We have been made aware that Kentucky has been recently requesting a workers’ compensation insurance questionnaire from insurance payers with regard to each of its injured workers to identify Medicaid beneficiaries. Many have been questioning where and why this questionnaire came from, if there is any obligation to respond to it, and if other states are implementing similar policies to discover this similar information so that Medicaid can further its third party liability recovery efforts. The questionnaire states that both health insurers and Medicaid liens are recoverable in Kentucky workers’ compensation claims if the holder of the lien places the parties on notice of the lien and/or intervenes in the action.

The Deficit Reduction Act of 2005 set a few wheels in motion on Medicaid. In addition to mandating States to collect data from health insurance carriers to improve third party liability recoveries, it also encouraged states to set up additional mechanisms to discover potential recovery situations from non-group health plans, such as liability and workers’ compensation insurance. Franco Signor has advised our clients to respond to these questionnaires as the Deficit Reduction Act provides authority to Medicaid to make such inquiries. It is unclear however at this time what penalties exist for not responding to these questionnaires.

Congress has been moving states to increase third party liability recoveries. A GAO report from May of 2014 (link to GAO report can be found here) called for increased third party liability Medicaid recoveries by states. Regrettably, states are attempting to increase recoveries in a variety of ways that may lead to confusion.

Many are aware of Rhode Island which has already implemented an electronic reporting system where Medicaid beneficiaries are matched and identified. In the past, Kentucky like most other states had antiquated systems to compare information from auto no-fault and workers’ compensation with Medicaid beneficiaries. Last year Kentucky completed an upgrade of its workers’ compensation EDI system. The system now allows for better matching.

Kentucky and Rhode Island are just the beginning of the discussion as states continue to ramp up Medicaid third party data matching and recoveries. Please join myself and Roy Franco on Wednesday, June 17th from 1:30-2:30 EDT for an exclusive webinar event to learn more. More information and registration link can be found here.

We hope you can join us!

Heather Schwartz Sanderson, Esq., MSCC, CHPE, CLMP, CMSP
Chief Legal Officer
Franco Signor LLC


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