Updates to Third-Party Liability (TPL) claims processing system
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This document governs updates to Rhode Island EOHHS's TPL claims processing rules that implement federal CAA 2022 requirements, affecting providers submitting Medicaid Fee-for-Service claims when another insurer denied payment for lack of prior authorization.
A new system edit (Edit 097) will automatically deny claims when another insurance carrier (excluding Medicare) refused payment solely because prior authorization was not obtained.
Specific denial criteria and codes for pharmacy and other claim types are defined (NCPDP codes 75, 3W, 3Y; TPL Adjustment Reason Code 197).
Effective date for applying the new denial rules is April 1, 2026; claims received on or after that date are subject to the rules.
Denial conditions and claim-type rules
Denial criteria by claim type
Claims will be denied under Edit 097 when they include the following rejection or adjustment codes from a non‑Medicare primary insurer:
ALL of the following
ANY of the following
- NCPDP code 75 — Prior Authorization Required
- NCPDP code 3W — Prior Authorization in Process
- NCPDP code 3Y — Prior Authorization Denied
- Exception: do not apply this denial rule when the primary coverage is Medicare Part C or Part D.
ALL of the following
- TPL Adjustment Reason Code 197 — Precertification/authorization/notification/pretreatment absent
- Exception: do not apply this denial rule when the primary coverage is Medicare Part A, Part B, or Part C.
Trigger codes and effective date
| 75 | Prior Authorization Required |
| 3W | Prior Authorization in Process |
| 3Y | Prior Authorization Denied |
| 197 | Precertification/Authorization Absent |
What providers must submit and watch for
Submit prior-authorization rejection codes with claims
When another insurer denied payment solely for lack of prior authorization, submit the corresponding reject codes with the claim so Edit 097 can be applied: for pharmacy claims submit the NCPDP reject codes 75 (Prior Authorization Required), 3W (Prior Authorization in Process), or 3Y (Prior Authorization Denied); for all other claim types submit TPL Adjustment Reason Code 197 (Precertification/authorization/notification/pretreatment absent).
- Pharmacy claims: include NCPDP code 75, 3W, or 3Y when the primary denied for missing prior authorization (excludes Medicare Part C and Part D).
- All other claims: include TPL Adjustment Reason Code 197 when the primary denied for missing prior authorization (excludes Medicare Part A, Part B, and Part C).
Key terms used in this policy
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