Payment recovery. For example, states are increasingly contracting with managed care  plans to deliver services to Medicaid enrollees (such plans are hereafter  referred to as Medicaid managed care plans), and may delegate TPL  responsibilities to such plans. An Estimated 7.6 Million Medicaid Enrollees Had Private Insurance in 2012 and This Number Is Expected to Increase with the Medicaid Expansion

Based on responses to the U.S. Census Bureau’s ACS, we estimate that  7.6 million Medicaid enrollees—13.4 percent—also had a private source  of health insurance in 2012. However, the prevalence of private health  insurance varied among four Medicaid eligibility categories that we  analyzed—children, adults, disabled, and aged. Selected  states and CMS have taken various steps to address some of these  challenges; however, selected states and stakeholders suggested that  further CMS guidance and efforts to facilitate information sharing among  states could improve TPL efforts nationwide. Selected States Have Taken Various Actions to Address Challenges with Coverage Identification, Managed Care Plan TPL Activities, and Coverage Denials

			State Actions to Address Challenges with and Improve Coverage Identification

As the identification of Medicaid enrollees with private health insurance is  a critical first step for achieving TPL cost savings, many states nationwide  conduct electronic data matches of Medicaid enrollment files with insurer  files themselves or through a contract with a vendor that conducts  matches on the state’s behalf. For example, in five of the eight states in our review, individuals with third- party coverage may be eligible to enroll in Medicaid managed care plans   The laws  and certain TPL responsibilities are delegated to these plans. However, according to a  representative of the National Association of Medicaid Directors, it can be  difficult for states to work with Medicaid managed care plans and insurers  as needed to strengthen state oversight. While CMS Has Taken Action to Support State TPL Efforts, Additional Federal Action Could Benefit TPL Efforts Nationwide

CMS has taken steps, including issuing additional guidance, to address  certain challenges that states face in ensuring that Medicaid is the payer  of last resort. While the effective  state practices CMS solicited and shared with states included information  on initiatives implemented as of 2013, other state initiatives underway  were not included. States have front-line responsibility  for ensuring that Medicaid is the payer of last resort and are required to  take steps to identify individuals with other health insurance and ensure  that other insurance pays to the extent of its liability. Recommendations

In light of the federal interest in ensuring that Medicaid should pay only  after other liable third parties; state initiatives to improve TPL efforts, such  as coverage identification strategies; and states’ increasing use of  managed care, we recommend that the Secretary of Health and Human  Services direct CMS to take the following two additional actions to  oversee and support state TPL efforts:
Routinely monitor and share across all states information regarding  key TPL efforts and challenges. Provide guidance to states on their oversight of TPL efforts conducted  by Medicaid managed care plans. Appendix I: Scope and Methodology of the American Community Survey (ACS) Analysis

To assess the extent to which Medicaid enrollees have private health  insurance, we utilized the ACS, an annual survey conducted by the U.S.  Census Bureau. We analyzed data from the  most recent ACS Public Use Microdata Sample (PUMS) that was  available at the time we conducted our work, which covered calendar  year 2012. Specifically,   tables 1 and 2 provide estimates of the number and percentage of  Medicaid enrollees with other sources of health coverage by Medicaid  eligibility category and by state.
Why GAO Did This Study

In fiscal year 2013, Medicaid—jointly financed by states and the federal government—provided health care coverage to over 70 million individuals at a total cost of about $460 billion. Congress generally established Medicaid as the health care payer of last resort, meaning that if enrollees have another source of health care coverage—such as private insurance—that source should pay, to the extent of its liability, before Medicaid does. This is referred to as third-party liability (TPL). There are known challenges to ensuring that Medicaid is the payer of last resort. GAO was asked to provide information on the prevalence of private insurance among Medicaid enrollees and on state and CMS efforts to ensure that Medicaid is the payer of last resort.
This report examines (1) the extent to which Medicaid enrollees have private insurance, and (2) state and CMS initiatives to improve TPL efforts. GAO analyzed the 2012 ACS; interviewed Medicaid officials from eight states with high program spending or enrollment that used managed care; interviewed CMS officials and stakeholders; and reviewed relevant laws, regulations, and CMS guidance.

What GAO Found

Based on responses to the 2012 U.S. Census Bureau's American Community Survey (ACS)—the most recent available at the time the work was conducted—GAO estimates that 7.6 million Medicaid enrollees (13.4 percent) had private health insurance in 2012. The estimated prevalence of private health insurance varied among Medicaid eligibility categories, which may differ with respect to Medicaid benefits and costs. The number of Medicaid enrollees with private health insurance is expected to increase with the expansion of Medicaid.
Selected states reported taking various steps to address challenges to ensuring that Medicaid is the payer of last resort and acknowledged recent Centers for Medicare & Medicaid Services (CMS) support, while also suggesting additional federal action. Four of the eight reviewed states reported various initiatives to improve coverage identification, such as arranging to participate in a data registry that allows participants to identify individuals with overlapping coverage. CMS has taken steps to issue TPL guidance and share some information on effective state practices, and such federal efforts should be ongoing to ensure that evolving approaches are captured and shared across states. In addition, officials in five states reported that enrollees with third-party coverage may be eligible to enroll in Medicaid managed care—in which states contract with health plans to provide services to enrollees and may delegate TPL activities such as payment recoveries to these plans. One of the five states had initiated a program to oversee plans' TPL recoveries, while other states did not report similar oversight. The National Association of Medicaid Directors reported that, in the absence of explicit CMS guidance in this area, it can be difficult for states to work with plans to improve TPL oversight and has recommended CMS provide such guidance.

What GAO Recommends

GAO recommends that the Secretary of the Department of Health and Human Services (HHS) direct CMS to (1) routinely monitor and share across all states information regarding key TPL efforts and challenges, and (2) provide guidance on state oversight of TPL efforts conducted by Medicaid managed care plans. HHS concurred with GAO's recommendations and noted plans to address them.