Department of Social Services

Identification of Third-Party Insurance for Medicaid Recipients

If a Medicaid recipient has health insurance from a private insurer (third-party), the third-party insurer must be billed by the medical provider before the provider's Medicaid claim will be paid by the Department. We examined the procedures used by the Department to identify Medicaid recipients with third-party health insurance coverage and found that improvements were needed. Our limited testing identified nearly 4,500 recipients whose third-party coverage had not been identified by the Department. During the 15 months we tested, medical providers were paid about $8.5 million in Medicaid for services provided to these recipients. Since the Department did not know that these recipients were covered by third-party insurers, the insurers may not have paid their share of the costs of the services provided to the recipients. The total amount owed by the third-party insurers cannot be determined until the claims are submitted tothe insurers. To more effectively identify Medicaid recipients with third-party insurance coverage, we recommended that the Department make better use of available information relating to this coverage. 95-S-18