AGING AND DISABILITY SERVICES ADMINISTRATION

2006 NH "Dear Administrator" Letters

January 6, 2006

ADSA: NH #2006-001
Change in Policy Regarding Third Party Liability (TPL)

Payments on Behalf of Medicaid Residents

Dear Nursing Facility/Home Administrator:

Currently DSHS allows nursing homes to bill the state for Medicaid clients even when the client has third party liability (TPL) insurance that will cover at least part of the cost of care. Under the current system, the state pays nursing homes for the client’s care and then seeks payment from insurance companies or other sources. This system is referred to as “pay and chase”.

The Federal Centers for Medicare and Medicaid Services (CMS) has informed the State of Washington that the pay and chase strategy will no longer be allowed effective January 1, 2007. Nursing homes will be responsible for collecting payments from TPL carriers before DSHS will pay the facilities for providing care to Medicaid clients with TPL coverage. Once the TPL payment is approved or denied, DSHS will then pay the Medicaid rate less the sum of any TPL payment and the participation amount.

To meet this new requirement, we will have to complete a gradual transition by converting one or more TPL carriers at a time. We plan to begin this transition in the spring of 2006. Throughout 2006 DSHS will provide updates regarding this change in billing policy. Periodic training materials will be provided, along with schedules of when the changes will be made. Please watch for updates that are related to this change in policy.

If you have any questions please call Bonnie Hawkins at (360) 725-2512 or Susan Pemberton at (360) 725-1164.

Sincerely

Tom Kearns, Chief
Office of Rates Management
Aging and Disability Services Administration

Andy Renggli, Chief
Coordination of Benefits Office
Health and Recovery Services Administration