How Does Medicaid Work?

Eligibility for Medicaid is determined by the Division of Public Assistance according to federal and state rules. The case worker will look at age, income, assets, disability status, and other factors to determine what eligibility category may work. ( Use This Linkfor program and services applications.) Once determined eligible, the individual will be assigned a unique identification number and issued a Medicaid coupon, which contains information on removable labels.

For the most part, recipients are able to choose their own health care provider, but before Medicaid will pay the medical bill, the provider must be enrolled with the Medicaid program. When services are provided, the enrolled provider removes one of the labels and sticks it on a special claim form. Some providers are also able to submit claims electronically. All prescription drug claims are submitted electronically. Before Medicaid reimburses the provider, a claim review is done to make sure the claim fits within acceptable medical and fiscal guidelines.

Reimbursement rates for physicians and other private practice providers are established according to a methodology that assigns a relative value to the service provided. Hospital and nursing home rates are established by a special rate setting commission. Except for established recipient cost sharing amounts, providers must agree to accept the Medicaid rate as full reimbursement and not require the recipient to pay more.