GAO Finds Medicaid Needs to Boost Third Party Liability Initiatives

29 Jul GAO Finds Medicaid Needs to Boost Third Party Liability Initiatives

Why GAO Did This Study

During fiscal year 2013, Medicaid – collectively funded by states and the federal government – delivered health care insurance coverage to over 70 million people at an overall cost of about $460 billion. Our lawmakers generally established Medicaid as the health care payer of last resort, meaning that if enrollees have an additional source of healthcare coverage – such as private insurance – that source should pay, to the extent of its liability, before Medicaid does. This is known as third-party liability (TPL). There are well-known challenges to ensuring that Medicaid is the payer of last resort. GAO was asked to supply data on the prevalence of private insurance among Medicaid enrollees and on state and CMS initiatives to ensure that Medicaid is the payer of last resort.

This study entitled, Medicaid – Additional Federal Action Needed to Further Improve Third-Party Liability Efforts, analyzes the extent to which Medicaid enrollees have private insurance, and state and CMS initiatives to enhance TPL efforts. GAO examined the 2012 ACS; interviewed Medicaid officials from eight states with high program spending or enrollment that utilized managed care; interviewed CMS representatives and stakeholders; and reviewed relevant laws, regulations, and CMS guidance.

What the GAO Found Regardin Medicaid Third Party Liability

According to responses to the 2012 U.S. Census Bureau’s American Community Survey (ACS) – among the most current available at the time the work was carried out—GAO estimates that 7.6 million Medicaid enrollees (13.4 percent) had private health insurance in 2012. The expected prevalence of private health insurance differed amongst Medicaid eligibility categories, which might vary with respect to Medicaid benefits and costs. The number of Medicaid enrollees with private medical insurance is expected to increase with the expansion of Medicaid.