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    v1.0.30
    OpenPayerPolicy UpdatesAdministrative/Operational PolicyAHCCCS Third-Party Liability Update | OpenPayer
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    CurrentArizona Health Care Cost Containment SystemPolicy 414

    Coordination of Benefits and Third-Party Liability

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    Governs contractor identification, coordination, cost avoidance, post-payment recovery, reporting, and audit activities for third-party liability involving AHCCCS members.

    Policy Summary
    PayerArizona Health Care Cost Containment System
    PolicyCoordination of Benefits and Third-Party Liability
    Policy CodePolicy 414
    Change TypeNo material change
    Effective DateMay 2, 2025
    Next Review DateNot specified
    Key ActionContractors must timely evaluate medical necessity and coverage for every requested service independently of potential third-party coverage or determinations.
    SourceLink
    POLICY UPDATE CHANGES

    No material clinical or coverage changes in this revision.

    2COB methods
    2 yearsCommercial-insurance recovery period
    3 yearsClaim recovery submission limit
    120 daysReplacement-file deadline
    Annual

    OpenPayer is powered by Trek Health's payer performance platform. Trek continuously ingests, validates, and normalizes Transparency in Coverage data alongside payer policies and other commercial payer data to create a structured payer intelligence foundation. OpenPayer uses this foundation to deliver personalized search results, dynamically generated policy pages, and tailored policy monitoring based on each user's payers, specialties, billing codes, and areas of interest. The same intelligence powers broader payer performance workflows, including reimbursement benchmarking, contract evaluation, payer negotiations, and financial decision-making.

    Provider credit-balance audits
    9Third-party exceptions

    Coordination of Benefits and Third-Party Liability

    COB and TPL Payment Rules

    The Contractor shall coordinate benefits and third-party liability (TPL) so that legally responsible sources pay for Title XIX and Title XXI services before AHCCCS, except where Federal or State provisions provide otherwise. The Contractor shall identify potentially liable third parties, make TPL information available through verification systems, communicate AAC R9-22-1003 responsibilities to subcontractors, and maintain COB activities independently from timely authorization determinations.

    COB and TPL payment rules

    • Contractor responsibilities

      • Take reasonable measures to identify potentially legally liable third-party sources and make third-party payer information available through Contractor verification systems; TPL information may also be obtained through AHCCCS verification systems.
      • Communicate the TPL responsibilities specified in AAC R9-22-1003 to subcontractors.
      • Coordinate benefits in accordance with 42 CFR 433.135 et seq., ARS 36-2903, AAC R9-22 Article 10 et seq., Federal and State law, and AHCCCS policy; for the referenced Federal regulations, the term State means Contractor.
      • COB and TPL activities do not relieve the Contractor of its responsibility to timely issue an authorization determination.

    • Medical-necessity and coverage determinations

      • Regardless of a member's TPL coverage, timely evaluate the medical necessity and coverage of a requested service even when the potential third party has not issued a determination.
      • Do not use a third-party denial as the basis for the Contractor's medical-necessity or coverage determination; independently and timely evaluate the request using the Contractor's own criteria.
      • When a third party has approved a service as medically necessary, do not apply a secondary prior authorization; coordinate payment with the third party and this policy.

    • AHCCCS payor-of-last-resort exceptions

      • AHCCCS is not the payor of last resort when the third party is Indian Health Services (IHS/638), including contract health.
      • AHCCCS is not the payor of last resort when the third party is Title IV-E.
      • AHCCCS is not the payor of last resort when the third party is the Arizona Early Intervention Program (AzEIP).
      • AHCCCS is not the payor of last resort when the third party is a local educational agency providing services under the Individuals with Disabilities Education Act and 34 CFR Part 300.
      • AHCCCS is not the payor of last resort when the third party is an entity or contractor providing services under grants awarded through the HIV Health Care Services Program under 42 USC 300ff et seq.
      • AHCCCS is not the payor of last resort when the third party is the Arizona Refugee Resettlement Program under 45 CFR Part 400, Subpart G.

    • COB methods and cost avoidance

      • Use cost avoidance and post-payment recovery as the two COB methods, as specified in AAC R9-22-1001 et seq., Federal and State law, and AHCCCS policy.
      • Unless a post-payment recovery provision applies, cost avoid a claim when the probable existence of liability has been established and another party is confirmed to be legally responsible by statute, contract, or agreement for payment of the healthcare item or service delivered to the member.

        For applicable payment provisions when cost avoiding a claim, refer to ACOM Policy 203.

