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Third Party Liability. HP Provider Relations October 2010. Agenda. Objectives Third Party Liability (TPL) Overview TPL Program Responsibilities Identifying TPL Resources Cost Avoidance Claims Processing Requirements TPL Update Procedures Disallowance Projects Questions & Answers.

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Third party liability
Third Party Liability

HP Provider Relations

October 2010



Third Party Liability (TPL) Overview

TPL Program Responsibilities

Identifying TPL Resources

Cost Avoidance

Claims Processing Requirements

TPL Update Procedures

Disallowance Projects

Questions & Answers


Define TPL

Explain the responsibilities of the TPL program

Provide information on the sources of TPL information

Give an overview of TPL claim processing requirements

Illustrate how TPL information is updated

Answer any questions that may arise during the presentation


Third Party Liability

Introduction to third party liability tpl
Introduction to Third Party Liability – TPL

Private insurance coverage does not preclude an individual from having Indiana Health Coverage Programs (IHCP) benefits

The IHCP supplements other available coverage

The IHCP is responsible for paying only the State plan authorized medical expenses that other insurance does not cover

TPL may be:

  • A commercial group plan through the member’s employer

  • An individually purchased plan

  • Medicare

  • Insurance available as a result of an accident or injury

Ihcp payer of last resort
IHCP – Payer of Last Resort

Federal regulation (42 CFR 433.139) establishes the IHCP as the payer of last resort


  • Victim Assistance

  • First Choice

  • Children’s Special Health Care Services (CSHCS)

    • These programs are secondary to Medicaid because they are fully funded by the State

Tpl program responsibilities
TPL Program Responsibilities

The IHCP TPL Program supports compliance with federal and state TPL regulations and has two primary purposes:

  • Identify IHCP members who have TPL resources available

  • Ensure that those resources pay before the IHCP

Identifying tpl resources
Identifying TPL Resources

The TPL Program has five primary sources of information to identify members who have other health insurance:

  • Caseworkers/Division of Family Resources (DFR)

    • Member TPL information is updated in Indiana Client Eligibility System (ICES) and transferred to IHCP

  • Providers

    • Providers can report TPL information in writing, by telephone call, via Web interChange, or by information submitted on claim forms

  • Data Matches

    • Data matches are performed with all major insurance companies and reported to the IHCP

  • Hoosier Healthwise Managed Care Entity (MCEs)

    • MCEs report information about members enrolled in their networks

  • Medicaid Third Party Liability Questionnaire

    • Providers and members may complete the questionnaire and e-mail, fax, or mail to the HP TPL Unit

Cost avoidance
Cost Avoidance

When a provider determines a member has a TPL resource, that resource must be billed first

If the provider bills the IHCP without proper documentation that the TPL was billed first, the claim will deny

This process is known as cost avoidance

Services exempt from tpl cost avoidance
Services Exempt from TPL Cost Avoidance

Pregnancy care

Prenatal care

Preventative pediatric care, including Early and Periodic Screening, Diagnosis, and Treatment (EPSDT/HealthWatch)

Medicaid Rehabilitation Option (MRO)

Home and Community-Based Waiver services

State psychiatric hospitals

Procedure codes listed on Medicare Bypass Table

  • Some of the diagnosis and procedure codes that are exempt from cost avoidance are listed in the IHCP Provider Manual, Chapter 5, Section 2

Services rendered by out of network providers
Services Rendered by Out-of-Network Providers

The IHCP requires that a member follow the rules of the primary insurance carrier

The IHCP does not reimburse for services rendered out of another plan’s network

  • Exception: Court-ordered services, such as alcohol or drug rehabilitation

    If the primary carrier pays for out-of-network services, the IHCP may be billed

Liability insurance
Liability Insurance

Liability insurance generally reimburses Medicaid for claim payments only under certain circumstances

  • Example: Auto or homeowner’s policies where liability is established

    Due to the circumstantial nature of this coverage, the IHCP does not cost avoid claims based on liability coverage

    If a provider is aware that a member has been in an accident, the provider may bill the IHCP or pursue payment from the liable party (the provider is encouraged to bill the third party first)

    If the IHCP is billed, the provider must indicate that the claim is for accident-related services

    When the IHCP pays accident-related claims, postpayment research is conducted to identify cases with potentially liable third parties

Liability insurance1
Liability Insurance

When third parties are identified, the IHCP presents all paid claims associated with the accident to the third party for reimbursement

Providers are not normally involved in or aware of this recovery process

Providers are encouraged to report all identified TPL cases to the HP TPL Casualty Unit

  • Notify the TPL Casualty Unit if a request for medical records is received by an IHCP member’s attorney regarding a personal injury claim

    Contact information:

