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December 2016 Texas Medicaid Provider Procedures Manual

Section 8: Third Party Liability (TPL) : 8.1 Third Party Liability (TPL)

Texas Medicaid Third Party Liability program recovers payments from third parties that are responsible for paying towards a medical claim for services rendered to a Texas Medicaid client. A third party resource (TPR) is the entity, individual, or other source (other than Medicaid, Medicaid managed care organizations (MCOs), Medicaid managed care dental plans, the client, non-TPR sources, or Medicare) that is legally responsible for paying the medical claims of Texas Medicaid clients. The Third Party Liability program helps reduce Medicaid costs by shifting claims expenses to third party payers.
As a condition of eligibility, Medicaid clients assign their rights (and the rights of any other eligible individuals on whose behalf he or she has legal authority under state law to assign such rights) to medical support and payment for medical care from any third party to Medicaid.
Federal and state laws require the use of Medicaid funds for the payment of most medical services only after all reasonable measures have been made to use a client’s TPR or other insurance. To the extent allowed by federal law, a health-care service provider must seek reimbursement from available third party insurance that the provider knows about or should know about before billing Texas Medicaid. Medicaid pays only after the third party has met its legal obligation to pay (i.e., Medicaid is the payer of last resort). All claims submitted for Texas Medicaid payment for clients with other insurance coverage must reference the information, regardless of whether a copy of the explanation of benefits (EOB) from the insurance company is submitted with the claim.
Refer to:
Subsection 7.2, “Refunds to TMHP” in “Section 7: Appeals” (Vol. 1, General Information) for information regarding refunds to TMHP resulting from other insurance payments and conditions surrounding provider billing of third party insurers.
Eligible clients enrolled in private health maintenance organizations (HMOs) must not be charged the co-payment amount because the provider has accepted Medicaid assignment.

Texas Medicaid & Healthcare Partnership
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