Overview

Coordination of Benefits (COB) refers to the activities involved in determining Medicaid benefits when a recipient has coverage through an individual, entity, insurance, or program that is liable to pay for health care services.  Third party liability (TPL) refers to the legal obligation of third parties, i.e., certain individuals, entities, or programs, to pay all or part of the expenditures for medical assistance furnished under a State plan.

The Medicaid program by law is intended to be the payer of last resort; that is, all other available third party resources must meet their legal obligation to pay claims before the Medicaid program pays for the care of an individual eligible for Medicaid.  An average of 13 percent of Medicaid recipients have private health coverage at some time during the year according to a report issued by the Government Accountability Office (GAO) in 2006.  A link is provided at the bottom of this page to access the GAO report. Examples of third parties which may be liable to pay for services include group health plans, self-insured plans, managed care organizations, pharmacy benefit managers, Medicare, court-ordered health coverage, settlements from a liability insurer, workers' compensation, first party probate-estate recoveries, long-term care insurance, and other State and Federal programs (unless specifically excluded by Federal statute).  Group health plans are regulated by State insurance commissions.  Self-insured plans are covered by the Employee Retirement Income Security Act of 1974 (ERISA).  The Department of Labor is responsible for overseeing the fiduciary aspects of ERISA. 

Individuals eligible for Medicaid assign their rights to third party payments to the State Medicaid agency. States are required to take all reasonable measures to ascertain the legal liability of third parties to pay for care and services available under the State plan.

Statutory, Regulatory and State Plan Requirements

Use the links below to download an overview of the Federal statutory, regulatory and State Plan requirements. 

The specific Federal laws and regulations can be accessed through the 'Related Links Outside CMS' provided below.  

Downloads
Summary of Federal Statutory Requirements [PDF, 16 KB] Summary of Federal Regulatory Requirements [PDF, 14 KB] Summary of State Plan Requirements [PDF, 18 KB]
Related Links Inside CMS
Medicaid Statistical Information Statistics (MSIS)
Related Links Outside CMS
Social Security Act, Table of Contents Code of Federal Regulations (CRF) eCFR Subpart D, Third Party Liability GAO Report - Federal Guidance Needed to Help States Address Continuing Problems, 2006 (PDF) U.S. Government Accountability Office (GAO) HHS Office of the Inspector General Budget of the United States Government Departmental Appeals Board (DAB) Decisions Library of Congress - THOMAS HHS Employee Directory (Includes CMS)

Page Last Modified: 07/02/2010 9:47:16 AM
Help with File Formats and Plug-Ins