Paul Sanchez
Medicaid beneficiaries may have additional sources of coverage for healthcare services, such as private insurance, Medicare, or other public programs. In such cases, providers must coordinate benefits and adhere to guidelines for accurate and timely payment. This involves determining the primary and secondary payer, with Medicaid often serving as the payer of last resort when no other insurance is available. To ensure prompt reimbursement, providers can submit secondary claims directly through ePaces, the online portal for Medicaid providers.
| Characteristics | Values |
|---|---|
| When Medicaid is secondary insurance | When a patient has both Medicare and Medicaid coverage, or when there is a primary private insurance |
| Who is the primary payer? | Medicare is the primary payer for beneficiaries who are not covered by other types of health insurance or coverage |
| Who is the secondary payer? | Medicaid becomes the secondary payer and pays for any remaining costs, such as copayments or deductibles |
| Who decides the payment amount? | Each state’s fee schedule determines the payment amount for each service based on the type of service, the geographic location, and the provider’s specialty |
| Who is liable for payment? | Third-party sources of coverage, such as private insurance, Medicare, other public programs, workers’ compensation, and amounts received for injuries in liability cases |
| Who must follow billing guidelines? | Providers who participate in Medicaid billing |
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What You'll Learn
Medicaid as a secondary payer
Medicaid is a government-run health insurance program that provides coverage for individuals who meet certain eligibility requirements. In most cases, Medicaid acts as the payer of last resort, meaning that it will only cover the costs of healthcare services if no other insurance or coverage is available. This is known as third-party liability (TPL).
When an individual has Medicaid as their primary insurance, but also has additional coverage from another source, such as private insurance or Medicare, Medicaid will pay for any remaining costs that the primary insurer does not cover, such as copayments or deductibles. This is when Medicaid acts as a secondary payer.
It is important to note that Medicaid beneficiaries are required by law to identify all potential third-party sources of coverage and assign the Medicaid agency the right to pursue third-party liability on their behalf. States are also required to take reasonable measures to identify and process claims accordingly. For example, if a Medicaid enrollee has potential third-party coverage when a claim is filed, the state must reject the claim and instruct the provider to submit it to the potential primary payer first. Only after the primary payer has processed the claim can the provider resubmit the claim to Medicaid, which will then pay if the Medicaid payment amount exceeds the primary payment.
There are some exceptions to the rule that Medicaid is the payer of last resort. For example, in certain cases, Medicaid may pay for services that might otherwise be financed by other public agencies or programs, such as prenatal care and preventive pediatric services. In these cases, Medicaid may pay first and then seek reimbursement from the liable third party. Additionally, Medicare is the primary payer for beneficiaries who are not covered by other types of health insurance or coverage.
Overall, the coordination of benefits between Medicaid and other payers can be complex, and it is important for providers to follow the guidelines to ensure accurate and timely payment while avoiding fraud.
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Payment collection from patients
When Medicaid is the secondary insurance, it acts as the payer of last resort, contributing to any remaining medical bills, coinsurance, or copayments after other insurance providers have paid their portions. This is known as third-party liability, or TPL, and means that the responsibility for primary payment falls on any available third-party resources, rather than Medicaid.
In terms of payment collection from patients, after private insurance, Medicare, and Medicaid have each paid their portions, healthcare providers must collect the remaining amount from the patient. Providers can bill the patient for the difference between the Medicaid-approved amount and the actual Medicaid fee schedule amount. It is important to note that there are limits on how much providers can charge, and it is illegal to charge an eligible patient more than the set fee schedule if the services are denied by the insurance. To avoid any chance of fraud, providers must follow Medicaid guidelines closely when collecting payments from participants.
Before providing services, healthcare providers should verify that the services are covered by Medicaid. This can be done by checking the patient's Medicaid card or by using the state's Medicaid website, which provides information on covered services and the circumstances under which they are covered. Plans vary by state, and some states utilize PPO Medicaid, while others use HMO or managed care. It is also important to check if a referral is needed before scheduling a client for a service.
Healthcare providers can choose to bill Medicaid electronically or by paper. To ensure accurate and timely payment, providers must include specific information on claims, such as the place of service, the National Provider Identifier (NPI) for the individual practitioner or organization, the procedures performed, and the diagnoses listed.
It is worth noting that changes in employment, including retirement and changes in health insurance companies, may affect claims payment. Therefore, it is important to inform your doctor, other providers, and the Benefits Coordination & Recovery Center (BCRC) about any changes in your health insurance coverage due to employment changes.
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Avoiding fraud
Medicaid Fraud Control Units (MFCUs) are responsible for investigating and prosecuting Medicaid provider fraud, as well as abuse or neglect of residents in healthcare facilities and board and care facilities. MFCUs operate in each of the 50 states, as well as the District of Columbia, Puerto Rico, and the US Virgin Islands.
