814 THIRD PARTY LIABILITY (TPL), RESOURCE (TPR), AND RECOVERY
A Medicaid recipient may have a TPR that is available or required to provide direct services or payment of their medical care. A Medicaid recipient is required to assign to the state their right to their medical care and cooperate in obtaining or identifying any health resource available. Assignment is automatic upon application. The assignment ends when Medicaid ends. Adult applicants and recipients may be denied or terminated from Medicaid for failure to assign rights or cooperate, as specified in this section.
By law, Medicaid funds are to be expended only after all other available resources have been used. The state is required to maximize all third party health care sources to the fullest extent possible before Medicaid will pay for services. This refers to third party resources, which assume liability for payment because a person has received medical care and services. Medicaid is the payer of last resort, except for U.S. Public Health Service (Alaska Area Native Health Service (AANHS) or Indian Health Service (IHS). Any recipient who has access to IHS facilities may choose between those facilities and Medicaid.
The Medicaid program is jointly funded by the federal government and states. The federal government pays states for a specified percentage of program expenditures, called the Federal Medical Assistance Percentage (FMAP). The regular State of Alaska FMAP is 50% but certain groups receive a higher reimbursement so it is important to make sure individuals receive Medicaid in the correct category, with the correct Medicaid subtype. Alaska can receive a FMAP of 100% for individuals who are eligible for IHS so it is required that IHS eligibility be coded in the eligibility system(s) so that the State of Alaska can by fully reimbursed for these Medicaid expenditures.
Note:
When a client is IHS eligible, the information must be populated in ARIES under IHS Details and/or in EIS on the MERI screen.
To verify which individuals may/should be covered by IHS as a TPR, please visit the Indian Health Manual, section 2-1.2, Persons Eligible for IHS Health Care Services.
Example:
A non-Indian woman pregnant with an eligible Indian's child is eligible for IHS for the duration of her pregnancy and through the 6-week postpartum period.
The Division of Health Care Services (DHCS) edits medical claims submitted for payment that indicates services have been delivered that are related to an accident or injury. Their TPL Unit develops this information and acts as a clearinghouse for all reports of Third Party Resources (TPR) or Third Party Liability (TPL), making referrals to the appropriate office or agency.
Indemnity Policy: Insurance which provides payment directly to the policyholder under certain conditions. Indemnity policies are a potential third party resource, which are subject to the assignment of rights provisions if the benefits payable are designated for medical care or can be used for that purpose. There are many variations in this type of policy. The caseworker must examine each policy to determine the type of benefit it provides and the purposes for which it can be used. If not a third party resource, the proceeds from this type of policy are usually considered income.
Medical Support: Payment of the costs of medical care ordered by a court or administrative process established under state law.
Minimum Value Standard: For MAGI Medicaid, an employment-related health insurance plan sold to employees must meet a “Minimum Value Standard.” An Employment-related health insurance plan meets the "minimum value standard" if the plan’s share of the total allowed benefit costs covered by the plan is no less than 60 percent of such costs. The plan must also be affordable. Under federal rules a healthcare plan is not considered to be affordable if it costs the employee more than 9.5% of the individual’s income.
If there is a cost for the employment-related health insurance plan, or an applicant or recipient states they cannot afford the coverage, we cannot require them to pursue it.
Private Insurer: A commercial insurance company offering health or casualty insurance to individuals or groups.
