Medical Assistance has long been known as the “payer of last resort” in the hierarchy of government and private entities providing health care coverage in the United States. Pharmacies in South Dakota have had the option though, for several years, to submit claims to Medical Assistance and receive payment without first submitting to other insurance coverage for payment of primary insurance benefits. Federal rules permitted State Medical Assistance agencies to “pay and chase” pharmacy claims in this fashion, that is, pay the pharmacy first and then attempt to identify and chase and recover benefits from private insurance policies and plans.
The Centers for Medicare and Medicaid Services (CMS), the Federal agency overseeing Medical Assistance operations, has recently instructed states, including South Dakota, to begin “cost avoiding” as many pharmacy claims as possible, denying claims whenever there is an indication of other insurance coverage and requiring pharmacies to collect first from liable parties that are primary to Medical Assistance. Pharmacies often use the term “split bill” or “dual bill” to identify this type of situation.
Effective October 1, 2004, South Dakota Medicaid implemented the federal government’s directive and began cost avoiding, asserting its payer of last resort status. Pharmacies are required to ask Medical Assistance recipients for proof of other insurance and submit to that insurance before submitting to Medical Assistance for payment of any co-payments, deductibles and non-covered drugs. Pharmacy claims submitted over South Dakota's Medical Assistance Point of Sale (POS) system is run against a data base of private insurance coverage known to the Department of Social Services and when other primary coverage is indicated the claim is denied until the pharmacy can provide proof of payment or denial of benefits by the policy or plan indicated.
For any questions or concerns please contact the following:
Provider Telephone Service Unit at 1-800-452-7691 (in-state providers only)
Out-of-state Providers may call 605-773-3495 and ask for the telephone service unit.