If enacted, HB 5584 would adjust how states manage Medicaid-related expenses when third-party insurance is involved. States will be required to obtain and verify information on whether individuals eligible for medical assistance have health insurance coverage through third parties. This means that without proper verification, states may face challenges in recovering costs from these third parties, potentially increasing expenses to the Medicaid program if states do not comply with the new verification requirements. Notably, failure to meet these conditions could prevent states from receiving federal financial participation (FFP) for certain expenditures.
Summary
House Bill 5584, titled the Medicaid Third Party Liability Act, aims to amend Title XIX of the Social Security Act by clarifying the obligations of third party payers regarding medical assistance paid under the Medicaid program. The bill focuses specifically on ensuring the liability of health insurers and other third-party payers, detailing requirements for states that choose to contract these services. It emphasizes the need for health plans to provide clear contractual obligations concerning recovery rights from responsible third parties, which may affect the processing of claims under Medicaid.
Contention
Debate around the bill may arise mainly from the balance it strikes between efficient management of Medicaid resources and the liability of third-party payers. Proponents argue that the clarity and flexibility offered will enhance state capabilities in managing claims and pursuing recoveries, thereby safeguarding Medicaid funds. However, critics might raise concerns regarding the administrative burden on states and the implications for beneficiaries who may face coverage issues or delays in assistance due to the verification of insurance status. Ultimately, the legislation modifies existing protocols surrounding third-party liability, reflecting ongoing efforts to streamline Medicaid funding and reimbursement processes.
Medicaid Third Party Liability Act This bill modifies requirements relating to Medicaid third-party liability. Current law generally requires legally liable third parties (e.g., health insurers) to pay claims before Medicaid. However, Medicaid must pay first (and seek reimbursement from liable third parties) for claims for (1) preventive pediatric care, and (2) services for an individual for whom child support enforcement is being conducted by the state. The bill repeals these exceptions. Current law also requires state Medicaid programs to take all reasonable measures to identify legally liable third parties. The bill specifically prohibits federal Medicaid payment for services to individuals for whom third-party insurance information was not obtained and verified by the state.