Third Party Liability (TPL)

Updated: January 2026

Purpose

ND Medicaid is required to cost avoid for services that have third-party coverage. This policy explains third party liability for providers and members.

Applicability

Third Parties Include:

Health Insurers (includes private or employer-based coverage);
Federal programs (includes Medicare, and TRICARE);
Medicare Supplemental Plans (extended plans);
Medicare Replacement (advantage part C plans)
Other government programs (includes Workforce Safety and Insurance); and
Other liable people or entities (includes auto, homeowners’, business liability, personal injury (PIP)/no fault insurance, etc.).

A claim submitted to Medicaid must have the third-party Explanation of Benefits (EOB) information which includes all payment, contractual obligations, and patient responsibility details submitted on or with the claim as a claim attachment. For claims to reimburse correctly, EOB information must be submitted at the header or claim level for inpatient claims and at the service or line level for dental, outpatient and professional claims.

Obtaining Third Party Liability Information

Providers must identify any liable third-party payers prior to billing Medicaid in most instances. Providers may not refuse services to a member because the member has third-party coverage.

Providers are required to obtain health care coverage information including third party liability information from any potential source, which can include the member, the member's representative, the human service zone office, MMIS portal, the claims call center, or through the information provided by the Medicaid remittance advice on the explanation of benefits.

Third Party Liability Recovery

When there is no known third-party liability coverage at the time of claims adjudication, Medicaid may pay claims up to the Medicaid allowed amount. If Medicaid later establishes that a third party was liable for the claim, we will seek to recover the payment. This occurs when the Medicaid beneficiary requires medical services in casualty/tort, medical malpractice, Worker’s Compensation, other cases where the third- party liability is not determined before medical care is provided, or when Medicaid learns of the existence of health insurance coverage after medical care is provided.

The department works with a vendor to identify any potential liable third party for claims submitted with no known coverage. Recovery efforts begin 180 days after the final claim adjudication. Upon discovery of a liable third party, the vendor will send an invoice directly to the carrier requesting repayment. After the vendor receives the payment, it is forwarded to the department for processing. The payment is applied to the appropriate claim(s).

The department manages the subrogation claims recovery process. Subrogation claims include but are not limited to casualty/tort, medical malpractice, and/or accident-related cases. The department works directly with the liable third party or appointed representative to identify potential medical service claims and seek recovery.

During third-party liability recovery, health insurers are required to:

Accept the state’s right to recovery;
Accept that Medicaid members have assigned their rights to the state for any amounts paid by the state on the member’s behalf;
Adjudicate claims for reimbursement from Medicaid to the same extent that the plan would have been liable for had it been properly billed at the point-of-service; and
Not deny claims submitted by Medicaid based on a procedural formality, such as the type or format of the claim form, timely filing, absent prior authorization, or a failure to present proper documentation of coverage at the point of service.

Medicaid has the right to recovery up to 6 years when Medicaid submits a claim to a third-party payer within 3 years from the date of service.

Third Party Liability Exceptions

North Dakota Medicaid is generally the payer of last resort.

In the following situations, providers may submit claims directly to ND Medicaid even if there is a liable third party.

Services provided for Early and Periodic Screening, Diagnostic, and Treatment (EPSDT);
School Based Services, Medicaid-eligible children that are authorized in an Individualized Education Program (IEP) or Individualized Family Service Plan (IFSP) under the Individuals with Disabilities Act (IDEA). Public agencies (schools) with general responsibilities to ensure health and welfare are not considered liable third parties. School based services provided outside of an IEP or IFSP are subject to third party liability;
1915(c) Waivers (Home and Community Based Services, Developmental Disabilities, Autism (does not include applied behavioral analysis services), Children’s Medically Fragile, Children’s Hospice);
1915(i) Services; and
Services that Medicaid has been able to verify are never payable by another payer (ex. Tricare does not cover chiropractic services).

Third Party Liability Coverage (Waiting Period)

If the primary policy has a waiting period, ND Medicaid will pay for services as primary until the waiting period has been satisfied. Verification of the waiting period must be submitted with each claim.

Medicare Provider Enrollment Opt-out

Providers may choose to opt-out of Medicare. ND Medicaid will not pay for services covered by but not billed to in these instances. Providers must enroll with Medicare if Medicare covers the services to receive payment from ND Medicaid. Providers must notify the member prior to receiving services that they are not a Medicare-enrolled provider and obtain a signed acceptance notice prior to rendering services.

Out-of-Network Providers

Federal regulations allow Medicaid members to obtain services from any enrolled Medicaid provider. Medicaid will require providers to submit claims where members have gone outside the liable third party’s network to the third party for a determination of available out of network benefits. Medicaid will process the claim according to the state plan and reimburse the service, if covered and not denied by the third-party liability as a contractual obligation (CO), up to the Medicaid allowed amount or the patient responsibility amount whichever is less.

