How well are States complying with Medicaid’s third-party liability requirements?

Medicaid is a joint federal-state program that provides health coverage to millions of low-income Americans. However, Medicaid is not supposed to pay for services that are covered by other sources, such as private insurance, Medicare, or workers’ compensation. This is known as the third-party liability (TPL) requirement, which ensures that Medicaid functions as the payer of last resort and avoids unnecessary spending.

The Office of Inspector General (OIG) recently conducted an audit of five States (Illinois, Indiana, Michigan, Ohio, and Wisconsin) to assess their compliance with TPL requirements. The OIG found that the States faced ongoing challenges in meeting TPL requirements, such as identifying and verifying other sources of health coverage, collecting and reporting accurate TPL data, and recovering payments from third parties.

The OIG also found that the Centers for Medicare & Medicaid Services (CMS) did not provide adequate guidance, oversight, and technical assistance to the States to help them address these challenges. The OIG recommended that CMS take several actions to improve the States’ TPL performance, such as issuing clarifying guidance, enhancing data quality checks, conducting regular reviews, and providing targeted training and support.

The OIG’s report highlights the importance of ensuring that Medicaid pays only for services that are not covered by other sources. This can help save taxpayer dollars and preserve the program’s fiscal sustainability. The OIG’s recommendations can help CMS and the States improve their TPL processes and outcomes.

How Other Party Liability, Inc. Can Help You Recover Medicaid Overpayments

Medicaid is a joint federal and state program that provides health coverage to millions of Americans who are eligible based on their income, disability, or other factors. However, sometimes Medicaid pays for services that are also covered by another payer, such as a private insurer, Medicare, or a workers’ compensation plan. This results in overpayments that Medicaid is entitled to recover from the other payer. This process is known as third party liability (TPL).

According to a recent report by the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services, the Ohio Department of Medicaid (ODM) did not always identify and recover Medicaid overpayments from other payers. The report found that ODM did not have adequate policies and procedures to ensure that TPL information was accurate and complete, and that overpayments were promptly identified and collected. As a result, ODM missed opportunities to recover an estimated $51.6 million in Medicaid overpayments from other payers in fiscal year 2015.

This is where Other Party Liability, Inc. comes in. We provide TPL services to help state Medicaid agencies identify and recover Medicaid overpayments from other payers. We have the expertise, technology, and resources to handle all aspects of TPL, including:

  • Data matching and verification: We use advanced data analytics and verification techniques to match Medicaid claims with other payer information, and to verify the accuracy and completeness of TPL data.
  • Overpayment identification and recovery: We use sophisticated algorithms and rules to identify potential overpayments, and to pursue recovery from other payers through various methods, such as billing, coordination of benefits, subrogation, and cost avoidance.
  • Reporting and monitoring: We provide comprehensive and timely reports and feedback to our clients on the status and outcomes of TPL activities, and we monitor and evaluate the performance and effectiveness of our TPL services.

By outsourcing TPL services to Other Party Liability, Inc., state Medicaid agencies can benefit from:

  • Increased savings and revenue: We can help state Medicaid agencies recover more Medicaid overpayments from other payers, and reduce the amount of future overpayments, resulting in significant savings and revenue for the state and federal governments.
  • Improved compliance and quality: We can help state Medicaid agencies comply with federal and state laws and regulations regarding TPL, and improve the quality and accuracy of TPL data and processes.
  • Reduced administrative burden and cost: We can help state Medicaid agencies reduce the administrative burden and cost of TPL activities, and free up their staff and resources for other core functions.

If you are interested in learning more about our TPL services, please contact us today. We would love to hear from you and discuss how we can help you recover Medicaid overpayments from other payers.

