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New CMS Guidance on Medicaid Coordination of Benefits

Earlier this month, (CMS) released a new handbook, “Coordination of Benefits and Third Party Liability (COB/TPL) in Medicaid,” which explains when a third party, versus Medicaid, is liable for payment of a claim. 

The guidance makes it clear that services provided under the Older Americans Act (OAA) are an exception to the "Medicaid is payer of last resort" rule. Therefore, Medicaid will pay for a service even if the OAA program would also pay for the service.

"Under the OAA [Older Americans Act], there is a source of funding to cover some services that are also covered by Medicaid. Individuals, however, are not legally entitled to receive services through OAA, and thus the OAA program has no legal obligation to cover those services. Since the OAA program is not legally liable for the service, the OAA does not fall within the definition of 'third party.' Accordingly, Medicaid will pay for a service even if the OAA program would also pay for the service."
 
Prior to CMS releasing this guidance, some AAAs pursuing contracts with Medicaid/duals health plans have received push-back saying that they shouldn't have to pay the AAA for services that could be covered under OAA.
 
The guidance makes it clear that services provided under the Older Americans Act (OAA) are an exception to the "Medicaid is payer of last resort" rule. Therefore, Medicaid will pay for a service even if the OAA program would also pay for the service.


 

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