
Tort Settlements - III. A., IV. D COB/TPL Core Concepts- I. A-D. COB/TPL Overview - Pg. 12
Coordination of Benefits (COB) - II. A-G.
Cost Avoidance - II. C., II. C., II. D., II. G., IV. A.
D
Data and Systems - II. G.
Data matches - II. B., II. F., II. G.
Defense, Department of - IV. E.
Deficit Reduction Act - II. A.
Dually Eligible Beneficaries - II. E.
E
Eligibility Determination Systems - II. B., II. G.
Estates
Non-Probate Estate - III. B.
Probate Estate - II. B., III. B.
Recovery - II.B., II. F., II. G., III. A., III. B., IV. C. Undue Hardship - II.B.
F
Federal and State Partnership in COB/TPL
Activities - I. A.
Federal Emergency Management Agency - I. D.
Federal Funding of COB/TPL Activities - I. B. Federal Medical Assistance Percentage (FMAP) -
I. B., III. C.
G
Government Reparation Payments - III. B.
I
Identifying Liable Third Parties - II. B.
Indemnity Plans - II. B., IV. B.
L
Liens Dissolution - III. A.
Pre-Death Liens - III. A.
TEFRA /Real Property - III. A.
Liens and Recovery TPL - III. A-C.
M
MAGI (New Adult Group) - III. B.
Managed Care - II. F.
Managed Care Organizations (MCO) - I. C., II. B., II. E.
Medical Child Support Payments - II. D. Medicaid Management Information System
(MMIS) - II. B., II. G.
Medicare
Advantage - II. E.
Cost-sharing - II. A., II. E., III. B., IV. E.
Dually Eligible Beneficiaries s - II. E.
Part A - II. E.
Part B - II. E.
Part C - II. E.
Part D - II. E.
Medicare (cont):
Pharmacy Retro Part D - II. E.
Skilled Nursing Facility Services - II. E.
O
Older Americans Act - I. D.
Other Topics - IV. A-E.
P
Pay and Chase
Children with IV-D Support Activity - II. D.
Prenatal Services - II. C., IV. A.
Preventive Pediatric Services - II. C.
Payer of Last Resort - I. C., I. D., II. B., II. F., IV. C., IV. D., IV. E.
Payment of Claims - II. C., II. F.
Pregnant Women - I. C., IV. A.
Q
Qualified Medicare Beneficiary (QMB) - II. E.
R
Regulations - I. A., I. D., II. B., II. E., II. G. List of Regulations - Pg. 85
Reparation Payments - See Government
Reparation Payments
S
Social Security Act - I. C., II. A., II. E., II. F., III. C., IV. A.
Specified Low-Income Medicare Beneficiary (SLMB) - II. E.
State Plan - II. A., II. B., II. C., II. D, II. E., III. B.,
III. C., IV. A., IV. B.,
Requirements - II. A.
Statutory Citations - Pg. 82 Sub-capitation payment - II. F.
T
Tax Equity and Fiscal Responsibility Act (TEFRA)
- see Liens
Technical Advisory Group - I. A.
Third Party - II. B.
Third Party Liability (TPL) -I. A-D., II. A-G., III. AC.
Tort Recovery - see Casualty/Tort Recovery Trauma Code Editing - II. B. TRICARE - IV. E.
U
Undue Hardship - see Estate Recovery
V
Veterans Affairs, Department of - IV. D.
W
Waivers - II. B., II. C., II. E.
