Description
Third Party Liability (TPL) is the obligation of any entity other than Medicaid or the recipient to pay all or part of the cost of the recipient’s medical care. If the recipient has other coverage through a TPL source, the provider must bill the TPL source prior to billing Medicaid
Providers must verify recipient eligibility prior to serving the recipient and verify third party sources prior to billing Medicaid. TPL information for each recipient is available to a provider whenever the provider verifies recipient eligibility.
Medicaid is the payer of last resort. If a recipient has other insurance coverage through a third party source, such as Medicare, TRICARE, insurance plans, AARP plans, or automobile coverage, the provider must bill
the primary insurer prior to billing Medicaid.
If the amount of the third party payment meets or exceeds the Medicaid fee for the service, Medicaid will not reimburse for the service. If the third party payment amount is less than the Medicaid fee, Medicaid will reimburse the difference between the Medicaid fee and the third party payment minus any
Medicaid copayment or coinsurance.
If a third party source, such as an insurance company, pays a provider who has already been paid by Medicaid, the provider must adjust or void the claim to debit the Medicaid payment.
Exceptions to Medicaid Being Payer of Last Resort
Exceptions to Medicaid being payer of last resort are federal funds from the Individuals with Disabilities Education Act (I.D.E.A.), Part B or C; Victim’s Compensation; and programs funded through state and county funds such as Children’s Medical Services, AIDS Drug Assistance program, Department of
Health indigent drug programs, county health departments, substance abuse, mental health and developmental disabilities programs funded by the Department of Children and Families, and Vocational Rehabilitation programs. Funds from these programs may be accessed after Medicaid. A provider may
bill Medicaid for a service prior to billing these programs.
TPL Prior Authorization
The provider must inquire if a service to be rendered needs approval from a third party source and obtain approval if needed. Failure to obtain required third party prior approval is not sufficient cause for Medicaid to pay the provider’s claim
