Medicare secondary insurance - billing terms

Commonly Used Terms for MSP:

The following commonly used terms and field explanations will serve as a guide for submitting proper electronic MSP claims.

OTAF 

The Obligated To Accept as Payment in Full Amount (OTAF) is the amount the provider agreed to accept as payment in full for a service rendered under the provisions of the primary payer's contract. When a primary payer allows less than the billed amount and the provider is contractually obligated to accept that amount as payment in full then the allowed amount is the OTAF amount. Terms often seen on primary insurer Explanation of Benefits to indicate OTAF include but are not limited to: Contractual Adjustment, Network Discount, Provider Discount, Contract Write-off, Capitation Amount, PPO Discount, PPO Savings.

Contractual
Contractual Obligation is the difference between billed amount and Obligation primary allowed amount that cannot be billed to the beneficiary.

Patient Responsibility
Beneficiary responsibility is the amount that can be billed to the (PR) beneficiary, normally the difference between primary allowed amount and the primary paid amount. This amount can be equal to zero.

Approved Amount
Approved Amount is the amount of money approved by the primary payer. The allowed equals the amount for the service line that was approved by the payer.

Line Adjustments
Line adjustments are required if the primary payer made line level adjustments that caused the amount paid to be different from the amount originally charged. Line adjustment information is reported in the CAS segment, including the claim adjustment group code, claim adjustment reason code and the monetary adjustment amounts.

Line Adjudication
Line Adjudication segment is used to report the date the claim was adjudicated by the primary payer and is required on all MSP claims.

CAS Segment
CAS Segment is used to report the adjustment reason codes and amounts as needed.

Adjustment Reason
Adjustment Reason is used to report the adjustment on each service line such as co-insurance, deductible, contractual adjustment, etc. Example: The provider submits an MSP claim with the following:
$60 Billed Amount
$20 Network Discount
$40 Primary Allowed Amount
$10 Copayment Amount
$30 Primary Paid Amount

The $20 difference between the allowed and the billed amount will be a Contract Obligation (CO) adjustment. The $40 the primary allowed will also be the Obligated To Accept as Payment in Full (OTAF) amount. The $10 difference between the primary paid and the primary allowed will be a Patient Responsibility (PR) adjustment. The primary payment will be $30