Kansas Department of Health & Environment

Kansas Family Medical Assistance

Manual (KFMAM)


Eligibility Policy - 10/16/2021

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02530 Third Party Resources - A third party is an individual, institution, corporation, public or private agency (other than the applicant/ recipient or the agency) who is or may be liable to pay all or part of the medical costs of a recipient that otherwise would be paid through the medical program.

Individuals eligible for medical assistance will be informed that they have the responsibility to utilize all available medical resources and to inform the agency of any third parties which may have a legal obligation to assume responsibility for payment of any or all medical expenses. (Examples are Medicare and other health insurance.) Refer to 2020 for the eligibility factor related to cooperation and 2540 regarding cooperation with HIPPS.

Third party liability can be considered a resource to the applicant/ recipient in the sense that it is or may be available to meet particular medical expenses, but is not considered against allowable non-exempt resource standards.
No one may be denied Medicaid because of an existing or potential third party resource or other medical resources. See 2400 regarding CHIP eligibility. Payment for a particular covered service may be withheld pending a determination of failure to utilize other medical resources or an existing liable third party (e.g., Medicare extended care benefits for payment of adult care home costs).
In addition, eligibility may be denied or terminated for failure to cooperate in identifying and pursuing third party resources in accordance with 2020 or in cooperation with the HIPPS process in accordance with 2540.

The Case Manager has the responsibility to:

2531 - Ascertain and document legal liabilities of third parties (e.g., private or group health insurance coverage, Medicare, VA, etc.) or of pending lawsuits which might establish such a liability. We cannot require an applicant/recipient provide the information as a condition of eligibility. If partial information is known at the time of the application approval, a partial referral shall be submitted. The MMIS fiscal agent will attempt to identify the needed TPL information in order to create an accurate record. If the fiscal agent is unable to locate the record using the information provided, it is the responsibility of the agency to obtain the information from the consumer. If the consumer either refuses the information or fails to contact the agency, coverage should be denied/closed due to failure to cooperate. Good cause shall apply in instances where the consumer is unable to provide the information but shows an attempt to cooperate.

Note: Condition of eligibility in this sense indicates that Medicaid cannot be denied due to the existence of TPL or for failure to provide full information up front. It does not exempt the consumer from cooperating with the agency in obtaining the information when needed.

All existing health insurance coverage must be notated in the MMIS system. Failure to do so can result in claims being paid incorrectly or in error. However, certain third-party coverage such as Indian Health Services, VA, and Kansas Health Insurance Association coverage are not to be included on the TPL file. Third Party Liability information is captured through the application process and entered KEES. A referral is automatically sent to the MMIS upon case approval. To generate the referral, the following fields must be complete: Case Number, Client ID, Policy Holder Name, Carrier Name, and Policy ID. For partial referrals, use ‘unknown’ in the fields that are unknown at the time of application approval.

2531.01 - Inform the Medical Subrogation Unit in writing of failure of Medicaid consumers to utilize such third party liability or of pending law suits, insurance settlements, etc. which might establish such liability. This is not applicable to CHIP. The Medical Subrogation referral form (Injury) shall be used to notify the unit. (See the KFMAM Forms.)

2531.02 - Request assistance from Medical Subrogation Unit in writing to help obtain third party resource information from non-cooperative sources such as birth mothers, adoption agencies, or adoptive parents when a Medicaid or MediKan consumer is adopted. This is not applicable to CHIP. The Medical Subrogation referral form (Adoption) shall be used for this purpose. (See KFMAM Forms.)

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