Healthcare fraud is not a victimless crime. It affects everyone and causes tens of billions of dollars in losses each year. It can also raise health insurance premiums, expose individuals to unnecessary medical procedures, and increase taxes.
To avoid fraud, healthcare providers must follow guidelines for accurate and timely payment for their services. They should pay close attention to the limits on how much they can charge and follow Medicaid guidelines for collecting payment from participants. It is illegal to charge an eligible patient more than the set fee schedule if the services are denied by the insurance.
Providers can avoid fraud by verifying coverage before providing services. They must include specific information on claims to ensure accurate and timely payment, such as the place of service, the National Provider Identifier (NPI) for the individual practitioner or organization, the procedures performed, and the diagnoses listed.
Individuals should also be cautious of "free" services. If you're asked to provide your health insurance information for a "free" service, the service is probably not free and could be fraudulently charged to your insurance company.
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State Medicaid fee schedule
Medicaid is a health insurance program for people who cannot afford medical care, and it is accepted by most US healthcare providers. Each state has its own Medicaid fee schedule and policies, which are determined by the state's Department of Health and Human Services. These fees are set to ensure fair and prompt reimbursement for healthcare providers.
The Medicaid fee schedule covers a wide range of medical services, including hospital stays, outpatient procedures, prescription drugs, and dental procedures. For example, the Michigan Department of Health and Human Services provides online resources and training sessions for healthcare providers, which cover topics such as Medicaid Provider Training and Infant Oral Health Training. Similarly, Virginia's Department of Medical Assistance Services (DMAS) provides rate-setting information for Medicaid reimbursement, including procedure fee files, CPT codes, and hospital rate information.
To ensure accurate billing and reimbursement, healthcare providers must refer to their state's Medicaid fee schedule and adhere to specific coding and billing guidelines. These guidelines include the use of procedure codes, such as CPT (Current Procedural Terminology) and HCPC (Healthcare Common Procedure Coding System) codes, to standardize the billing process. Additionally, drug reimbursement policies specify that only drugs with National Drug Codes (NDCs) from an approved list of labelers/vendors are reimbursable by Medicaid.
States also have specific programs and policies in place to manage Medicaid payments and reimbursement. For instance, the Hospital Rate-Setting Technical Advisory Committee in New York influences hospital rate-setting for Medicaid Fee-for-Service. Furthermore, states like Michigan offer direct deposit options for provider payments and provide information on contractor rates and requests for proposals. By staying informed about their state's specific Medicaid fee schedule and policies, healthcare providers can effectively navigate the billing and reimbursement process.
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Medicaid as a payer of last resort
Medicaid is often an income-based insurance plan, and most covered individuals do not have a primary insurance provider. In cases where there is primary private insurance, Medicaid serves as the payer of last resort, stepping in only when no other insurance is available to cover the cost of healthcare services.
By law, all other sources of coverage must pay claims under their policies before Medicaid will pay for the care of an eligible individual. This requirement is referred to as third-party liability (TPL), meaning payment is the responsibility of a third party other than the individual or Medicaid. Federal regulations require states to take reasonable measures to identify potentially liable third parties and process claims accordingly. Medicaid enrollees must cooperate with state efforts to pursue other sources of coverage. States must have laws in place that require health insurers to provide their plan eligibility and coverage information to Medicaid programs.
There are four basic approaches to carrying out TPL functions in a managed care environment:
- Enrollees with any other insurance coverage are excluded from enrollment in managed care.
- Enrollees with other insurance coverage are enrolled in managed care, and the state retains TPL responsibilities.
- Enrollees with other insurance coverage are enrolled in managed care, and TPL responsibilities are delegated to the Managed Care Organization (MCO) with an appropriate adjustment of the MCO capitation payments.
- Enrollees and/or their dependents with commercial managed care coverage are excluded from enrollment in Medicaid MCOs, while TPL for other enrollees with private health insurance coverage is retained by the state.
Medicaid also acts as secondary insurance if a patient has both Medicare and Medicaid coverage, as Medicare will generally pay first for the services rendered.
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Frequently asked questions
Medicaid is often an income-based insurance plan, so most covered individuals do not have a primary insurance provider. In cases where there is primary private insurance, Medicaid serves as the payer of last resort, stepping in only when no other insurance is available to cover the cost of healthcare services.
When billing Medicaid, the amount billed has to reflect the total patient responsibility assigned by the primary insurance provider. It is recommended that providers submit secondary claims directly in ePaces (the online portal for Medicaid providers) to be reimbursed for the patient’s cost share of the visit.
Providers who participate in Medicaid billing must follow guidelines for accurate and timely payment for their services and avoid fraud. Medicaid pays health care providers according to a fee schedule that varies by state. Each state’s fee schedule determines the payment amount for each service based on the type of service, the geographic location where the service was provided, and the provider’s specialty.
