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Reminders Regarding Third-Party Liability Billing

May 8, 2017

Medi-Cal Eligible Recipients
The Welfare and Institutions Code (W&I Code), Section 14019.3, requires that when Medi-Cal eligibility has been verified (by presentation of a Benefits Identification Card or by other proof of eligibility), a Medi-Cal provider seeking reimbursement from Medi-Cal shall submit a claim subject to the rules and regulations of the Medi-Cal program. Payment received from the state in accordance with Medi-Cal fee structures shall constitute payment in full. Medi-Cal providers must not attempt to obtain payment from Medi-Cal recipients for the cost of Medi-Cal covered health care services (see W&I Code, Sections 14019.4 and 14452.6).

Other Health Coverage/Balance Billing Prohibitions
W&I Code, Sections 14124.795 and 14124.90, provide that Medi-Cal is the payer of last resort. Generally, when known, a provider must bill a recipient’s Other Health Coverage before billing Medi-Cal. A Medi-Cal provider must not bill a third party after billing Medi-Cal because the Medi-Cal payment constitutes payment in full (regardless of the percentage of the provider’s billed amount).

The California Supreme Court in Olszweski v. Scripps Health (2003) 30 Cal. 4th 798 invalidated W&I Code, Section 14124.791, because it directly conflicted with federal law prohibiting “balance billing” of recipients. A provider billing Medi-Cal for services rendered to a Medi-Cal recipient may not assert a lien against a settlement, judgment or award obtained by a recipient.