OPL Inc. to Sponsor and Workshop Leader NOPLG 2019

The National Other Party Liability (NOPLG) conference, scheduled for March 31-April 3, Savannah, GA. The NOPLG annual educational seminars are open to BCBS employees, BCBS subsidiary employees and BCBS OPL contractors. NOPLG brings together participants for workshops, networking, and discussion of issues involving Coordination of Benefits, Subrogation, Workers’ Compensation, Medicare Secondary Payer, OPL Management and Overpayment Identification and Recovery. For more information visit

Medicaid TPL Rights Postponed

In 2006 the United States Supreme Court decided Ahlborn v. Arkansas 547 U.S. 268 (2006). There, the Court in interpreting Medicaid’s long standing statutory rights of recovery held that from an unallocated third party settlements, Medicaid was only entitled to recover that portion of  an unallocated settlement that represented past medicals.  Thus extinguishing Medicaid’s long standing, automatic right to first dollar and full recovery.  This ruling has caused an allocation to be required in almost every Medicaid Third party case.  Medicaid’s statutory lien now no longer automatically attaches to the entirety of every settlement.

The aftermath of Ahlborn has resulted in a significant drop in Medicaid tort recoveries to the Medicaid system.  Plaintiff attorneys instead of being obligated to reimburse Medicaid are now obligated to advocate favorable allocations for their clients.  This has caused huge disputes and potential abuses where settlements are made either without recognizing medical losses or where allocations are made which force Medicaid to continue paying claims while large portions of settlements are allocated to other non-economic damages.

The general thought being that since Medicaid as an entitlement program funded by taxpayers, if there was a settlement payable by a liable third party,  any settlement  recoveries should first reimburse Medicaid, thus lowering the burden on Medicaid and taxpayers.

In the Bipartisan Budget Act of 2013, President Obama amended portions of  the States obligations regarding Medical Assistance (42 U.S.C. 1396a) to clarify the pre Ahlborn interpretation of the  law that Medicaid should be entitled  to a first recovery from any responsible third party and from any and all third party monies available as a result of a liability settlement. The clarifying amendments were supposed to take effect on October 1, 2015 , that effective date was later delayed 2 years until October 1, 2017.

On February 9, 2018 President Trump signed the Balanced Budget Act of 2018 and on page 599 enacted a third postponement until October 1, 2019.  ( see Act below)


Hopefully in the next 8 months congress will do the fiscally responsible thing and allow Medicaid to return to its pre Ahlborn 2006 first dollar recovery rights.


The Budget Act provided:


16 CHIP.

6 (1) REPEAL.—Effective as of September 30,
7 2017, subsection (b) of section 202 of the Bipartisan
8 Budget Act of 2013 (Public Law 113–67; 127 Stat.
9 1177; 42 U.S.C. 1396a note) (including any amend10
ments made by such subsection) is repealed and the
11 provisions amended by such subsection shall be ap12
plied and administered as if such amendments had
13 never been enacted.
14 (2) DELAY IN EFFECTIVE DATE.—Subsection (c)
15 of section 202 of the Bipartisan Budget Act of 2013
16 (Public Law 113–67; 127 Stat. 1177; 42 U.S.C.
17 1396a note) is amended to read as follows:
18 ‘‘(c) EFFECTIVE DATE.—The amendments made by
19 subsection (a) shall take effect on October 1, 2019.’’.


PA Proposes New Rule Safekeeping of Property to Help Subrogors

A proposal to amend one of the comments to  Rule 1.15 regarding safeguarding property of third parties was published May 14, 2016, at 46 Pa.B. 2407. Under the current language, the comment states that a lawyer must hold third-party funds intact when “the third party claim is not frivolous under applicable law.” The revised comment would eliminate that language and require that a lawyer keep the funds whenever “a letter of protection has been issued by an attorney or a lien on the funds exists under applicable law.” The revised comment requires a greater degree of diligence in maintaining third-party funds until their ownership is determined.

CMS issues final rule on Conditional Payment Appeals

Effective April 28, 2015 there are new rules regarding the right of appeal for MSP Conditional Payment determinations relating to liability insurance, No fault and Workman’s Compensation carriers.  These regulations promulgated as a result to the SMART act of 2012 detail the appeal process that may be used by liability carriers, No Fault Carriers and WC carriers when they receive demands for reimbursement for Medicare funds. see the rule here: