Michigan Nursing Home Administrator (NHA) Practice Exam

What is meant by 'first payor' in relation to Medicaid?

1. Medicaid pays first for all services rendered

2. Facility must bill Medicaid before any other insurance

3. Facility must exhaust other payers before billing Medicaid

4. Residents must have a Medicaid card for services

The correct answer is: Facility must exhaust other payers before billing Medicaid

The term 'first payor' in relation to Medicaid refers to the requirement that other potential sources of payment for healthcare services must be utilized before Medicaid will cover any costs. This means that if a resident has other health insurance or financial resources, those must be fully utilized to pay for services before Medicaid will step in to cover any remaining expenses. This concept is essential for the sustainability of Medicaid programs, as it ensures that public funds are used responsibly, with efforts to maximize the use of private or other available insurance before resorting to Medicaid. Medicaid is often viewed as the payer of last resort, which emphasizes this requirement. The other provided options do not accurately reflect the concept of 'first payor.' For instance, the idea that Medicaid pays first for all services or that the facility must bill Medicaid before any other insurance does not align with the principle of exhausting all other resources first. Similarly, the notion that residents must have a Medicaid card for services, while relevant, does not address the payment hierarchy that 'first payor' implies.