814 B. THIRD PARTY RESOURCE (TPR)
A third party resource is an entity, individual, or program that is, or may be, liable to pay all or part of a recipient's health care. Third parties include, but are not limited to:
1. Private or group health insurance, including Medicare;
2. Pre-paid Medical plans;
3. Employment-related health insurance;
4. Indemnity policies;
5. Medical support from a noncustodial (absent) parent;
6. Self-insured and self-funded medical plans, or trusts;
7. Auto or homeowner liability insurance;
8. Tenant or landlord insurance;
9. Court judgments or settlements from a liability insurer, malpractice, wrongful injury, or civil assault lawsuit;
10. Workers compensation;
11. First party probate-estate recoveries; and
12. Other federal programs, including Tricare, with the exception of AANHS or IHS programs
814 C. APPLICANT / RECIPIENT RESPONSIBILITY
An applicant or recipient must:
1. Provide all available information about any third party resources and must inform DPA of any changes;
2. Assign his/her rights (and the rights of any other eligible individuals on whose behalf he/she has legal authority under state law to assign such rights) to medical support and to payment for medical care from any third party;
3. Cooperate in establishing paternity and obtaining medical support and payments;
4. Cooperate, in the absence of good cause, in providing information to assist the state in pursuing any liable third party; and
5. Except for pregnant women, cooperate in establishing paternity (CSSD) and obtaining medical support.
Any injury caused negligently or intentionally to a Medicaid recipient by another person, business, or organization should be reported promptly to DHCS. The recipient must cooperate in any TPL recovery efforts by the DHCS as a condition of initial or continued Medicaid eligibility.
814 D. INDICATORS OF A POTENTIAL THIRD PARTY RESOURCE
During the intake process, the following indicators may represent potential third party resources:
1. Age: An applicant aged 65 or older is usually eligible for Medicare coverage and a child may also be covered through a noncustodial parent.
2. Death: An application on behalf of a deceased person should be examined for "last illness" coverage through any life insurance policies.
3. Income: Certain income sources are indicators of possible health insurance coverage. Examples include Social Security Retirement and Disability payments, Worker's Compensation, Child Support payments, and employment.
4. Employment History: Retirement from an employer, such as State of Alaska, or previous military service, or a noncustodial parent retired from the military, suggests the potential for continued coverage from the employer.
5. Monthly Expense: A look at work expenses may show that the applicant pays health insurance premiums.
6. Disability Information: If a disability is indicated in the application or brought up in the interview, look for a casualty or accident involving a legally responsible third party.
7. Change In Marital Status: Marriage or divorce of a recipient may indicate the possibility of health insurance coverage for a member of the household.
814 E. ET ACTIONS RELATED TO TPL / TPR
1. Application, Renewal, Or Report Of Change
Third party liability must be reported by a recipient when applicable. If a recipient reports an accident or injury, mentions a Workers' Compensation claim, or reports receipt of any lump sum income which is, or appears to be, related to an accident, the caseworker will email this information directly to the DHCS TPL unit at DMATPL@alaska.gov.
The TPL Unit edits medical claims submitted for payment which indicate that services have been delivered related to an accident or injury. The TPL unit develops this information and acts as a clearinghouse for all reports of TPR or TPL, making referrals to the appropriate office or agency.
During application, renewals, or reports of change, the caseworker must take the following actions in these specific situations when a TPR is known to exist:
If the applicant meets all other eligibility criteria but does not have specific TPR information available at the time of application, authorize the Medicaid and then pend the case for information about the resource. Most TPR information may be obtained verbally, however, TPR end dates must be verified.
If the individual refuses to provide third party or insurance information available to them after they have received adequate notice, then they are ineligible for Medicaid. The caseworker must close the Medicaid case for the individual who is refusing to provide third party insurance information. If the non-cooperating individual later agrees to cooperate, his or her eligibility may begin in the month cooperation begins.
If a minor child is involved in the Medicaid household, do not remove the child from the case due to non-cooperation.
2. Definite Third Party Resource:
If the individual names a definite third party resource, enter any known specific information in the eligibility system. The information requested on that screen includes:
1. The carrier code indicating the insurance company;
2. Type of insurance;
3. Policy number;
4. Group number; and
5. The start and end dates.
The DHCS TPL unit may also update the information in the eligibility system.
3. Possible Third Party Resource:
If there is an indication of a possible third party resource, including insurance coverage, liable party for an accident or injury, or noncustodial parent coverage, but not enough specific information necessary for entry in the eligibility system, collect all data the individual is able to provide (e.g., name, address, phone number of the insurance company, SSN of policy holder, employer of a noncustodial parent) and send an email with this information to the DHCS TPL unit at DMATPL@alaska.gov. The TPL unit will research the information.
