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H06 -076- Procedure
October 30, 2006
|TO: |Home and Community Services (HCS) Division Regional Administrators |
| |Area Agency on Aging (AAA) Directors |
| |Division of Developmental Disabilities (DDD) Regional Administrators |
|FROM: |Bill Moss, Director, Home and Community Services Division |
| |Linda Rolfe, Director, Division of Developmental Disabilities |
|SUBJECT: |THIRD PARTY LIABILITY (TPL) AND NURSING FACILITY BILLING POLICY UPDATE |
|Purpose: |To inform staff that nursing facilities must bill third party insurance carriers prior to billing Medicaid. |
|Background: |DSHS has allowed nursing facilities to bill the state for Medicaid clients even when the client has third party |
| |liability (TPL) insurance that will cover at least part of the cost of care. The state paid the nursing facility |
| |for the client’s care and then sought payment from the insurance companies. This system was referred to as “pay |
| |and chase”. |
|What’s new, changed, or |The Federal Centers for Medicare and Medicaid Services (CMS) informed the State of Washington that the “pay and |
|Clarified |chase” strategy will no longer be allowed effective January 1, 2007. Beginning April 1, 2006 the state changed |
| |this policy. Nursing facilities will be responsible for collecting payments from TPL carriers or obtaining a |
| |denial of benefits before DSHS can pay the facilities. The department has been implementing the new policy for |
| |insurance carriers in three phases. |
| | |
| |MB H06- 023, CHANGE IN THIRD PARTY LIABILITY (TPL) AND NURSING FACILITY BILLING POLICY, provided the list of the |
| |first group of insurance carriers. |
| | |
| |A second letter was sent to nursing facilities on August 29 with the list of insurance carrier types that were |
| |changed to the new procedures effective September 1, 2006. The third and last letter was sent October 25 with an |
| |updated list of frequently asked questions (FAQ’s) and responses. (Both letters and the FAQs are attached on page 3|
| |of this MB.) |
| | |
| | |
| | |
| | |
| |The insurance carrier types changed to the new procedures effective September 1, 2006 are: |
| |AARP; |
| |Blue Cross; |
| |Blue Shield; |
| |Blue Cross/Blue Shield; |
| |Regence; |
| |United Healthcare; and |
| |All county insurance carriers. |
| | |
| |The insurance carrier types changed to the new procedures effective November 1, 2006 are: |
| |Aetna |
| |Cigna, and |
| |Any other insurance carrier that had not previously moved to cost avoidance |
| | |
| |The Coordination of Benefits (COB) unit of the Health and Recovery Services Administration (HRSA) mailed out an |
| |updated copy of the Cost Avoidance Suggestions and Helpful Hints document that contains instructions on the |
| |nursing facility billing process for clients with TPL and advice to assist the nursing facilities on billing |
| |insurance payers for services to Medicaid clients. |
| | |
| |The department will continue to assign participation, which the nursing facility may collect until the TPL party |
| |begins making payments. If the TPL insurance payment is equal to or more than the Medicaid rate, the total |
| |participation must be refunded to the client for the months paid by the TPL party. If the TPL insurance is less |
| |than the Medicaid rate, the NF can only collect up to the Medicaid rate as the total payment and must refund any |
| |excess participation collected to the client. The nursing facility should report the amount of the client refund |
| |to the local HCS office at the time it is refunded. |
| | |
| |The nursing facilities will be allowed to charge the TPL insurance companies the private rate and keep the amount |
| |paid by the TPL insurance, even if it is over the Medicaid rate. Clients will no longer be reimbursed the |
| |difference between the Medicaid rate and the TPL insurance payment amount. |
| | |
| |Effective October 16, 2006 the long-term care (LTC) ACES award letters will have new text advising clients to let |
| |case managers, financial workers, facilities and providers know when they have LTC insurance. |
|ACTION: |Financial workers must inform new applicants with TPL insurance that pays for nursing facility care that the |
| |nursing facilities must bill the insurance company directly and the state will not pay for services until the TPL |
| |insurance company has either paid or denied payment. |
| | |
| |If the nursing facility reports a refund of participation to the client, review eligibility to ensure that the |
| |client’s resources are not over the standard. The refund is considered a new resource and not income. Follow |
| |advance and adequate notice and reporting requirements criteria if making changes in participation or eligibility. |
|Related |None |
|REFERENCES: | |
|ATTACHMENT(S): |8/29/06 and October 25/06 “Dear Administrator” letters: |
| |[pic] [pic] |
| |Updated Frequently Asked Questions and responses: |
| | |
| |[pic] |
|CONTACT(S): |Mary Lou Percival |
| |Financial Program Manager |
| |(360) 725-2318 |
| |perciml@dshs. |
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