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Third Party Liability

Under state and federal law, the Medicaid program is intended to be the payer of last resort for health-care costs. All other available third-party resources must meet their legal obligations to pay claims before the Medicaid program pays for the care of an individual eligible for Medicaid.

The Third Party Liability Unit (TPL) identifies Medicaid recipients who have other medical insurance or payment sources that must pay at least some of their health-care costs before they rely on Medicaid. These third-party sources may include health and liability insurance, court settlements, worker's compensation, and absent parents.

Individuals eligible for Medicaid assign their rights to third-party payments to the State Medicaid agency, which in Montana is the Department of Public Health and Human Services. Once the state has determined that a potentially liable third party exists, it is required either to "cost avoid" or "pay and chase" claims.

Cost avoidance is where the provider of services bills and collects from liable third parties before sending a claim to Medicaid. Pay and chase is used when the state Medicaid program pays the medical bills and then attempts to recover from liable third parties.

The Third Party Liability Unit comprises these programs:

  • Health Insurance Premium Payment (HIPPS): HIPPS allows Medicaid funds to be used to pay for private health insurance coverage when it is cost effective to do so. Montanans may apply for the HIPPS program at their local Office of Public Assistance.
  • Medicare Buy-In: This program helps people with low incomes and resources to pay their Medicare costs. Anyone who receives Medicare Part A and has limited income and resources is eligible for the Medicare Buy-In Program. To apply, contact your local Office of Public Assistance.
  • Casualty Recovery: This program allows Montana Medicaid to recover funds on claims for Medicaid recipients for personal injuries, illness, or disability for which Montana Medicaid has paid. These recoveries come from potentially liable third parties.
  • Lien and Estate Recovery: Federal law requires each state to recover the costs of nursing facility and other medical services from the estates of Medicaid recipients. This means the State of Montana is required to recover from Medicaid recipients who receive services at the age of 55 or older, or in a nursing home, in order to help pay Medicaid-covered expenses for the increasing number of individuals needing medical care.

When the State becomes aware of recoverable assets, it files a claim against the deceased recipient's estate. The personal representative or attorney handling the estate uses proceeds from the sale of estate property to repay the Medicaid Program for medical expenses paid on the decedent's behalf.

The State may also place a lien on a nursing home or institutionalized recipient's home when there is not a reasonable expectation that the recipient will return home within six months. Proceeds from the sale of the home are used to reimburse the Medicaid Program for medical expenses paid on the recipient's behalf.

Program Compliance Bureau Chief
Michelle Truax
(406) 444-4120

Third Party Liability Supervisor
David Schiefen
(406) 444-6004

Page last updated: 08/01/2013