Understanding Your Health Benefits: Third Party Liability Explained

Understanding Your Health Benefits: Third Party Liability Explained

Jul 18 2018

Ever wonder how your health insurance plan works alongside other coverage, like auto or homeowners insurance? You’re not alone.

Health insurance can be confusing all by itself. The long list of terms to understand is proof of that. But when you add in other layers of coverage like auto insurance, homeowners insurance, or workers’ compensation, the question of who covers what can get even more complex. The health insurance world refers to determining which parties are responsible to pay for what as “third party liability” and if you don’t know what that means or how your various insurance plans work together—no worries. We’re breaking it down here.

What is Third Party Liability?

Third Party Liability (TPL) is the legal obligation of a third party to pay part or all of the services furnished under a health plan. In some instances, these services are related to an accident or injury that is covered under a different insurer’s plan—such as auto or workers’ compensation insurance. This is called a “third party payer.”

At Priority Health, for example, the Third Party Liability department is a specialized area staffed by subject matter experts who examine and investigate claims that have been identified as having a high probability of TPL. The team investigates the claims by working to determine what other insurance plans may have an obligation to pay. Many times, these claims are identified by a member’s doctor or other health care provider when they submit claims for payment of health care services rendered.

What is the purpose of TPL?

The purpose of reviewing claims for TPL is to ensure all other available third party payers meet their legal obligations. In other words, the goal is to make sure the right insurance companies are paying the correct amounts according to the member’s coverage in various plans.

What are some examples of a third party payer?

Some examples of third party payers that may be liable to pay for a portion of your health care services are:

  • Auto insurance
  • Homeowners insurance
  • Workers’ compensation insurance

What happens to claims when they are under review by TPL?

Claims submitted to your health plan are reviewed by a team of experienced examiners who are trained to identify situations in which a third party payer could be responsible for charges on the claims. In these cases, the health plan might need more information about the circumstances related to a member’s treatment before they can process your claims. At Priority Health, when claims need an additional review to determine TPL—they are initially denied. This helps ensure Priority Health doesn’t inadvertently pay for something another third party payer is responsible to pay. While it can be concerning to see a claim denied in your records, this is actually a very standard precaution and is no cause for alarm.

What is my role as a member in the TPL process? 

While your claim is under review, your insurance plan will need your help in gathering important information. You’ll typically receive a letter requesting information related to your treatment or injury/condition. This information helps your health plan determine if another party is responsible for payment. The best thing you can do to make sure your claims are paid in a timely manner is to respond to requests for additional information as quickly as possible.

Examples of the important details your health plan will need to confirm are:

  1. When did the injury, condition or treatment occur?
  2. How did the injury/condition happen? (i.e. slip and fall, burn, animal bite, attack by another person, etc.)
  3. Is the injury/condition related to an automobile accident or contact with an automobile, motorcycle or moped?
  4. Is the injury/condition work-related?
  5. Where did your injury/condition occur? (i.e. store or other business, someone else’s home, sporting event, community park, etc.)

For this reason, when an accident or injury happens at home, at work or while traveling, recording a list of details to help answer the above questions is a good idea in case you need to share these details at a later date. You should do this regardless of whether or not there is an official police report, investigation or workers’ compensation claim.

Depending on the circumstances of the injury/condition, your health plan’s TPL team may need additional information about other applicable insurance coverage, such as your auto insurance, workers’ compensation insurance, business insurance, homeowners insurance, etc. Having a secure list of insurance plans you own and plan details including coverage dates can also be helpful to have on hand.

Once the TPL team receives all of the necessary information, they can typically take over from there.

“At Priority Health, our team of TPL specialists handles coordinating with the other payers on your behalf and getting your claims processed according to your health plan benefits. This is a service we’re proud to provide to our members as part of their health plan,” says Mark Herro, manager of Third Party Liability in Claims Administration at Priority Health.

What if you don’t respond to requests for information about your claims?

It’s important to know that your claim(s) will remain denied if you don’t respond. This means your doctor’s office or health care provider will not be paid for the services they provided to you. Those providers may eventually seek payment from you if you are not cooperating with requests for information. The best way to avoid this situation is respond to your health plan’s requests for information as soon as possible, and let your providers know your claim is under review for TPL with your health insurance plan.

What if a claim is not related to an accident/injury?

The only way your health plan will know if your claims are or are not related to an accident/injury is if you respond to their requests for information. Once your plan receives your response and determines no other party was responsible for your injury/condition, they will work to make sure your claims are processed as soon as possible according to your current health plan benefits.

How does TPL benefit members?

The TPL process is an integral part of containing the continuously rising cost of health care, which affects the premium costs paid by you and/or your employer.

“As a non-profit health insurance company, we aim to give back to our members since our goal is to provide our communities with quality care that’s accessible and affordable,” Herro added. “That’s why my team is so passionate about the TPL work we do as we’re reviewing claims. Priority Health spends close to 90 cents of every dollar on our members’ health care, so we want to make sure we account for every possible amount we can save to give back to members as we work to improve the health and lives of our communities.”

So remember, if an accident or injury happens—don’t forget the details. Record as much information as you can and be ready to share it as soon as your health plan requests additional facts.

Priority Health members can receive updates on pending claims by contacting us directly or logging into their online member account.

Not a Priority Health member? Check with your health insurance plan on their specific TPL process.