Common use of Exceptions to the Cost Avoidance Rule Clause in Contracts

Exceptions to the Cost Avoidance Rule. 1. In the following situations, the contractor must first pay its providers and then coordinate with the liable third party, unless prior approval to take other action is obtained from the State. a. The coverage is derived from a parent whose obligation to pay support is being enforced by the Department of Human Services. b. The claim is for prenatal care for a pregnant woman or for preventive pediatric services (including EPSDT services) that are covered by the Medicaid program. c. The claim is for labor, delivery, and post-partum care and does not involve hospital costs associated with the inpatient hospital stay. d. The claim is for a child who is in a DYFS supported out of home placement. e. The claim involves coverage or services mentioned in 1.a, 1.b, 1.c, or 1.d, above in combination with another service. 2. If the contractor knows that the third party will neither pay for nor provide the covered service, and the service is medically necessary, the contractor shall neither deny payment for the service nor require a written denial from the third party. 3. If the contractor does not know whether a particular service is covered by the third party, and the service is medically necessary, the contractor shall contact the third party and determine whether or not such service is covered rather than requiring the enrollee to do so. Further, the contractor shall require the provider or subcontractor to ▇▇▇▇ the third party if coverage is available. 4. Postpayment recovery rather than cost avoidance is necessary in cases where the contractor was not aware of third party coverage at the time that services were rendered or paid for, or was unable to cost avoid, in accordance with the provisions of this Article as applicable. Under these circumstances, the contractor shall identify all potentially liable third parties and pursue reimbursement from them, unless prior approval to take other action is obtained from the State. In pursuing such recoveries, the contractor may utilize the State's assignment and subrogation authority to the extent permitted by State law. This provision shall not apply in the case of any tort matter but rather the provisions of Article 8.7D.3 shall be applicable.

Exceptions to the Cost Avoidance Rule. 1. In the following situations, the contractor must first pay its providers and then coordinate with the liable third party, unless prior approval to take other action is obtained from the State. a. The coverage is derived from a parent whose obligation to pay support is being enforced by the Department of Human Services. b. The claim is for prenatal care for a pregnant woman or for preventive pediatric services (including EPSDT services) that are covered by the Medicaid program. c. The claim is for labor, delivery, and post-partum care and does not involve hospital costs associated with the inpatient hospital stay. d. The claim is for a child who is in a DYFS supported out of home placement. e. The claim involves coverage or services mentioned in 1.a, 1.b, 1.c, or 1.d, above in combination with another service. 2. If the contractor knows that the third party will neither pay for nor provide the covered service, and the service is medically necessary, the contractor shall neither deny payment for the service nor require a written denial from the third party. 3. If the contractor does not know whether a particular service is covered by the third party, and the service is medically necessary, the contractor shall contact the third party and determine whether or not such service is covered rather than requiring the enrollee to do so. Further, the contractor shall require the provider or subcontractor to bill the t▇▇▇▇ the third party if coverage is available. 4. Postpayment recovery rather than cost avoidance is necessary in cases where the contractor was not aware of third party coverage at the time that services were rendered or paid for, or was unable to cost avoid, in accordance with the provisions of this Article as applicable. Under these circumstances, the contractor shall identify all potentially liable third parties and pursue reimbursement from them, unless prior approval to take other action is obtained from the State. In pursuing such recoveries, the contractor may utilize the State's assignment and subrogation authority to the extent permitted by State law. This provision shall not apply in the case of any tort matter but rather the provisions of Article 8.7D.3 shall be applicable.