[Code of Federal Regulations]

[Title 42, Volume 4]

[Revised as of October 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 42CFR433.139]



[Page 100-102]

 

                         TITLE 42--PUBLIC HEALTH

 

  CHAPTER IV--CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF 

                  HEALTH AND HUMAN SERVICES (CONTINUED)

 

PART 433_STATE FISCAL ADMINISTRATION--Table of Contents

 

                     Subpart D_Third Party Liability

 

Sec.  433.139  Payment of claims.



    (a) Basic provisions. (1) For claims involving third party liability 

that are processed on or after May 12, 1986, the agency must use the 

procedures specified in paragraphs (b) through (f) of this section.

    (2) The agency must submit documentation of the methods (e.g., cost 

avoidance, pay and recover later) it uses for payment of claims 

involving third party liability to the CMS Regional Office.

    (b) Probable liability is established at the time claim is filed. 

Except as provided in paragraph (e) of this section--

    (1) If the agency has established the probable existence of third 

party liability at the time the claim is filed, the agency must reject 

the claim and return it to the provider for a determination of the 

amount of liability. The establishment of third party liability takes 

place when the agency receives confirmation from the provider or a third 

party resource indicating the extent of third party liability. When the 

amount of liability is determined, the agency must then pay the claim to 

the extent that payment allowed under the agency's payment schedule 

exceeds the amount of the third party's payment.

    (2) The agency may pay the full amount allowed under the agency's 

payment schedule for the claim and then seek reimbursement from any 

liable third party to the limit of legal liability if the claim is for 

labor and delivery and postpartum care. (Costs associated with the 

inpatient hospital stay for labor and delivery and postpartum care must 

be cost-avoided.)

    (3) The agency must pay the full amount allowed under the agency's 

payment schedule for the claim and seek reimbursement from any liable 

third party to the limit of legal liability (and for purposes of 

paragraph (b)(3)(ii) of this section, from a third party, if the third 

party liability is derived from an absent parent whose obligation to pay 

support is being enforced by the State title IV-D agency), consistent 

with paragraph (f) of this section if--

    (i) The claim is prenatal care for pregnant women, or preventive 

pediatric services (including early and periodic screening, diagnosis 

and treatment services provided for under part 441, subpart B of this 

chapter), that is covered under the State plan; or

    (ii) The claim is for a service covered under the State plan that is 

provided to an individual on whose behalf child support enforcement is 

being carried out by the State title IV-D agency. The agency prior to 

making any payment under this section must assure that the following 

requirements are met:

    (A) The State plan specifies whether or not providers are required 

to bill the third party.

    (B) The provider certifies that before billing Medicaid, if the 

provider has billed a third party, the provider has waited 30 days from 

the date of the service and has not received payment from the third 

party.

    (C) The State plan specifies the method used in determining the 

provider's compliance with the billing requirements.



[[Page 101]]



    (c) Probable liability is not established or benefits are not 

available at the time claim is filed. If the probable existence of third 

party liability cannot be established or third party benefits are not 

available to pay the recipient's medical expenses at the time the claim 

is filed, the agency must pay the full amount allowed under the agency's 

payment schedule.

    (d) Recovery of reimbursement. (1) If the agency has an approved 

waiver under paragraph (e) of this section to pay a claim in which the 

probable existence of third party liability has been established and 

then seek reimbursement, the agency must seek recovery of reimbursement 

from the third party to the limit of legal liability within 60 days 

after the end of the month in which payment is made unless the agency 

has a waiver of the 60-day requirement under paragraph (e) of this 

section.

    (2) Except as provided in paragraph (e) of this section, if the 

agency learns of the existence of a liable third party after a claim is 

paid, or benefits become available from a third party after a claim is 

paid, the agency must seek recovery of reimbursement within 60 days 

after the end of the month it learns of the existence of the liable 

third party or benefits become available.

    (3) Reimbursement must be sought unless the agency determines that 

recovery would not be cost effective in accordance with paragraph (f) of 

this section.

    (e) Waiver of requirements. (1) The agency may request initial and 

continuing waiver of the requirements in paragraphs (b)(1), (d)(1), and 

(d)(2) of this section, if it determines that the requirement is not 

cost-effective. An activity would not be cost-effective if the cost of 

the required activity exceeds the third party liability recoupment and 

the required activity accomplishes, at the same or at a higher cost, the 

same objective as another activity that is being performed by the State.

    (i) The agency must submit a request for waiver of the requirement 

in writing to the CMS regional office.

    (ii) The request must contain adequate documentation to establish 

that to meet a requirement specified by the agency is not cost-

effective. Examples of documentation are costs associated with billing, 

claims recovery data, and a State analysis documenting a cost-effective 

alternative that accomplishes the same task.

    (iii) The agency must agree, if a waiver is granted, to notify CMS 

of any event that occurs that changes the conditions upon which the 

waiver was approved.

    (2) CMS will review a State's request to have a requirement 

specified under paragraph (e)(1) of this section waived and will request 

additional information from the State, if necessary. CMS will notify the 

State of its approval or disapproval determination within 30 days of 

receipt of a properly documented request.

    (3) CMS may rescind the waiver at any time that it determines that 

the State no longer meets the criteria for approving the waiver. If the 

waiver is rescinded, the agency has 6 months from the date of the 

rescission notice to meet the requirement that had been waived.

    (4) An agency requesting a waiver of the requirements specifically 

concerning either the 60-day limit in paragraph (d)(1) or (d)(2) of this 

section must submit documentation of written agreement between the 

agency and the third party, including Medicare fiscal intermediaries and 

carriers, that extension of the billing requirement is agreeable to all 

parties.

    (f) Suspension or termination of recovery of reimbursement. (1) An 

agency must seek reimbursement from a liable third party on all claims 

for which it determines that the amount it reasonably expects to recover 

will be greater than the cost of recovery. Recovery efforts may be 

suspended or terminated only if they are not cost effective.

    (2) The State plan must specify the threshold amount or other 

guideline that the agency uses in determining whether to seek recovery 

of reimbursement from a liable third party, or describe the process by 

which the agency determines that seeking recovery of reimbursement would 

not be cost effective.

    (3) The State plan must also specify the dollar amount or period of 

time for



[[Page 102]]



which it will accumulate billings with respect to a particular liable 

third party in making the decision whether to seek recovery of 

reimbursement.



[50 FR 46665, Nov. 12, 1985, as amended at 51 FR 16319, May 2, 1986; 60 

FR 35503, July 10, 1995; 62 FR 23140, Apr. 29, 1997]