    HP TPL Casualty Unit

    P.O. Box 7262

    Indianapolis, IN 46207-7262

    Telephone (317) 488-5046 or 1-800-457-4510

Tpl credit balance letters and worksheets
TPL Credit Balance Letters and Worksheets

HP partners with HMS to collect credit balances due to the IHCP

HMS mails letters and credit balance worksheets to select providers quarterly

Refunds are due 60 days from the date of the letter

Adjustments are processed weekly for providers that want credit balances subtracted from future payments

Although letters are sent to selected providers, the credit balance worksheets can be used by any provider to return overpayments

Contact HMS Provider Relations at 1-877-264-4854 with questions

Credit Balance Worksheets and instructions are available at

Medicare buy in overview
Medicare Buy-in Overview

Allows states to pay Part B Medicare premiums for dually eligible members (members eligible for both Medicaid and Medicare)

Automated data exchanges between HP and the Centers for Medicare & Medicaid Services (CMS) are conducted daily to identify, update, resolve differences, and monitor new and ongoing Medicare buy-in cases

Medicare buy in overview1
Medicare Buy-in Overview

  • The state is responsible for initiating Medicare buy-in for eligible members and HP coordinates Medicare buy-in resolution with CMS

  • Medicare is generally the primary payer

    • Payment of Medicare premiums, coinsurance, and deductibles cost less than Medicaid benefits

    • States receive Federal Financial Participation (FFP) for premiums paid for members eligible as:

      • Qualified Medicare beneficiary (QMB)

      • Qualified disabled working individual (QDWI)

      • Specified low-income Medicare beneficiary (SLMB)

      • Money grant members Social Security Income (SSI)

      • Qualified individual (QI-1)

Medicare buy in qualified medicare beneficiary
Medicare Buy-in – Qualified Medicare Beneficiary

  • QMB-Only

    • The member’s benefits are limited to payment of the member’s Medicare Part A and Part B premiums, as well as deductibles and coinsurance for Medicare covered services

    • Claims for services not covered by Medicare are denied as Medicaid non-covered services

    • The member should be notified in advance if services will not be covered, and if they still want to have the service provided they should sign a waiver acknowledging they understand they will be billed

  • QMB-Also

    • The member’s benefits include payment of the member’s Medicare Part A and Part B premiums, deductibles and coinsurance, as well as traditional Medicaid benefits


Claims processing requirements

Tpl claims processing requirements
TPL Claims Processing Requirements

Prior to rendering service, the provider must verify Medicaid eligibility using the Eligibility Verification System (EVS) options:

  • Web interChange

  • Omni

  • AVR (Automated Voice Response system)

    The EVS should also be used to verify TPL information to determine if another insurance is liable for the claim

    The EVS contains the most current TPL information, including health insurance carrier, benefit coverage, and policy numbers on file with the IHCP

TPL identification

Tpl claims processing requirements1
TPL Claims Processing Requirements

If a service requires prior authorization by the IHCP, that requirement must be satisfied, even if a third party has paid or will pay a portion of the charge

Therefore, a provider may have to obtain prior authorization from the third party and from the IHCP


  • Medicare Part A or Part B covered charges

Prior authorization

Tpl claims processing requirements2
TPL Claims Processing Requirements

When submitting claims, the amount paid by the third party must be entered in the appropriate field on the claim form or electronic transaction, even if the TPL payment is zero

If a third party made a payment, the explanation of benefit (EOB) is not required

If the primary insurance denies payment, or applies the payment in full to the deductible, a copy of the denial EOB must be attached to the claim

  • If the claim is submitted electronically via Web interChange, the EOB may be submitted by using the "Attachment" feature

Billing procedures

Tpl claims processing requirements3
TPL Claims Processing Requirements

The IHCP payment will be the total Medicaid "allowable" amount, minus what was paid by the primary insurance

If the primary insurance payment is equal to or greater than the total Medicaid "allowable" amount, the IHCP payment will be zero

  • The member cannot be billed for any remaining balance, or copayments/ deductibles (refer to 405 IAC 1-1-3 (I))

Billing procedures

Tpl claims processing requirements4
TPL Claims Processing Requirements

When a service that is repeatedly furnished to a member and repeatedly billed to the IHCP is not covered by a third-party insurer, a photocopy of the original denial EOB can be used for the remainder of the calendar year

This eliminates unnecessary billing to the third-party insurer

The provider should write "BLANKET DENIAL" on the original denial EOB and at the top of the claim form

The denial reason must relate to the specific services and time frame of the new claim

Blanket denials

Tpl claims processing requirements5
TPL Claims Processing Requirements

Claims denying for TPL reasons will have one of the following edits:

