Increasingly, lawyers find that even when an injured client has some type of health care coverage, when the client has been injured by the negligence of a third party, it is often difficult to get the health insurer to pay the bills. Typically, this stems from the Health Insurance contract having language that says the insurer is a "secondary payer" or "payer of last resort".
In the not too distant past, Medicaid was a reliable source for payment of medical bills for clients who were from low incomes homes or disabled (but not eligible for Medicare).
In the last five years, Medicaid has changed rules which emphasize that Medicaid is a secondary payer to third party liability insurance. While this seems "fair" in the sense that the negligent third party caused the injury, the reality is that Liability Insurance Companies rarely, if ever, "pay as you go" for medical treatment. To protect their insured (and their bottom line) they refuse to pay for services as they are rendered and choose to pay "at the end" of the case, after treatment is completed.
This makes it hard for clients to get needed medical treatment, makes that treatment more "expensive" for the client, and takes away Medicaid's 1/3 "cap" on recovery from liability settlements.
I frequently get inquiries from lawyers about how to "make Medicaid pay" for medical treatment. Alternatively, the question is also "How can I force the medical provider to submit the bills to Medicaid?" Many medical providers do not like being paid by Medicaid because the reimbursement rates are low and the provider must accept Medicaid's payment as payment in full (aside from the $3 co-pay Medicaid allows).
Below I have pasted the relevant sections from Medicaid's manual to medical providers which provide the framework for how to get the bills paid.
You can view the entire Medicaid manual here.
Retroactive coverage may be approved for up to three calendar months prior to the month of the application if the applicant meets all eligibility conditions in the retroactive period. Medicaid will pay for covered services received during the retroactive period provided that all other Medicaid guidelines are met. Providers may choose to accept or decline retroactive eligibility. However, the provider's office policy should be consistently enforced. If a provider accepts retroactive eligibility, upon receipt of Medicaid reimbursement, the provider shall refund to the recipient all money paid by the recipient for services covered by Medicaid.
Accepting a Medicaid Recipient
In accordance with 10A NCAC22J.0106, a provider may choose whether to accept a patient as a Medicaid patient. However, Medicaid providers must be consistent with their policies and procedures when accepting or refusing Medicaid recipients. Providers may not discriminate against a Medicaid recipients based on the recipient's race, religion, national origin, color, or handicap.
Agreeing to provide services to a Medicaid recipient and submission of a claim to the N.C. Medicaid Program for payment constitutes agreement to accept the Medicaid payment (in addition to any authorized copayment or third-party payment) as payment in full.
A provider may refuse to accept a Medicaid recipient and bill the recipient as private pay only if the provider informs the recipient prior to rendering the service, either orally or in writing, that the service will not be billed to Medicaid and that the recipient will be responsible for payment.
But of course, you have to compare those passages to the rules regarding Third Party Laibility situations:
State and federal regulations for third-party liability (TPL) require responsible third-party insurance carriers to pay for medical services prior to a provider's submitting a claim to Medicaid. Providers are required to seek payment from third-party insurance carriers when they know of their existence. A third-party insurance carrier is an individual or company who is responsible for the payment of medical services. These third parties are Medicare, private health insurance, automobile, or other liability carriers. DMA's third party recovery (TPR) unit is responsible for implementing and enforcing TPL laws. The TPR unit implements and enforces these laws through both cost avoidance and recovery methods. Refer to Section 7, Third-Party Insurance, for additional information.
Time Limits for Filing Claims
All Medicaid claims, except inpatient claims and nursing facility claims, must be received by HP Enterprise Services within 365 days of the date of service in order to be accepted for processing and payment. All Medicaid hospital inpatient and nursing facility claims must be received within 365 days of the last date of service on the claim.
Third Party Liability – Commercial Health Insurance and Medicare – Medicaid Payment Guidelines for Third Party Coverage
Federal regulations require Medicaid to be the "payer of last resort." This means that all third-party insurance carriers, including Medicare and private health insurance carriers, must pay before Medicaid processes the claim. Additionally, providers must report any such payments from third parties on claims filed for Medicaid payment.
Determining Third-Party Liability- Commercial Health Insurance and Medicare
The following information helps providers to determine if a Medicaid recipient has third-party liability (TPL):
1. Check the recipient's eligibility for third-party insurance information. (Refer to
Appendix F, Verifying Recipient Eligibility, for additional information on verifying eligibility and checking for third-party insurance.)
2. Before rendering service, providers should ask the recipient if s/he has any additional health insurance coverage or other TPL, including Medicare. If health insurance is indicated, the provider must bill the carrier before billing Medicaid written denial from the insurance company.
