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Third Party Liability
What is a Third Party?
Federal law and regulations require states to ensure Medicaid beneficiaries use all other resources available to them to pay for all or part of their medical care before turning to Medicaid. The State Medicaid program pays only after the third party has met its legal obligation to pay.
A third party is any individual, entity, or program that is, or may be, liable to pay for any medical assistance provided to a Medicaid beneficiary under the approved state Medicaid plan. Third parties may include:
- Private health insurance
- Employment-related health insurance
- Parents court-ordered to pay medical support
- Automobile or property insurance
- Court judgments or settlements from a liability insurer
- State workers' compensation
- First party probate-estate recoveries; and/or
- Other federal programs (e.g., Indian Health, Community Health, and Migrant Health programs), unless excluded by statute.