T
Operations

TPL (Third Party Liability): Third Party Liability

Definition
The legal obligation of third parties (e.g., private health insurance, auto insurance, workers' compensation) to pay part or all of the expenditures for medical assistance furnished under a Medicaid plan.

Overview

Why it Matters

Medicaid is the "Payer of Last Resort." If a member was in a car accident, the Auto Insurance should pay for the transport to therapy, not Medicaid.

How it Works

Before billing Medicaid, the provider/biller must check if the member has other insurance. If so, they must bill that insurer first. Medicaid only pays the remainder (if any).

Code Comparison

Comparison: TPL vs. Co-Pay

TPL: Another insurer pays.

Co-Pay: The patient pays.

Common Questions

  • Billing Medicaid First: Submitting a claim to Medicaid for a Workers Comp case. Medicaid will pay it initially but will "claw back" the money 2 years later when they find out, wrecking your finances.
  • Medicare Crossovers: Failing to understand that Medicare doesn't cover routine NEMT, so the "TPL Denial" from Medicare is often just a formality needed to bill Medicaid.
  • Ask "Is this trip related to an accident at work or in a car?" during intake.

Sources

Medicaid.gov - Third Party Liability