      • Refer to ACOM Policy 201 for Contractor cost-sharing responsibilities for members covered by both Medicare and Medicaid.

    • Post-payment recovery and pay-and-chase

      • Post-payment recovery includes Pay and Chase, retroactive recoveries involving commercial insurance payor sources, and other TPL recoveries.
      • In pay-and-chase cases, pay the full claim amount according to the AHCCCS Capped-FFS Schedule or contracted rate and then seek reimbursement from the liable third party.

      • Use pay and chase when ANY of the following applies

        • The Contractor cannot confirm the probable existence of TPL.
        • The claim is for preventive pediatric services, including EPSDT and administration of vaccines to children under the Vaccines for Children (VFC) program. Covered preventive pediatric care includes screening and diagnostic services for congenital or physical or mental health conditions, routine examinations in the absence of complaints, and screening or treatment intended to prevent infectious or communicable diseases in children under age 21.
        • The claim is for TPL-covered services derived from an absent parent whose support obligation is being enforced by the Arizona Department of Economic Security, Division of Child Support Services.
    • Preventive pediatric services include immunizations; screening tests for congenital disorders; well-child visits; preventive medicine visits; preventive dental care; screening and preventive treatment for infectious and communicable diseases; therapies; and behavioral health exams.
    • Failure to perform COB activities consistent with this policy may subject the Contractor to Administrative Actions.

    Coding and Operational Timeframes

    ICD-10 trauma codes used for data-mining identification of potentially liable third partiesICD-10
    No codes listed
    Commercial-insurance tagging and recovery
    Recovery periodTwo years from the date of service
    Required actionRecover payments or identify (tag) claims with a reasonable expectation of recovery before the two-year period ends
    対象 claimsPaid claims involving commercial-insurance payor sources that were not known at the time of payment
    Claim recovery submission limit
    Submission limitThree years from the date of service
    Applies toClaims submitted for recovery
    Authority

    Contractor Responsibilities and Decision Rules

    Documentation Required

    Independently and timely review requested services

    Timely evaluate the medical necessity and coverage of every requested service regardless of the member’s potential third-party coverage or whether the third party has issued a determination.

    Denial Risk

    Do not rely on third-party denials

    Do not use a third-party denial as the basis for the medical-necessity or coverage determination. Independently and timely evaluate the member’s service request using the Contractor’s own criteria.

    Third-Party Liability Terminology

    Third-party
    Who may qualifyAn individual, entity, or program
    Potential responsibilityIs, or may be, liable to pay all or part of the expenditures
    Covered expendituresExpenditures for medical assistance furnished under a state plan
    Policy Summary
    PayerArizona Health Care Cost Containment System
    PolicyCoordination of Benefits and Third-Party Liability
    Policy CodePolicy 414
    Change TypeNo material change
    Effective DateMay 2, 2025
    Next Review DateNot specified
    Key ActionContractors must timely evaluate medical necessity and coverage for every requested service independently of potential third-party coverage or determinations.
    SourceLink
    On This Page
    Coordination of Benefits and Third-Party LiabilityCoding and Operational TimeframesContractor Responsibilities and Decision RulesThird-Party Liability Terminology
  1. AHCCCS is not the payor of last resort for Substance Use Block Grant (SUBG), Mental Health Services Block Grant (MHBG), or any other awarded grant.
    2. Consistent with ARS 36-2923 and 42 USC 1396a(a)(25)(I)
    External encounter replacement-file deadline
    DeadlineWithin 120 days from completion of the recovery project
    Required submissionAn external replacement file to directly update impacted encounters
    Submission methodVia an AHCCCS-approved vendor using the prescribed AHCCCS file format
    Provider credit-balance audits
    Minimum frequencyAt least annually
    Review formatOnsite or remote reviews
    Audit purposeIdentify accounts receivable credit balances
    Prior Authorization

    Do not require secondary prior authorization

    When a third party has approved a service request as medically necessary, do not apply a secondary prior authorization. Coordinate payment with the third party in accordance with the policy.

    Documentation Required

    Maintain and communicate TPL information

    Identify potentially legally liable third-party sources and make third-party payer information available through the Contractor’s verification systems for use. Communicate the TPL responsibilities specified in AAC R9-22-1003 to subcontractors.

    Billing Rule

    Apply required COB methods

    Use both required COB methods—cost avoidance and post-payment recovery—as specified in AAC R9-22-1001 et seq., federal and state law, and AHCCCS policy. Failure to perform COB activities consistent with the policy may result in administrative actions.