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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