Problems in Carrying Out Medicaid Recovery Programs from Third Parties

HRD-77-73: Published: May 2, 1977. Publicly Released: May 2, 1977.

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There are problems involved in implementing the third-party recovery programs which are required to be part of the states' Medicaid programs.

Third parties, such as health or automobile accident insurance companies, may be liable to pay part or all of the medical costs of injury, disease, or disability of a Medicaid applicant or recipient. States are responsible for identifying and recovering funds from these third parties. The Department of Health, Education, and Welfare's (HEW) Audit Agency and consultants have repeatedly reported inadequacies in state recovery. The six states whose programs were reviewed used various procedures and approaches to identify liable third parties, to recover or avoid cost applicable to them, and to account for and report recoveries or cost avoidances. Claims are sometimes paid without a thorough investigation of third-party liability.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary, HEW, should direct the Administrator of the Health Care Financing Administration to work with the states to develop a mandatory reporting system for quantitatively measuring the effects of state third-party recovery programs designed to be useful to both federal and state management. The Secretary should ask states having eligibility determination agreements with the Department: (1) to identify the information they believe is needed from individuals during the eligibility process; and (2) to decide whether the information would be compatible with their third-party system and useful in administering their programs.

    Agency Affected:


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