Time Limit Override on Third-Party Insurance – Commercial Health Insurance
All requests for time limit overrides due to a third-party insurance carrier that does not respond within its time limit must be submitted to the TPR section and include documentation verifying that the claim was timely filed to the third-party insurance carrier.
If the third-party insurance carrier does not respond within the Medicaid time limit, time limit overrides may be granted if the claim is filed within 180 days of the third-party denial or payment. Submit the claim with a completed Medicaid Resolution Inquiry Form.
Billing for Personal Injury Cases
The provider must choose between billing Medicaid and submitting the bill of charges to the liability insurer. Providers cannot initially file a casualty claim with Medicaid, receive payment, and then submit the bill of charges to the liability insurer (or the recipient) for the same service, even if the provider refunds Medicaid.
The provider cannot bill the recipient, Medicaid, or the liability insurer for the difference between the amount Medicaid paid and the provider's full charges. (See Evanston Hospital v. Hauck, 1 F.3d 540 [7th Cir. 1993])
Providers who withhold billing Medicaid have six months from the date of a denial letter or receipt of payment from the insurance company to file with Medicaid, even if the end of the six months is after the end of the usual 365-day filing deadline.
In order for the provider to obtain a time limit override, however, the following requirements must be met:
• The provider must have filed the claim with the liability insurer or attorney within 365 days from the date of service.
• The provider must have made bona fide and timely efforts to recover reimbursement from the third party.
• The provider must submit documentation of partial payment or denial with a claim to Medicaid within six months of such payment or denial.
Payment for Personal Injury Cases
When Medicaid payment is received, the provider is paid in full and there is no outstanding balance on that claim. Once Medicaid makes a payment for a service, only Medicaid has the right to seek reimbursement for payment of service. If the provider withholds billing Medicaid and receives payment from a liability insurer , the provider may bill Medicaid with the liability payment indicated on the claim. Medicaid may pay the difference if the Medicaid allowable amount is greater than the liability payment. Pursuant to federal regulations and the Evanston case, there is a distinction between private health insurance payments and other liable third-party payments.
Refunds and Recoupments for Personal Injury Cases
If Medicaid discovers that a provider received Medicaid payment and communicated with a third-party payer or attorney in an attempt to receive payment of any balance,Medicaid will recoup its payment to that provider immediately, regardless of whether the provider ultimately receives payment from that third party.
The following is an example of how a liability payment should be treated:
Amount billed by provider to Medicaid $100.00
Amount paid by Medicaid $50.00
Amount paid by attorney/liability carrier $100.00
Amount to be refunded to Medicaid $50.00
Amount to be refunded to attorney/liability $50.00
The following is from a "Frequently Asked Questions" portion of the Medicaid rules book:
2. Why was my claim denied for EOB 094, "Indicate private insurance payment or attach denial and submit as a new claim. (UB users may use insurance denial occurrence codes.) Attach Medicare vouchers if applicable."?
The TPL database indicates the recipient had third-party insurance on the date of service for which you are requesting reimbursement and that this type of insurance should cover the diagnosis submitted for payment. If your service could be covered by the type of insurance indicated, you must file a claim with that insurance company prior to billing the Medicaid program. If you receive a denial that does not indicate noncompliance with the insurance plan, or if you are paid for less than your charges,bill the Medicaid program and, if appropriate, your claim will be processed.
9. May I have an office policy that states I will not accept Medicaid in conjunction with a private insurance policy?
Yes. A provider can refuse to accept Medicaid for recipients who also have third-party coverage, even though they accept Medicaid for recipients who do not have third-party coverage. However, providers must advise the recipient of the responsibility for payment before the services are rendered. The provider must obtain proper consent from the recipient for this arrangement prior to any services being rendered. The signed form must be in the recipient's record.
11. When do I file my claim with HP Enterprise Services and when do I file it with the TPR section? Send your claim directly to HP Enterprise Services when
• The recipient has no private health insurance
• The insurance EOB reflects an insurance payment
• There is an insurance denial with the following reasons:
Applied to the deductible
Noncovered services (meaning the service was not and will never be covered under this policy)
My advice to lawyers is to contact the medical providers immediately and explain that payment from a liability claim may not be forthcoming in any short period of time. Encourage the provider to submit the bills to Medicaid. It may also be persuasive to have the Liability carrier write a "denial letter" or send a copy of a letter where the carrier cites "pre-existing conditions" as a reason for not settling the case. This may encourage the provider to submit the bills to Medicaid.
Further, if a provider refuses to accept Medicaid, and that provider is a hospital, inquiries into the consistency of those submissions to Medicaid may encourage submission.