Third Party Liability (TPL)
How this system supports the Medicaid Program
In some cases, Medicaid beneficiaries may have more than one source of coverage for health care services, such as group health plans, self-insured plans, or managed care organizations. Third Party Liability (TPL) systems identify these situations to ensure that the appropriate party pays for services.
CMS-Required Outcomes
Each CMS-Required outcome is based on statutory or regulatory requirements. CMS-Required Outcomes and Metrics are used to demonstrate that a system is compliant with the applicable federal regulations which pertain to that specific system or module. CMS-Required outcomes form the baseline for system/module functionality, which must continue to receive enhanced federal funding for operations.
| Reference # | CMS Required Outcomes | Default Metrics | Regulatory Sources |
|---|---|---|---|
| TPL1 Application |
The system does the following:
- Records third parties, - Determines the liability of third parties, - Avoids payment of third-party claims, - Recovers reimbursement from third parties after Medicaid claims payment, and - Records information and actions related to the plan. |
- Percentage of Medicaid beneficiaries with stored potential third party liability information.
- Number of records of third-party liability reimbursements. - Amount of recovered dollars from reimbursements. | 42 CFR 433.138(k)(2)(i) |
| TPL2 Health Insurance Information | The system records other health insurance information at the time of application or renewal for Medicaid eligibility that would be useful in identifying legally liable third-party resources. | - Percentage of beneficiaries with TPL information. |
Section 1902(a)(25) of the Act
42 CFR 433.136 42 CFR 433.137 42 CFR 433.138 |
| TPL3 Information to Determine Legal Liability |
The system uses electronic exchange state wage information collection agency.
The system(s) regularly updates the member file with any third-party liability information, how long it is valid, and for what services, through regular automated checks with these databases. | - Cadence of updates to member files with TPL information by database. |
42 CFR 433.138(d) and (f)
42 CFR 435.4 State Plan |
| TPL4 Rejection Based on TPL | The system rejects and returns to the provider for a determination of the amount of liability for all claims for which the probable existence of third-party liability is established at the time the claim is filed. |
- Percentage of claims rejected with a code for failure to file with a private insurer or other liable party.
- Timeliness of claims rejection and return to provider. | 42 CFR 433.139(b) |
| TPL5 Pay and Chase Identification | For claims identified with a third-party liability and designated as 'mandatory pay and chase,' the system makes appropriate payments and identifies such claims for future recovery. (Examples include preventive pediatric services provided to children, or medical child support from an absent parent.) |
- Percentage of claims identified as pay and chase.
- Percentage of recovered reimbursement for pay and chase claims. |
Section 1902(a)(25) of the Act
42 CFR 433.139(b)(3)(ii) |
| TPL6 Pay and Chase Timeline | The system(s) supports providing up to 100 days to pay claims related to medical support enforcement, preventive pediatric services, labor and delivery, and postpartum care that are subject to 'pay and chase.' If a state cannot differentiate the costs for prenatal services from labor and delivery on the claim, it will have to cost avoid the entire claim. |
- Percentage of pay and chase claims paid within 100 days.
- Percentage of pay and chase claims paid to incorrect entity. - Percentage of pay and chase claims paid in the wrong amount. |
Bipartisan Budget Act of 2018, Sec. 53102
Section 1902(a)(25) of the Act CMCS Informational Bulleting (CIB) November 14, 2019 (pg. 2) |
| TPL7 Claims Identification for TPL | The system identifies paid claims that contain diagnosis codes indicative of trauma, injury, poisoning, and other consequences of external causes on a routine and timely basis for the purposes of determining legal liability of third parties. |
- Frequency of claims being flagged as needing third party liability confirmation.
- Percentage of claims identified during cross-checks. | 42 CFR 433.138(e) and (f) |
| TPL8 Probable TPL Determination Timeline | The system identifies probable TPL within 60 days after the end of the month in which payment has been made (unless there is an approved waiver to not recoup funds). |
- Timeframes for TPL identification.
- Timeframes for reimbursement recovery. - Timeframes for reconciliation of questions. | 42 CFR 433.139(d) |
| TPL9 Report Generation | The system can generate reports on data exchanges and trauma codes so that the state can evaluate its TPL identification process. |
- Frequency of report generation.
- Frequency of monitoring of data exchanges and other oversight processes. | 42 CFR 433.138(j) |
| TPL10 Cost Effectiveness | The system enables the agency to seek reimbursement from a liable third party on all claims for which it is cost effective. |
- Percentage of claims recovered above the ROI threshold. ROI of claims recovered by contractors.
- Percentage of claims not recovered due to ROI threshold. | 42 CFR 433.139(f) |
| TPL11 MCO TPL Recovery | As determined by the state policies, system(s) enables the state to manage and oversee TPL recoveries made by its MCOs. |
- Number of dollars recovered due to MCO TPL recovery.
- Percentage of recovered reimbursement attributed to MCOs. - Response time for MCOs to respond to SME regarding TPL recovery. | COB/TPL Training and Handbook- 2020 (pg. 53-55) |
| TPL12 Privacy and Security | Before requesting information from or releasing information to other agencies to identify legally liable third-party resources, state must execute data exchange agreements with those agencies. | - Periodic risk analysis of these connections or exchange protocols between the data sharing parties. | 42 CFR 433.138(h) |
| TPL13 Reimbursement Tracking | The system tracks TPL reimbursements received so that the state can reimburse the federal government in accordance with the state's FMAP. | - Expected vs Actual TPL reimbursement | 42 CFR 433.140 (c) |
State-Specific Outcomes - CMS Approved
States requesting enhanced FFP for systems that fulfill state-specific program needs, beyond minimum legal requirements and the baseline of the CMS-required outcomes, should propose State-Specific Outcomes which address the proposed enhancements.
When drafting state-specific outcomes statements, keep these tips in mind.
Examples for Third Party Liability
We are actively gathering and evaluating outcomes statements crafted by states for this business area.
Please send examples from your state that you’d like to share to MES@cms.hhs.gov. Our team will collect and share the best examples.
| State | Medicaid Program Goal | Outcome Statement | Metric(s) |
|---|---|---|---|