Provider Notice issued 06/27/12

Third Party Liability

Effective July 1, 2012, the department will begin enforcing the requirement that pharmacy providers bill the primary payer first for participants who have third party coverage (Third Party Liability or TPL). If a pharmacy provider bills the department for a participant who has third party coverage, and does not report payment by the third party, the department will reject the claim.

Illinois Medicaid is always the payer of last resort. Providers must bill all other payers prior to billing Illinois Medicaid (HFS). Providers should ask Medicaid participants for their insurance cards from all payers, regardless of whether the participant’s MediPlan card shows other coverage.

If a pharmacy submits a claim for a participant for whom department records show TPL, and the claim does not contain a value greater than $0 in field 431 DV Other Payer Amount Paid, the claim will reject for NCPDP error code 41 - Submit Bill to Other Processor or Primary Payer, regardless of the Other Coverage Code (OCC) submitted in Field 308 C8. The rejection message will identify the third party on the department’s records.

Following are instructions for providers who receive Error Code 41 - Submit Bill to Other Processor or Primary Payer.

If the provider does not have TPL information for a participant, the provider should ask the participant for their insurance information, or contact the third party to obtain billing information. Once the pharmacy has the billing information, the pharmacy should first bill the third party, and then bill the department, reporting the third party payment information on the claim.

If the provider believes that the participant does not have other coverage on the date of service, the pharmacy should call the prior approval hotline at 1-800-252-8942.

If the pharmacy has TPL information for the participant for the date of service, and the pharmacy reports an OCC code other than 2, the claim will reject for Error Code 41 - Submit Bill to Other Processor or Primary Payer. Note that if a provider reports OCC 2 Other Coverage Exists – Payment Collected, and the amount reported in field 431 DV Other Payer Amount Paid is illogical relative to the charges reported in field 426 DQ Usual And Customary Charge, the claim will reject. The rejection message will state Verify TPL. If Correct Request PA. If the pharmacy receives this rejection, and the amount reported in field 431 DV Other Payer Amount Paid is accurate, the pharmacy should call the prior approval hotline at 1-800-252-8942.

Following are instructions for providers when an OCC code other than 2 is reported.

OCC - 3 = Other Coverage Exists - This Claim Not Covered

The pharmacy must determine the reason that the medication is not covered by the primary payer before billing the department. Participants must follow the primary payer's coverage policies and formulary. If the primary payer requires a prior authorization, then the pharmacy must work with the prescriber to complete the necessary documentation to bill the claim to the primary payer. If the claim is for a non-formulary medication, the pharmacy may need to work with the prescriber to switch the prescription to a formulary medication. If the claim is for an injectable medication, the primary payer may require the beneficiary to use a specialty pharmacy mail-order program. In that case, the beneficiary must be referred to the specialty pharmacy program. Only medications that are not covered by the primary payer because of a benefit limitation and which are covered by the department can be billed to the department. In this case, the pharmacy should call the prior approval hotline at 1-800-252-8942.

OCC - 4 = Other Coverage Exists - Payment Not Collected

If the primary insurance did not make payment on the claim because the primary payer's benefit design is such that the participant is required to pay the total cost of the claim, e.g., the participant is in the deductible period, the pharmacy should call the prior approval hotline at 1-800-252-8942.

If you have questions, please contact the Bureau of Pharmacy Services at 1-877-782-5565, option 7.

Theresa A. Eagleson, Administrator

Division of Medical Programs