4. Third Party Resource Is Available:
If the individual indicates that a TPR is available to a member of the household for which the household member has not applied, notify the applicant or recipient that they must apply and send a notice. If the individual is a mandatory member of the household and refuses to apply for the available resource, that individual's Medicaid eligibility ends.
5. Third Party Resource is Available - Unable to Provide Information:
If the individual reports an accident or injury, mentions a Workers' Compensation claim, or reports receipt of any lump sum income which is, or appears to be, related to an accident, or indicates that there is a possibility of a TPR (noncustodial parent with employment), but the individual does not have access to the information, collect as much information the individual can provide and email the DHCS TPL unit at DMATPL@alaska.gov. Do not deny the case because the individual is unable to provide all the information requested.
814 F. GOOD CAUSE WAIVERS FOR COOPERATION WITH TPL REQUIREMENTS
It is a condition of Medicaid eligibility that every applicant or recipient provide TPR information and cooperate in identifying the resource. Inform individuals that a good cause waiver of cooperation is available if physical or emotional harm may occur, either to himself or herself or to another person for whom the individual may assign rights, if cooperation is required of them.
If the individual claims that cooperation in identification and pursuit of a TPR is reasonably anticipated to result in physical or emotional harm, (excluding situations related to CSSD) the individual must provide evidence to substantiate the claim.
Issue benefits to an otherwise eligible recipient pending resolution of whether a waiver should be granted, if the applicant or recipient meets all other eligibility factors and has submitted the evidence to determine good cause.
Email hss.dpa.policy@alaska.gov that a good cause waiver determination is needed and send the documents supporting the claim. The Program Officer will notify the caseworker and the DHCS TPL unit of approval or disapproval of the good cause claim.
814 G. COOPERATION WITH TPL / TPR AND INDIVIDUALS UNDER 18
In Alaska, individuals have legal authority to conduct their own business when they are 18, married, or legally emancipated. For these individuals, follow the procedures outlined in this manual section for cooperation as though the minor were an adult. If a minor applies for Medicaid, is living independently in the community, the minor may sign the Medicaid application (assigning rights to medical support and indicating cooperation with TPL). Ask the minor under 18 if his/her parents have any health insurance coverage, and email the TPL unit at DMATPL@alaska.gov if any information is available. DHCS will follow-up on the TPL information. Do not require the minor to obtain the health insurance policy of the parent for verification unless the minor indicates a willingness to do so.
The DHCS TPL unit updates the carrier codes on a monthly basis for each insurance carrier registered by the DHCS. A complete listing of these carriers and codes can be obtained at DMATPL@alaska.gov.
814 I. ESTATE RECOVERY AND TRANSFER OF ASSETS
Under the Omnibus Budget Reconciliation Act of 1993(OBRA 93), state Medicaid agencies are required to recover from the individual’s estate the cost of Medicaid that was provided to persons age 55 and older for nursing facility services, home and community based services, and related hospital and prescription coverage.
These requirements may have a significant impact on estate planning, particularly for individuals who wish to protect family assets from the high cost of nursing home care. Under the rules for estate recovery, the state must seek reimbursement from the estate of the deceased Medicaid recipient. Property that was exempt during the Medicaid recipient's lifetime is no longer exempt when the recipient dies, except that the State cannot collect from an estate if there is a:
1. Surviving spouse;
2. Minor child; or
3. Disabled (as determined by SSA) dependent child of any age residing on property included in the deceased's estate.
An individual who is institutionalized or receiving home and community based (HCB) waiver services and who transfers income or resources for less than fair market value may be subject to a penalty that results in a period of ineligibility for institutional or HCB waiver services. In order for a penalty to apply, the transfer must have occurred within the look-back period.
Medicaid transfer of assets rules apply to all institutionalized individuals and to all individuals receiving HCB waiver services, regardless of their eligibility category.
See the Aged Disabled and Long Term Care MS 507 for information about estate recovery and ADLTC MS 554 for information about transfer of assets.
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