Attorney General's Opinion

Attorney General, Richard Blumenthal

February 15, 2005

Honorable Patricia Wilson-Coker
Department of Social Services
25 Sigourney Street
Hartford, CT 06106-5033

Dear Commissioner Wilson-Coker:

This is in response to your request for an Attorney General's Opinion on whether the disclosure by the Department of Social Services ("DSS") to the Offices of the Connecticut Attorney General and the Connecticut Child Advocate of information concerning Medicaid medical assistance recipients, to be used in an investigation into the liability of insurance companies for the cost of services paid for by Medicaid, is provided for purposes directly connected with the administration of the Medicaid program, and is fully permitted by federal law.

As you know, the Offices of the Attorney General and the Child Advocate have undertaken a joint investigation of Connecticut's mental health care system for children. Although my office obviously is involved in the investigation itself, my view is that the urgent and clear public policy and legal answers to your inquiry fully justify our responding.

One important aspect of our investigation will be an analysis of whether health insurance companies have improperly refused to pay for treatment needed by mentally ill children enrolled in Medicaid, or other State assistance programs, thereby improperly shifting costs from the insurance companies to the taxpayers. To further this review, the Attorney General and the Child Advocate have requested DSS to furnish them with "paid claims" data showing details about the services DSS has paid for. Investigators plan to identify State-paid services delivered to children listed by DSS as insured by commercial health insurance plans. They will then audit claims on a sample basis, reviewing provider care records and interviewing patient families where appropriate, to conclude whether the services involved should have been covered by private insurance.

Medicaid is a federal program implemented at the state level through state plans that must comply with federal requirements in order to receive federal funding. See 42 U.S.C. § 1396a. In Connecticut the program is administered by DSS. Conn. Gen. Stat. § 17b-2. Because Medicaid is a "payor of last resort," 42 U.S.C. § 1369a(a)(25) requires states to implement "third party liability (TPL) programs" which "ensure that Federal and State funds are not misspent for covered services to eligible Medicaid recipients when third parties exist that are legally liable to pay for those services." Medicaid Programs; State Plan Requirements and Other Provisions Relating to State Third Party Liability Programs, 55 Fed. Reg. 1423, 1423-24 (1990). The Medicaid statute requires that each state agency administering the Medicaid program take measures to find out when third parties (like private insurers) are legally obligated to pay for services covered by the plan. See 42 U.S.C. § 1396a(25)(A). Each state plan must include a method of pursuing claims against such third parties. See id. If third party liability is discovered after medical care has been provided, the state agency must seek reimbursement from the third party. See 42 U.S.C. § 1396a(25)(B); Wesley Health Care Center, Inc. v. DeBuono, 244 F.3d 280, 281 (2nd Cir. 2001).

A State Medicaid plan must provide that, as a condition of eligibility, the recipient assign to the State any right the recipient has to payment for medical care from any third party. 42 U.S.C. § 1396k(a)(1)(A). The recipient must cooperate with the State by providing information and assisting the State in pursuing any liable third party. 42 U.S.C. § 1396k(a)(1)(C). Under Connecticut law, DSS is subrogated to the recipient's right to recovery from any private insurer or other third party. Conn. Gen. Stat. § 17b-265(a).

Federal law forbids DSS from disclosing information about Medicaid recipients unless the disclosure is for "purposes directly connected with the administration of the [Medicaid] plan." 42 C.F.R. § 431.300(a). As stated, DSS is obligated to pursue contributions that may be due from any private insurer, and recipients are required to assist in all third-party recovery efforts. Recipient information is sought to pursue an investigation seeking to determine whether private insurance companies have improperly refused to pay for treatment needed by mentally ill children enrolled in Medicaid or other State assistance programs. Accordingly, the information is sought "for purposes directly connected with the administration of the [Medicaid] plan," and is permitted by both federal and state law.

Very truly yours,


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