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Rule Title: THIRD PARTY LIABILITY
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Department: PUBLIC HEALTH AND HUMAN SERVICES, DEPARTMENT OF
Chapter: GENERAL MEDICAID SERVICES
Subchapter: Provider Requirements
 
Latest version of the adopted rule presented in Administrative Rules of Montana (ARM):

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37.85.407    THIRD PARTY LIABILITY

(1) No payment shall be made by the department for any medical service for which there is a known third party who has a legal liability to pay for that medical service except for those services specified in (6) below.

(2) For purposes of this section, the following definitions apply:

(a) A third party is defined as an individual, institution, corporation, or public or private agency that is or may be liable to pay all or part of the cost of medical treatment and medical-related services for personal injury, disease, illness, or disability of a recipient of medical assistance from the department or a county and includes but is not limited to insurers, health service organizations, and parties liable or who may be liable in tort. Indian health services is not a third party within the meaning of this definition.

(b) A known third party is a third party for which the provider has sufficient information to submit a claim and which if billed for a medical service is likely to pay the claim within a reasonable time.

(c) A potential third party is a third party for which the provider either has insufficient information to submit a claim or which if billed for a medical service, is likely to deny the claim as having no contractual or legal obligation to pay.

(3) For known recipients, the provider shall use its same usual and customary procedures for inquiring about possible third party resources as is done for non-recipients.

(4) If the provider delivers to a recipient or a recipient's legal representative a copy of a billing statement for services which have been or may be billed to the department, the statement must clearly indicate that third party benefits or payments have been assigned to the department by the patient or that the department may have a lien upon such benefits.

(a) The words "Medicaid has assignment of, or may have a lien upon third party benefits or payments" shall be sufficient to meet the notification requirement of this section.

(b) If a provider does not meet the notification requirements of this section, the department may withhold or recover from the provider an amount equal to any amounts paid by a third party towards the services described in the statement given to the recipient.

(5) If a provider learns of the existence of a known third party, that provider shall bill the third party prior to billing the department. If the department has knowledge of a known third party and the provider has not complied with (6) or (7) below, the department shall deny payment of the services.

(6) The department shall not deny payment of services solely because of the existence of a third party in the following circumstances:

(a) The primary diagnosis on the claim is for certain prenatal and preventive pediatric care as specified in the Medicaid provider manual, copies of which may be obtained from the Montana Department of Public Health and Human Services, Health Policy and Services Division, 1400 Broadway, P.O. Box 202951, Helena, MT 59620-2951. The provider may bill the third party or the department in this circumstance.

(b) The third party is an insurer under a health insurance policy provided by the absent parent of a recipient and that health insurance is obtained or maintained as a result of an enforcement action taken by the child support enforcement division against that absent parent, if the following provisions are met:

(i) the provider submits evidence that the third party has been billed;

(ii) the claim is submitted to the department 30 or more days beyond the date of service and in compliance with the timely filing rules in ARM 37.85.406(1);

(iii) the provider certifies on the claim that notice of payment or denial of the claim has not been received from the third party; and

(iv) the claim is submitted directly to the third party liability unit (hereafter referred to as the TPL unit) within the department.

(c) The provider has billed the third party and has not received a reply from the third party either allowing or denying payment, if the following provisions are met:

(i) the provider submits evidence of the date the third party was billed;

(ii) the claim is submitted 90 or more days beyond the date established in (c)(i) and in compliance with the timely filing rules in ARM 37.85.406(1);

(iii) the provider certifies on the claim that notice of payment or denial has not been received; and

(iv) the provider submits the claim directly to the TPL unit.

(d) The claim is for services for which the department has been granted a waiver from use of the cost avoidance method and the department has chosen to use and continue to use that waiver, as identified in the Medicaid provider manual.

(e) The provider is unable to obtain a valid assignment of benefits, if the following provisions are met:

(i) the provider submits documentation that it attempted to obtain assignment;

(ii) the provider certifies on the claim that assignment could not be obtained; and

(iii) the provider submits the claim directly to the TPL unit.

(f) The third party is only a potential third party as defined in (2)(c).

(7) Except as stated in (8), the department shall pay its allowed amount for services, less any known third party payments for those services, for any claim where a known third party exists in the following circumstances:

(a) the claim is submitted under the provisions of (6);

(b) the submitted claim clearly indicates the amount paid by the third party and includes whatever documentation is received regarding the payment from the third party; or

(c) the claim is submitted with a denial document which clearly shows that the third party denied the claim.

(8) For inpatient hospital claims where Medicare Part A benefits have been paid, the department's sole obligation shall be to pay the Medicare Part A deductible. For nursing facility service claims where Medicare Part A benefits have been paid, the department's sole obligation shall be to pay in accordance with ARM 37.40.307.

(9) In the event the provider receives a payment from a third party after the department has made payment, the provider shall refund to the department, within 60 days of receipt of the third party payment, the lesser of the amount the department paid or the amount of the third party payment.

(a) The refund shall be made payable to Montana Medicaid and submitted to the department's fiscal office, and shall indicate the name of the third party payor.

(b) The provider is entitled to retain any third party payments which exceed the Medicaid allowed amount if all Medicaid payments toward those services have been refunded to the department as required in this subsection.

(10) The department shall make no payment for services in those cases where, if the patient were not a Medicaid recipient, the third party payment would constitute full payment with no further obligation owing from the recipient.

(11) For any service where an identified third party has only a potential liability as a tort-feasor, the provider may file a medical lien against that third party. The provider may bill the department prior to determination of liability of the third party if the provider notifies the TPL unit of the identity of the third party and its name and address if known. The provider may keep its lien in place and receive payment from the third party. If payment is received from the third party, the provider must refund to the department as described in (9).

(12) A provider may not refuse to furnish services to a recipient based upon a third party's potential liability for the service.

History: 53-6-113, MCA; IMP, 53-2-201, 53-6-101, 53-6-111, 53-6-113, 53-6-141, MCA; NEW, 1980 MAR p. 1491, Eff. 5/16/80; AMD, 1984 MAR p. 1637, Eff. 11/16/84; AMD, 1990 MAR p. 1719, Eff. 8/31/90; AMD, 1997 MAR p. 474, Eff. 3/11/97; TRANS, from SRS, 2000 MAR p. 479.


 

 
MAR Notices Effective From Effective To History Notes
3/11/1997 Current History: 53-6-113, MCA; IMP, 53-2-201, 53-6-101, 53-6-111, 53-6-113, 53-6-141, MCA; NEW, 1980 MAR p. 1491, Eff. 5/16/80; AMD, 1984 MAR p. 1637, Eff. 11/16/84; AMD, 1990 MAR p. 1719, Eff. 8/31/90; AMD, 1997 MAR p. 474, Eff. 3/11/97; TRANS, from SRS, 2000 MAR p. 479.
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