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Okay, maybe it was different because we used an agency, but our son was legally released to the custody of our agency, who then placed him with us, so the bills for our son went to them. They then turned around and sent it to us to, asking that we pay or remit to our insurance. I just had to call the hospital, explain that we were adopting baby X, and give them our insurance info. In the state of IL our insurance had to cover the baby from the time he was born. In an attempt to simplify things, I waited to call the hospital until I had a card for my son in my hand! That only took a couple of weeks.
I understand that Medicaid does not want to pay for anything that it can get someone else to pay for - but there has to be a reasonable solution. I was surprised how easy the hospital, agency, and insurance company made the whole process for us. Thank goodness! I had enough to deal with at the time!!!