STATEMENTS OF POLICY
Title 55--PUBLIC WELFARE
DEPARTMENT OF PUBLIC WELFARE
[55 PA. CODE CH. 259]
Statement of Claim for Recipients in Managed Care
[28 Pa.B. 3301] Purpose
The purpose of this statement of policy is to clarify how the Department of Public Welfare (Department) will compute statements of claim for reimbursement of Medical Assistance (MA) funds from liable third parties when clients receive MA through a managed care organization (MCO) under contract with the Department.
Scope
This statement of policy applies to all providers enrolled in the MA Program and all managed care plans under contract with the Department.
Background
Section 1902(a)(25) of the Social Security Act (42 U.S.C.A. § 1396a(a)(25)), requires the Department to operate a program to recover the costs of MA expenditures from liable third parties. Section 1912(b) of the Social Security Act (42 U.S.C.A. § 1396k(b)), requires that third-party liability reimbursement be pursued for MA services provided on behalf of an individual client. When MA services are delivered through MCOs, Federal policy requires that either the Department or the MCO fulfill Federal third-party liability requirements.
Discussion
The Department's contracts with MCOs throughout this Commonwealth give the Department responsibility for pursuing casualty related postpayment recoveries from third parties who are liable for medical costs paid by the MA program. However, since MCOs are paid by the Department on a capitated basis it is impossible to directly compute a statement of claim for MA expenditures attributable to a specific illness or injury. Accordingly, the Department must implement a methodology to estimate the liability of third parties when services are paid for by an MCO.
The Department has considered and rejected the option of recovering only the amount of the capitation payment paid by the Department to the MCO. The capitation fee is a discounted estimate of average per member costs across the entire MA population. Use of the capitation fee to compute liability in injury cases would not fairly allocate increased costs resulting from injuries in individual cases to the liable third parties. Additionally, section 1912(b) of the Social Security Act requires the Department to seek reimbursement from third parties for the cost of care attributable to individual MA clients. The capitation fee is an inappropriate statistic to estimate the costs attributable to an individual MA client.
In computing its claim for services paid through an MCO, the Department will use the amount of the payment made by the MCO to the medical provider as a reasonable estimate of the actual MA costs which are the responsibility of a third party. If the MCO makes a capitated payment to the provider, the Department will use its analogous fee schedule amount as a reasonable substitute for the actual amount attributable to a particular service. The Department interprets State law provisions found in section 1409(b)(7)(i) and (8) of the Public Welfare Code (62 P. S. § 1409(b)(7)(i) and (8)) to be consistent with this approach. The Department considers an MCO under contract with the Department to be an agent of the Department for the purposes of making MA expenditures subject to recovery under section 1409. Accordingly, expenditures of the MCO will be considered to be expenditures of the Department for purposes of applying section 1409(b)(7)(i) and (8).
If the MCO fails to provide the Department with information necessary to compute the statement of claim within contractual deadlines, the Department will use the amount of the capitation payments made to the MCO since the date of the injury as its claim against the third party until sufficient information is provided to compute a statement of claim in accordance with the foregoing policy. When the Department is forced to use the capitation payment to compute its statement of claim, the MCO will be liable to the Department for the amount of the Department's diminished recovery in accordance with the terms of the MCO's contract with the Department.
Effective Date
This statement of policy takes effect upon publication in the Pennsylvania Bulletin and applies retroactively to February 1, 1997.
Contact Person
Comments and questions regarding this statement of policy should be directed to: Third Party Liability Section, Department of Public Welfare, P. O. Box 8486, Harrisburg, PA 17105-8486, (717) 772-6257.
(Editor's Note: The regulations of the Department, 55 Pa. Code, are amended by adding a statement of policy in § 259.1 (relating to statement of claim; managed care organizations--statement of policy).)
FEATHER O. HOUSTOUN,
SecretaryFiscal Note: 14-BUL-55. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 55. PUBLIC WELFARE
PART II. PUBLIC ASSISTANCE MANUAL
Subpart G. RESTITUTION AND REIMBURSEMENT
CHAPTER 259. THIRD-PARTY LIABILITY § 259.1. Statement of claim; managed care organizations--statement of policy.
(a) With respect to claims against third parties for the costs of Medical Assistance (MA) services delivered through a Managed Care Organization (MCO) contract, the Department will recover the actual payment to the hospital or other medical provider for the service. If no specific payment is earmarked by the MCO for the service, such as in the example of a capitated payment to physicians, the Department will recover its fee schedule amount for the service.
(b) If the MCO fails to provide the Department with information necessary to compute the statement of claim within contractual deadlines, the Department will use the amount of the capitation payments made to the MCO since the date of the injury as its claim against the third party until sufficient information is provided to compute a statement of claim in accordance with subsection (a). When the Department is forced to use the capitation payment to compute its statement of claim, the MCO will be liable to the Department for the amount of the Department's diminished recovery in accordance with the terms of the MCO's contract with the Department.
[Pa.B. Doc. No. 98-1100. Filed for public inspection July 10, 1998, 9:00 a.m.]
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