An official website of the United States Government -

Medicaid and TRICARE Third-Party Liability Coordination

Chapter 4 addresses a continuing challenge in Medicaid: protecting the safety-net program’s statutory role as the payer of last resort. By law, all other sources of coverage must pay claims under their policies before Medicaid will pay for the care of an eligible individual. This requirement is referred to as third-party liability (TPL) because payment is the responsibility of a third party other than the individual or Medicaid.

Coordinating TPL is important for two reasons. First, ensuring that the appropriate party pays for care helps preserve Medicaid funds to cover services for beneficiaries. Second, coordination of TPL limits cost shifting from private insurers and other federal programs to states, which pay more than one-third of program costs, and the federal portion of Medicaid, which pays the remaining two-thirds.

Chapter 4 focuses on TPL policy related to TRICARE, the Department of Defense program for civilian health benefits for U.S. Armed Forces military personnel, military retirees, and their dependents. MACPAC estimates that approximately 867,000 Medicaid enrollees have primary coverage through TRICARE, including approximately 220,000 children. Chapter 4 contains two recommendations to keep Medicaid from bearing costs that are the responsibility of the Department of Defense.

From: June 2020 Report to Congress on Medicaid and CHIP