The Employee Benefits Security Administration has issued an advisory opinion discussing when Medicaid plans can sue group health plans over unpaid bills.

Lisa Alexander, coverage division chief at EBSA, an arm of the U.S. Department of Labor, has written the opinion, 2008-03A, in response to a question from Ginni Hain, an eligibility division director at the federal Centers for Medicare & Medicaid Services.

Hain wrote to ask EBSA what Medicaid plans should do when beneficiaries who also belong to employer-sponsored group health plans fail to follow the group plan preauthorization rules.

If a state Medicaid plan pays a beneficiary’s bill because of a pre-authorization failure, can the Medicaid plan sue to be reimbursed by the group health plan? Hain asks.

Section 609(b)(3) of the Employee Retirement Income Security Act permits Medicaid plans to sue group health plans over member medical bills that the plans had a legal obligation to pay, Alexander writes.

But the ERISA provision “limits the private employee benefit plan’s obligation to cases ‘in which a group health plan has a legal liability to make payment for items and services,;” Alexander writes.

If a group plan member violates plan preauthorization rules or other rules, “the [Labor Department] would not view the plan as legally liable to pay for the item or service,” Alexander writes.