SECTION 354.2322. Provider Billing and Recovery from Other Liable Third Parties

(a) Providers must make a good faith effort to determine, at the time health care items or services are delivered or at any time thereafter, whether the health care items or services being provided to the recipient are a result of injuries caused by a person who is or may be liable for payment for the health care items or services.

(b) Providers must submit information relating to the existence or possible existence of third party liability obtained from the recipient or legal representative of the recipient at the time a claim is submitted to HHSC for payment, or at any time thereafter, or when an informational claim is submitted under the provisions of §354.1003 of this chapter (relating to Time Limits for Submitted Claims).

(c) Providers are required to pursue recovery from third party resources whose liability has been established or is undisputed, before submitting a claim for payment to HHSC unless otherwise directed by HHSC.

(d) Providers who identify a third party resource, within 12 months from the date of service, and wish to submit a bill, or other written demand for payment or collection of debt to a third party resource after a claim for payment has been submitted and paid by HHSC, must: refund any amounts paid by Medicaid prior to submitting a bill or other written demand for payment or collection of debt to the third party resource for payment, and; comply with the provisions of subsection (e) of this section. This section does not require a refund to Medicaid or prohibit a provider from filing a statutory provider lien prior to submitting reasonable requests for information to a third party resource or a representative of a recipient to assess the likelihood of recovery from a third party resource.

(e) Providers may retain a payment from a third party resource in excess of the amount Medicaid would otherwise have paid only if the following requirements are met:

(1) the provider submits an informational claim to HHSC within the claim filing deadline contained in §354.1003 of this chapter indicating the identity of the third party resource from whom recovery is being pursued;

(2) the provider gives notice to the recipient, or the attorney or representative of the recipient, that the provider may not or will not submit a claim for payment to Medicaid and the provider may or will pursue a third party resource, if one is identified, for payment of the claim. The notice must contain a prominent disclosure that the provider is prohibited from billing the recipient or a representative of the recipient for any Medicaid-covered services, regardless of whether there is an eventual recovery or lack of recovery from the third party resource or Medicaid;

(3) the provider establishes its right to payment separate of any amounts claimed and established by the recipient; and

(4) the provider obtains a settlement or award in its own name separate from a settlement obtained by or on behalf of the recipient or award obtained by or on behalf of the recipient, or there is an agreement between the recipient or attorney or representative of the recipient and the provider, that specifies the amount which will be paid to the provider after a settlement or award is obtained by the recipient.

(f) Providers who have filed informational claims with HHSC but have not made a recovery from a third party resource within 18 months from the date of service must make a choice before the end of the 18th month from the date of service to:

(1) continue to pursue a claim against the third party resource for payment and forego the right to submit a claim for payment to Medicaid; or

(2) convert the informational claim to a claim for payment from HHSC and receive payment from HHSC as payment in full for all Medicaid-covered services.

(g) Providers who pursue a third party resource for payment and who subsequently fail to recover from the third party resource within 18 months from the date of service, or recover less than the Medicaid payable amount within 18 months from the date of service, may submit a claim for payment to HHSC for the difference between the amount recovered and the Medicaid payable amount, only if the requirements of subsections (d) and (e) of this section are met.

(h) Providers are limited to the Medicaid payable amount and the provider is required to accept the amount paid by HHSC as payment in full if a claim for payment is submitted and paid by HHSC:

(1) before a third party resource claim is paid; and

(2) the provider failed to comply with each of the requirements under subsections (d) and (e) of this section.

(i) Except as provided by subsection (d) of this section, payments made by third party resources to a provider, after the provider has been paid by HHSC, must be forwarded by the provider to HHSC for distribution according to the provisions of §354.2334 of this chapter (relating to Notices and Payments).

(j) Any provider who accepts Medicaid payment as payment in full for health care items or services and retains any amount in excess of the Medicaid payable amount from a third party resource and conceals or fails to account to HHSC for the third party resource amount, resulting in excessive or duplicate payment for the same health care item or service may be referred for investigation and prosecution for violations of state or federal Medicaid or false claims laws, or both.

(k) Providers are prohibited from submitting a bill, or other written demand for payment or collection of debt for any Medicaid-covered service from an individual who the provider knows or should know is a Medicaid eligible recipient or from the legal representative of a recipient, regardless of whether a claim for payment for the service is submitted to HHSC. This section does not prohibit a provider from submitting reasonable requests for information to a recipient, or representative of a recipient, to assist the provider in identifying a third party resource. However, any inquiry which would lead a reasonable person to believe that the provider was making a demand for payment, or attempting to collect an unpaid debt, will bring the provider within the limitations and prohibitions as follows.

(1) If a provider attempts to recover any amount from a recipient for a Medicaid covered service, HHSC may provide for a reduction of an amount otherwise payable to the provider in addition to referring the provider for investigation and prosecution for violations of state or federal Medicaid or false claims laws, or both.

(2) The amount of the reduction may be up to three times the amount the provider sought in excess of the Medicaid payable amount.

(l) Providers are prohibited from refusing to provide health care items or services to a Medicaid recipient because the recipient has a third party resource that may potentially be liable for payment of the health care items or services.

(m) HHSC will not accept and cannot pay any claim for payment under this section submitted after 18 months from the date of service, regardless of whether an informational claim has been timely filed.

Source Note: The provisions of this §354.2322 adopted to be effective April 30, 1999, 24 TexReg 3083; transferred effective September 1, 2001, as published in the Texas Register May 24, 2002, 27 TexReg 4562; amended to be effective March 28, 2004, 29 TexReg 2867; amended to be effective February 22, 2024, 49 TexReg 855