  • 2500 – Recipient covered by Medicare A – no attachment

  • 2501 – Recipient covered by Medicare A – with attachment

  • 2502 – Recipient covered by Medicare B – no attachment

  • 2503 – Recipient covered by Medicare B – with attachment

  • 2504 – Recipient covered by private insurance – no attachment

  • 2505 – Recipient covered by private Insurance – with attachment

  • 2510 – Recipient covered by Medicare D

Remittance Advice information

Tpl claims processing requirements6
TPL Claims Processing Requirements

When a third-party payer fails to respond within 90 days of a provider’s billing date, the provider can submit the claim to the IHCP

Attach one of the following to the claim:

  • Copies of unpaid bills or statements sent to the insurance company

  • Written notification from the provider indicating the billing dates and explaining the third-party failed to respond within 90 days

    Boldly indicate the following on the attachments:

  • Date of the filing attempts


  • Member identification number (RID #)

  • Provider’s NPI number

  • Name of TPL billed

    90-Day No Response claims may be submitted on Web interChange using the "Notes" feature

  • Provide the same information above, as on paper attachments

Third-party payer fails to respond (90-day provision)

Tpl claims processing requirements7
TPL Claims Processing Requirements

When the insurance carrier reimburses the member:

  • Request the member to forward the payment to the provider, or if necessary:

    • Notify the insurance carrier the payment was made to the member in error and request the payment be reissued to the provider

    • If unsuccessful, document the attempts made and submit the claim to the IHCP under the 90-day provision

      In future visits with the member, request the member sign an "assignment of benefits" authorization form

      Submit the assignment of benefits with the next claim to the insurance carrier

      Providers may report the member to the State contractor if member fraud is suspected

  • Telephone: Member 1-800-446-1993 Provider 1-800-382-1039

Insurance carrier reimburses IHCP member

Tpl claims processing requirements8
TPL Claims Processing Requirements

What if a third party or the member makes payment after IHCP has paid the claim?

  • The provider should submit a replacement claim via Web interChange or use the paper adjustment form


  • The provider can use the credit balance reporting process administered by HMS

TPL payments received after IHCP payments


TPL update procedures

Tpl update procedures
TPL Update Procedures

Providers can update TPL information via Web interChange

From Eligibility Inquiry screen, Third Party Carrier Information section, click TPL Update Request

Enter all information about TPL, including "Comments"

HP TPL Unit will verify and update information within 20 business days

TPL update request on Web interChange

Tpl update procedures1
TPL Update Procedures

The caseworker or State eligibility worker enters TPL information into ICES when members enroll in Medicaid

This information is transmitted nightly to IndianaAIM and WebinterChange

Providers that receive TPL information that is different from what is in Web interChange should immediately report the information to the TPL Unit

Division of Family Resources (DFR)

Tpl update procedures2
TPL Update Procedures

When forwarding updated TPL information to the TPL Unit, include the member’s RID # and any other pertinent data

  • Remittance Advice (RA), Explanation of Benefits (EOB), carrier letters

    Send updated TPL information to:

    HP TPL Unit

    Third Party Liability Update

    P.O. Box 7262

    Indianapolis, IN 46207-7262

    Telephone : (317) 488-5046 or 1-800-457-4510

    Fax: (317) 488-5217

General update procedures

Tpl update procedures3
TPL Update Procedures

The questionnaire is available at the "Forms" link at

The completed questionnaire can be e-mailed to

Medicaid Third Party Liability Questionnaire


TPL disallowance projects

Tpl disallowance projects
TPL Disallowance Projects

How the disallowance projects work:

  • IHCP identifies Medicaid paid claims that should have been billed to Medicare as primary

  • IHCP will send listings of paid Medicaid claims to providers with instructions asking them to bill Medicare for the claims paid by Medicaid and respond within 60 days

  • Providers are to report back to IHCP within 60 days by submitting a Credit Balance Worksheet and to notify Medicaid as to which claims have been paid by Medicare and which have been denied


Tpl disallowance projects1
TPL Disallowance Projects

How the Commercial Insurance disallowance projects work:

  • Focus is on hospital providers

  • IHCP identifies Medicaid paid claims that should have been billed to commercial carriers

  • IHCP will send listings of paid Medicaid claims to providers with instructions asking them to bill the commercial carriers for the claims paid by Medicaid and respond within 60 days

  • Providers are to report back to IHCP within 60 days and notify Medicaid as to which claims have been paid by the commercial carrier and which have been denied

Commercial insurance

Find help
Find Help

Resources Available

Helpful tools
Helpful Tools

Avenues of resolution

IHCP Web site at

IHCP Provider Manual (Web, CD-ROM, or paper)

  • Chapter 5 – Third Party Liability

    Customer Assistance

  • Local (317) 655-3240

  • All others 1-800-577-1278

    Written Correspondence

  • HP Provider Written CorrespondenceP. O. Box 7263Indianapolis, IN 46207-7263

    Provider field consultant

    TPL Department - (317) 488-5046; (800) 457-4510