DCS Comprehensive Health Plan

Coordination of Benefits (COB) and Third Party Liability (TPL)

Statement/Purpose

This policy stipulates the requirements for the cost avoidance of claims submitted to the DCS Comprehensive Health Plan (CHP).

Definitions

Coordination of Benefits (COB): the activities involved in determining Medicaid benefits when a member has coverage through an individual, entity, insurance, or program that is liable to pay for healthcare services.

Cost Avoidance: The process of identifying and utilizing all confirmed sources of first or third-party benefits before payment is made by the Contractor

Managed Care Organization (MCO): A health plan which is focused on quality care while maximizing fiscal efficiencies to reduce healthcare costs.

Third Party Liability (TPL): the legal obligation of third parties (i.e. certain individuals, entities, insurers, or programs) to pay part or all of the expenditures for medical assistance furnished under CHP

Policy

DCS CHP is a source of payment for covered services only after all other sources of payment have been exhausted. DCS CHP identifies potentially legally liable third-party sources as set forth in the AHCCCS Contractor Operations Manual (ACOM), Policy 434, Coordination of Benefits and Third-Party Liability.

DCS CHP is the payer of last resort, however, if the existence of Coordination of Benefits (COB) cannot be established, or COB benefits are not available to pay a given claim at the time DCS CHP receives the claim, DCS CHP’s contracted MCO processes the claim and applies cost-avoidance rules to all covered services with the exception of preventative pediatric services. DCS CHP’s contracted MCO cost-avoids a claim if there is established existence of a liable party at the time the claim is filed.

Establishing liability takes place when DCS CHP receives confirmation that another party is, by statute, contracted or agreement, legally responsible for the payment of a claim for a healthcare item or service delivered to a member. If the probable existence of a party’s liability cannot be established, DCS CHP’s contracted MCO adjudicates the claim.

DCS CHP’s contracted MCO communicates any known change in health insurance, including Medicare, to AHCCCS no later than 10 days from the date of discovery using the AHCCCS approved correspondence. This information is recorded in DCS CHP’s Health Management System and is obtained weekly by AHCCCS.

DCS CHP and its contracted MCO follows AHCCCS Medicare Cost Sharing Policy as listed in the AHCCCS Contractor Operations Manual (ACOM). Qualified Medicare Beneficiary (QMB) Duals are entitled to all AHCCCS and Medicare Part A and B covered services. DCS CHP’s contracted MCO is required to pay Medicare cost sharing regardless of prior authorization and networks.

Procedure

In accordance with the AHCCCS Program Integrity Reporting Guide, DCS CHP prepares a Cost Avoidance/Recovery Report on a quarterly basis.

Trauma Codes

If a DCS CHP member is involved in a motor vehicle accident, DCS Finance and DCS CHP’s contracted MCO reports the details of the accident, within 30 days of notification, in writing to the Health Management System. DCS CHP’s contracted MCO obtains this information by researching trauma diagnosis codes. The Health Management System researches these cases to determine if Third Party Liability (TPL) exists and sends the results to the DCS CHP Finance function area. If the cases are identified by the Health Management System of having TPL, the DCS Finance Unit researches to determine if DCS CHP has received reinsurance payments and reports same to AHCCCS.

Lien Process

When TPL exists and DCS CHP’s contracted MCO has already paid a member’s claim, the DCS Finance Unit sends a letter to the insurance carrier or an attorney representing the insurance company or dependent to recover DCS CHP’s payment. For total plan cases involving only payments made by DCS CHP’s contracted MCO, DCS CHP and its contracted MCO are responsible for performing all research, investigation and mandatory filing of initial liens on cases that exceed $250, lien amendments, lien releases and payment of other related costs.

Post-Payment Recovery

Post payment recovery is necessary when DCS CHP has not established the probable existence of a liable party at the time services were paid. DCS CHP’s contracted MCO follows the AHCCCS Contractor Operations Manual (ACOM), Policy 412, for claims recoupment. DCS CHP’s contracted MCO voids encounters for claims that are recouped in full and submits replacement encounters for claims that are adjusted.