The Social Security Act (the Act) generally requires health insurers and other third parties that are legally liable to pay for health care services received by Medicaid beneficiaries to pay for the services that are primary to Medicaid. However, state Medicaid agencies might mistakenly pay claims for which a third party may be liable, because they are not aware of the existence of other coverage.
The Deficit Reduction Act of 2005 (DRA) made a number of changes to title XIX of the Social Security Act intended to strengthen state Medicaid programs’ ability to identify and collect from third party payers that are legally responsible to pay claims primary to Medicaid.
Specifically, section 6035 of the DRA amended section 1902(a) (25) of the Act:
(1) To clarify which specific entities are considered “third parties” and “health insurers” that may be liable for payment and that cannot discriminate against individuals on the basis of Medicaid eligibility; and,
(2) To require that states pass laws requiring health insurers:
(a) To provide the state with the coverage, eligibility, and claims data needed by the state to identify potentially liable third parties, including, at a minimum, name, address, and ID number;
(b) To honor the assignment to the state of a Medicaid beneficiary’s right to payment by insurers for health care items or services; and,
(c) Not to deny such assignment or refuse to pay claims submitted by Medicaid based on procedural reasons (e.g., the failure of the beneficiary to present his/her insurance card at the point of sale, or the state’s failure to submit an electronic, as opposed to a paper, claim).
(FAQ10520)
