Guidance Should be Extended to States For TPL Collection, Claimed GAO in 2006

In September 2006, shortly after the Deficit Reduction Act of 2005 (DRA) was authorized into statute, the Government Accountability Office (GAO), that is the investigatory arm of the U.S. Congress set up to assist Congress in enhancing efficiency and responsibility of the federal government to the nation's residents, documented that 13 percent of Medicaid recipients in the years from 2002 to 2004 held supplemental medical insurance coverage, referred to as third-party liability (TPL), and this ought to be financing health costs prior to contributions from Medicaid. The GAO additionally found that states were suffering complications with regard to retrieving TPL funds in two aspects: 1) determining when Medicaid beneficiaries owned private health insurance coverage; and 2) garnering payments from these insurance companies.

Upon scrutinizing these difficulties, the GAO said two areas should be resolved by the Centers for Medicare & Medicaid Services (CMS), the department within the U.S. Department of Health and Human Services (HHS), which manages Medicaid, and they are 1) to set up a timeline for states to enact laws that abide by TPL demands created by DRA; and 2) identify the certain entities that must adhere to state laws imposed by DRA on TPL payments. CMS concurred with these GAO suggestions and as of June 2006, advised the GAO that CMS was creating guidance to states.

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Inspector General 2013 Report Unveils Increased TPL Savings, Even More is Feasible

In the January 2013 study, "Medicaid Third-Party Liability Savings Increased, But Challenges Remain," the U.S. Department of Health and Human Services' (HHS) Office of Inspector General (OIG) claims there's been a step-up in third-party liability (TPL) payments to states in cases where Medicaid customers hold additional medical insurance. This same report adds that states need aid in acquiring a hefty quantity of money, that rightly belongs to them, but is left on the table.

Within the 10 years between 2001 and 2011, the OIG identified that TPL savings by states increased from a savings of around $34 billion to a savings of over $72 billion, that equates to a growth of 114 percent in recovered savings over that period of time. On the other hand, problems remain for states receiving complete TPL recovery, with an assessed $4.1 billion of TPL debts vulnerable of never getting recaptured by states. The following instructions are advanced by the OIG to the Centers for Medicare & Medicaid Services (CMS) to solve states' complications with TPL collections:

• Facilitate states in focusing in on lingering complications with identifying insurance coverage and recovering payments from insurance companies;
• Aid states through the Medicare and TRICARE one-year timely filing limit problems; and
• Put some teeth into the enforcement of insurance companies that refuse to comply with prevailing statutes.

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As part of the prior postings, we went over the 3 main "practices" states ought to adopt in order to cost avoid and save taxpayer money. For states to possess a genuinely effective TPL plan, prompt identification of any additional coverage is needed during the time of Medicaid registration. Also, cost avoidance discovery must be instant whenever claims are made, and claims that were paid in error should be recovered swiftly. The ideal situation is one through which federal regulations and state laws merge to establish a genuinely comprehensive DRA Policy that recognizes additional health insurance coverage with speedy recovery of each claim.

A Complete TPL State Program Contains:.

The active identification of other coverage at enrollment.
The quick avoidance of the cost of claims.
The ability to recover claims paid incorrectly.

If embraced by all states, the preceding suggestions lend towards the meaningful recovery of money for state Medicaid agencies, along with the saving of money. The onus of these economic times is to do more with less money. And, as the Affordable Care Act (ACA) comes to be effective on Jan. 1, 2014, Medicaid claims are going to expand. That's why bolstering DRA-compliant legal language within all states will lend to improved cost recovery and additional savings for the healthcare of the whole country.

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Healthcare Cost Containment for States

The practice of an MCO or Medicaid charging a medical insurance provider is backwards. It's absolutely the obligation of the commercial insurance provider to make the preliminary payment, to ensure that insurance coverage claims are not delayed, which is the case when Medicaid or a Medicaid MCO does the initial billing.

It only makes sense that insurance providers should be required to handle claims quickly and make timely payments regardless of whether the claims are electronic or on paper. So long as an acceptable timeframe is utilized, an MCO or a state Medicaid agency ought to have the right to identify alternative claim processing approaches in order to maintain the integrity, and consequently the speed, of the entire process. Eventually, this implies that federal laws are complied with, timetables are developed on retrospective recoveries by state Medicaid agencies, and Medicaid funds aren't left in a state of limbo... Read More

State Practice Two: Indentifying TPL Insurers

This is the second blog post in a 3 part series through which I discuss exactly what measures states really should adopt to develop an efficient TPL scheme. In part one, we reviewed the necessity for insurers to cooperate in the active identification of other insurance coverage. With this installment, we discuss exactly how to receive the records required for healthcare cost containment and, more significantly cost avoidance. Read More

TPL State Plan Recommendations Part 1: Get insurer Cooperation

The only means for states to have an efficient third party liability plan is through efficient discovery of additional coverage. Additionally, when claims are generated, cost avoidance must be prompt. What works best is when the federal directives and state laws mesh to form a totally thorough DRA plan that recognizes additional health insurance coverage with prompt recovery of each claim.

A thorough state third party liability program must contain:

• The active detection of other insurance coverage at Medicaid registration.
• The prompt avoidance of the cost of claims
• The ability to recuperate claims paid incorrectly

Creating better TPL plans necessitates that states gain from the missteps of other states. Read part 1 of a three part series that summarizes procedures that can be adopted by states to achieve increased TPL recoveries and therefore enhance cost savings...   Read More

Regulations Regarding Third Party Liability and Payers of Last Resort

In 1934, FDR signed the Social Security Act into law. One of the law's statues specifies "... that the State or local agency administering such plan will take all reasonable measures to ascertain the legal liability of third parties ... to pay for care and services" offered to Medicaid beneficiaries.

Basically, it denotes that Medicaid becomes the payer of last resort (PLR), a term also named third party liability (TPL), or the Coordination of Benefits (COB). Essentially, Medicaid pays last, and if a Medicaid member possesses other insurance policies, such as insurance through his/her employer, that insurance provider pays first then Medicaid pays any remaining costs.

As much as 10 percent of the Medicaid members throughout the country keep additional insurance beyond Medicaid, which is deemed TPL. Varieties of TPL include employee insurance, Workers' Compensation, Medicare, COBRA health insurance from previous employment, casualty insurance, dental insurance, eye insurance and insurance to cover prescription costs....    Read More