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Important Medicaid and Medicare Updates

By Andrea Hagen, on November 24th, 2020

The October 2020 Medicaid Update included several significant updates related to Third Party Health Insurance Program requirements which providers should review and ensure their revenue cycle staff understand, as the changes will impact billing processes.

The Fiscal Year 2021 enacted budget included amendments, intended to clarify, but not limit, the previously existing prohibition on administrative denials by liable third parties. If Medicaid deems a service is medically necessary and appropriate, a responsible third-party payer must accept that determination and pay the claim. The only reasons a payer should deny the claim is if a person was not eligible or if the service rendered was not included as a benefit. Specifically, a liable third party is prohibited “from denying Medicaid third-party liability claims for administrative or procedural reasons, including but not limited to filing limits, claim format, failure to present care at point of service, retrospective reviews, or for failure to obtain prior authorization”. When third-party payers deny for these reasons, payment liability often transfers inappropriately to Medicaid. Per Medicaid guidance, if a provider receives an inappropriate denial, it should appeal those decisions with the third-party payer.

An additional amendment established a Medicaid prompt payment standard which requires the liable third-party payer to respond to a written notice of the claim for payment within 60 calendar days, without any assessing any processing/adjudication fees.

Medicaid also announced a significant fee-for-service (FFS) billing change that will alter the way providers must submit claims to Medicaid for patients who are eligible for Medicare or other third-party insurance benefits (excludes pharmacy, Medicare crossover claims, and non-covered Medicaid procedure codes). Providers will still be required to bill Medicare or a third party payer prior to submitting a claim to Medicaid, but in the coming months, providers will be required to attach an Explanation of Benefits (EOB) for claims covering services provided to a patient who is also eligible under another payer. A failure to submit the required EOB will result in a denial. OMIG will issue additional information regarding the timeline and requirements of this initiative.

OMIG’s Bureau of Third Party and Payment Oversight at is accepting questions regarding these changes.

2021 Medicare premiums, deductible, and coinsurance amounts have been issued. Changes are noted in the below table.

The Bonadio Group

The information and advice we are providing for this matter relates to COVID-19 legislative relief measures. Because legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that could modify some of the advice and information provided to you, after the conclusion of our engagement. We, therefore, make no warranties, expressed or implied, on the services provided hereunder.

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Written By

Andrea Hagen Oct13
Andrea Hagen
Chief Operating Officer, Beacon Solutions Group

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