MACPAC Issues New TPL Recommendations for TRICARE in Report to Congress

June 18, 2020 HMS

Third-party liability (TPL) rules dictate that, when a Medicaid member has other health coverage, Medicaid is to pay last. There are few exceptions to this rule; however, the Medicaid and CHIP Payment Access Commission (MACPAC) has brought to light certain gaps inhibiting effective coordination of benefits between Medicaid and TRICARE, the Department of Defense’s (DoD’s) healthcare program for U.S. Armed Forces military personnel, retirees and their dependents.

These barriers have considerable cost implications for Medicaid. As an advocate for policies that promote the sustainability of this vital safety-net program, HMS commends MACPAC for calling attention and action to this important issue.

Barriers to Effective Medicaid / TRICARE Coordination of Benefits

 In its June 2020 Report to Congress on Medicaid and CHIP, MACPAC outlined a number of urgent issues for congressional and administrative action in support of Medicaid and the State Children’s Health Insurance Program (CHIP).

The report notes several barriers that inhibit coordination of benefits between Medicaid and TRICARE. These include:

  • Lack of a data sharing agreement between the Defense Health Agency (DHA) and states. Data matching is key to identifying other, third-party payers that are primary to Medicaid. This requires agencies to exchange eligibility and enrollment data; however, there has been no data sharing agreement in place between the Centers for Medicare and Medicaid Services (CMS) and DHA since 2017. According to MACPAC, this has created “the biggest roadblock to coordination of benefits between Medicaid and TRICARE.”
  • Infrequent data matches and one-year timely filing window. Under the prior data sharing agreement between CMS and DHA, coordination of benefits was a heavily manual process occurring only on an annual basis. This opened the door to various inefficiencies, errors and oversights that, ultimately, resulted in Medicaid paying claims for which TRICARE was responsible.
  • Lack of coordination with Medicaid managed care organizations (MCOs). CMS requires that third parties treat MCOs as state Medicaid agencies when delegated TPL responsibilities. Yet, the DHA does not share data with, or process claims from, Medicaid MCOs, further inhibiting coordination of benefits between Medicaid and TRICARE.

Protecting Medicaid as Payer of Last Resort: MACPAC Recommendations

MACPAC estimates that nearly 900,000 TRICARE beneficiaries are also covered by Medicaid. Without clear-cut TPL policies and data-sharing mechanisms, Medicaid bears a substantial and undue financial burden. In order to protect Medicaid as the payer of last resort when coordinating benefits with TRICARE and preserve Medicaid dollars, MACPAC recommends the following actions:

  • CMS should facilitate state Medicaid agency coordination of benefits with the DoD TRICARE program by working with the DoD to develop a mechanism for routinely sharing eligibility and coverage data between state Medicaid agencies and the DHA.
  • Congress should direct the DoD to require its carriers to implement the same TPL policies as other health insurers (e.g., sharing coverage information with Medicaid, accepting claims for up to three years and accepting the right of recovery from the state and its contractors, including MCOs) as defined in Section 1902(a)(25) of the Social Security Act.

 Urging Advocacy and Action

HMS shares in MACPAC’s commitment to addressing issues affecting Medicaid and CHIP, and we emphatically support the Commission’s recommendations to restart and improve coordination of benefits between Medicaid and TRICARE. We urge Congress and CMS to take the proposed actions and help maintain Medicaid as the payer of last resort. Additionally, we encourage all interested stakeholders to access MACPAC’s full June 2020 Report to Congress on Medicaid and CHIP addressing several urgent challenges facing the Medicaid program.

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