Medicare Crossovers

A crossover claim is for a member eligible for both Medicare and ND Medicaid. A claim for a member with Medicare coverage must be submitted to Medicare first. Medicare pays a portion of the claim and ND Medicaid is billed for any remaining deductible, copay, and/or coinsurance. Medicare uses a Coordination of Benefits Contractor to automatically crossover claims billed to the Medicare Part A, Part B, and Durable Medical Equipment contractors for Medicare/North Dakota Medicaid eligible members.

In some cases, the claim may not automatically cross over. If billing ND Medicaid for the Medicare co-insurance and/or deductible, providers should only submit a crossover claim after 60 days have passed from the date of the Explanation of Medicare Benefits (EOMB) and the claim is not listed on your North Dakota Medicaid remittance advice as paid, pended, or denied. Proof of payment from Medicare (EOMB, voucher, etc.) must be attached to the crossover claim form.

Make sure to include the correct Claim Filing Indicator Code on electronic claim submissions for correct Medicare primary claims processing.

When submitting Medicare primary claims, including replacement and supplemental, MA (Medicare Part A) or MB (Medicare Part B) should be used as the claim filing indicator. CI (Commercial Insurance) should only be used if the primary insurance is a commercial policy. Exception: Nursing Home and Swing Bed claims must be submitted with CI (Commercial Insurance) claim filing indicator for Medicare Advantage (replacement) and Extended (supplemental) plans.

Eligible Members

Providers are responsible for verifying a member’s eligibility before providing services. Eligibility can be verified using the ND Medicaid MMIS Portal or through the through the Automated Voice Response System by dialing 1.877.328.7098.

Refer to the Member Eligibility Manual for additional information regarding eligibility including information regarding limited coverage categories.

Documentation Requirements

Third Party Restriction on Provider Enrollment or Credentialing

Medicaid requires servicing providers submit the following documentation when the member’s third-party liability plan does not cover ND Medicaid-credentialled providers:

Letter with servicing provider’s credentials for claim date of service(s);
Dated credentialing policy or handbook information from the member’s third-party that states the servicing provider is ineligible to enroll. If a policy manual is not available, the servicing provider must seek a dated credentialing denial confirming the provider is ineligible to enroll due to credentials; and

Documentation must accompany every claim that is submitted.

Payment and Billing

Medicaid Payment for Service with Third Party Liability

ND Medicaid will pay the amount designated as the member responsibility up to the Medicaid allowed amount, Medicaid will pay the claim at $0 if third-party payment exceeds the Medicaid allowed amount.

ND Medicaid providers are required to follow TPL payer policy and procedures for payment. Medicaid will not substitute as the primary payer when services are administered outside of the primary payer guidelines.

Medicaid Payment for Nursing Homes and Swing Beds with Medicare Advantage and Extended Plans

Medicare Advantage and Extended Plans are not Original Medicare plans; they are replacement and supplemental plans that are processed by ND Medicaid as a commercial (private) TPL policy. ND Medicaid pays up to the patient responsibility or Medicaid allowed amount whichever is less. ND Medicaid does not pay more than the billed amount.

Providers Billing a Member

Medicaid payment is considered payment in full for covered services. Providers are not allowed to bill the member or seek additional compensation from family, friends, or others after payment is received from the third party and ND Medicaid, even if ND Medicaid payment is $0. Provider may not bill members for:

Balance billing or the difference between charges and the amount ND Medicaid paid.
Claims denied by ND Medicaid due to a provider billing error.
Claims denied for failure to secure the necessary service authorization.

ND Medicaid members may only be billed for the following:

Client share (recipient liability) amount documented on the remittance advice. Providers may not collect client share at the time of service, unless the service is for outpatient pharmacy billed through the Pharmacy Point of Sale.
Non-covered ND Medicaid services so long as the member is given advance notice of and accepts financial responsibility for the service prior to its rendering. Notice and acceptance must be in writing and signed.
Services delivered by a non-enrolled provider if the member signed an advance notice that the provider was not enrolled, and the provider will not enroll in ND Medicaid prior to rendering services.
Services where the member was paid directly by a third-party payer. A provider may bill a member to recover the amount paid by the third-party payer. Providers may not
- bill more than the amount paid to the member.
- demand payment upfront and require members to bill a third-party payer unless third party terms require benefits be paid to the member.

One EOMB is required if the member has a Medicare Part C/Advantage plan.

Two EOMBs are required if the member has Medicare and a supplemental/Extended plan.

North Dakota Medicaid will not pay for any service that has been denied by Medicare as not medically necessary or reasonable.

References

Companion Guides

Related Policies

Claims Guidance

Contact

Third Party Liability Unit
Medical Services
ND Dept. of Health and Human Services
600 East Boulevard Ave, Dept 325
Bismarck, ND 58505-0250
Phone: (800) 755-2604 or (701) 328-2347
Email: medicaidtpl@nd.gov