Under section 1902(a)(25)(H) of the Social Security Act (the Act) before passage of the Deficit Reduction Act of 2005 (DRA), states were required to have laws in effect that to the extent Medicaid payment was made, the state was considered to have acquired the rights of the Medicaid beneficiary to reimbursement by any other party that was liable for payment. However, payers sometimes deny Medicaid claims based on procedural requirements. Section 1902(a)(25)(I) of the Act, added by the DRA, strengthens the statute by requiring states to enact laws that require health insurers:
(1) To accept the state’s right of recovery and the assignment to the state of the right of a Medicaid beneficiary or other entity to payment from such party for an item or service for which Medicaid has made payment; and,
(2) To process and, if appropriate, pay the claim for reimbursement from Medicaid to the same extent that the plan would have been liable had the plan’s card been used for billing at the “point of sale” (POS).
Specifically, the state should pass laws which require an insurer to agree not to deny claims submitted by the state on the basis of 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 POS that is the basis of the claim.
Whether a plan provision affecting payment for an item or service is solely procedural in nature or whether it defines or limits the covered benefits must be determined on a case-by-case basis.
Note that nothing in the DRA negates the state’s responsibility to provide proper documentation when submitting claims to the health insurer so that the insurer can determine that a covered service for which the insurer is liable was provided.
(FAQ10550)
