what is Medicare as secondary payer - different situation

Medicare Second Payer

Medicare Secondary Payer (MSP) is the term used by Medicare when Medicare is not responsible for paying first. (The private insurance industry generally talks about "Coordination of Benefits" when assigning responsibility for first and second payment.)

The term "Medicare Secondary Payer" is sometimes confused with Medicare supplement. A Medicare supplement (Medigap) policy is a private health insurance policy designed specifically to fill in some of the "gaps" in Medicare's coverage when Medicare is the primary payer. Medicare supplement policies typically pay for expenses that Medicare does not pay because of deductible or coinsurance amounts or other limits under the Medicare program.

Precedence of Federal Law

Federal law takes precedence over State law and private contracts. Thus, for the categories of people described below, Medicare is the secondary payer regardless of state law or plan provisions. These Federal requirements are found in Section 1862(b) of the Social Security Act {42 USC Section 1395y(b)(5)}. Applicable regulations are found at 42 CFR Part 411 (1990).

More information on MSP laws and regulations is available through the CMS Laws and Regulations Portal. The link to the CMS Laws and Regulations Portal is located below.

Responsibilities of Beneficiaries Under MSP

As a beneficiary, we advise you to:

• Respond to Initial Enrollment Questionnaire (IEQ) and MSP claims development letters in a timely manner to ensure correct payment of your Medicare claims,
• Be aware that changes in employment, including retirement and changes in health insurance companies may affect your claims payment,
• When you receive health care services, tell your doctor and other providers and the Coordination of Benefits (COB) Contractor about any changes in your health insurance due to you, your spouse, or a family member's current employment or coverage changes,
• Contact the COB Contractor if you take legal action or an attorney takes legal action on your behalf for a medical claim,
• Contact the COB Contractor if you are involved in an automobile accident, and
• Contact the COB Contractor if you are involved in a workers' compensation case.

Responsibilities of Providers Under MSP

As a Part A institutional provider (i.e. hospitals), you should:

• Obtain billing information prior to providing hospital services. It is recommended that you use the Centers for Medicare & Medicaid Services' (CMS') questionnaire, or a questionnaire that asks similar types of questions; and
• Submit any MSP information to the intermediary using condition and occurrence codes on the claim.

As a Part B provider (i.e. physicians and suppliers)

• Follow the proper claim rules to obtain MSP information such as group health coverage through employment or non-group health coverage resulting from an injury or illness;
• Inquire with the beneficiary at the time of the visit if he/she is taking legal action in conjunction with the services performed; and,
• Submit an Explanation of Benefits (EOB) form with all appropriate MSP information to the designated carrier. If submitting an electronic claim, provide the necessary fields, loops, and segments needed to process an MSP claim.

Responsibilities of Employers Under MSP

As an employer, you must:

• Assure that your plans identify those individuals to whom the MSP requirement applies;
• Assure that your plans provide for proper primary payments where by law Medicare is the secondary payer;
• Assure that your plans do not discriminate against employees and employees' spouses age 65 or over, people who suffer from permanent kidney failure, and disabled Medicare beneficiaries for whom Medicare is secondary payer; and,
• Accurately complete and submit Data Match reports timely on identified employees.

Group Health Plans (GHP)

An employer cannot offer, subsidize, or be involved in the arrangement of a Medicare supplement policy where the law makes Medicare the secondary payer. Even if the employer does not contribute to the premium, but merely collects it and forwards it to the appropriate individual's insurance company, the GHP policy is the primary payer to Medicare.

Responsibilities of Attorneys Under MSP

As an Attorney, you must:

• Immediately, upon taking a case, that involves a Medicare beneficiary, inform the COB Contractor about a potential liability lawsuit, and
• Contact the assigned lead contractor regarding Medicare's interest in a liability, auto/no-fault, or workers' compensation lawsuit.

Responsibilities of Insurers Under MSP

As a GHP insurer, you must:

• Report to the COB Contractor if you find that CMS has paid primary when you are primary to Medicare (i.e. 411.25).

As a Non-GHP Auto/Liability Insurer, you must:

• Contact the COB Contractor immediately when the individual you insure is a Medicare beneficiary.

MEDICARE SECONDARY PAYER (MSP) summary list


Until 1980, Medicare was the primary payor for all Medicare covered services except for services covered by Workers Compensation or Black Lung benefits or paid for by the Department of Veterans Affairs or Other Government Entities. Since 1980, a series of changes in the Medicare law has shifted costs from the Medicare program to private sources of payment.

Federal regulations require healthcare providers to know when they can bill Medicare as the primary or secondary payer. Failure to properly determine the primary payer is a violation of the provider agreement with Medicare. Medicare considers it a fraudulent and abusive practice when a provider regularly submits claims that are the responsibility of another insurer under the MSP provision
.
Presently, Medicare is the secondary payer for individuals

Ø Who are aged 65 or older and currently working with coverage under an employer-sponsored or employee organization group health plan,

Who are aged 65 or older and are covered by a working spouse’s EGHP or employee organization group health plan,

Ø Who are under age 65, disabled, and are covered by a LGHP due to their own or other family members current employment status,

Ø Who receive services covered under Workers Compensation, Federal Black Lung, Automobile, No-Fault, or Liability insurance plans

Ø Who receive services covered under the Veteran Administration

Beneficiaries entitled to Medicare solely on the basis of ESRD, during a 30 month coordination period

Ø Working Aged

Medicare as secondary payer - Full details

When Medicare As Secondary Payer

Until 1980, Medicare was the primary payer for all Medicare covered services except for services covered by workers' compensation or black lung benefits or paid for by the Department of Veterans Affairs or other government entities. Since 1980, a series of changes in the Medicare law has shifted costs from the Medicare program to private sources of payment. Presently, Medicare is the secondary payer for individuals:

• Who are aged 65 or older and currently working with coverage under an employer-sponsored or employee organization (such as a union) group health plan.
• Who are aged 65 or older and are covered by a working spouse's employer group health plan or employee organization (such as union) group health plan.
• Who are under age 65, disabled, and are covered by a large group health plan due to their own or other family member's current employment status.
• With kidney failure. Medicare is the secondary payer during the Coordination of Benefits (COB) period if they have coverage
• under their own, a spouse's, or other family member's employer-sponsored or employee organization group health plan.
• Who receive services covered under Workers' Compensation, Federal Black Lung, automobile, no-fault, or liability insurance plans.
• Who receive services covered under the Veteran Administration.

a. Working Aged

Medicare is secondary payer for individuals aged 65 or older who are currently working and have coverage through an Employer Group Health Plan (EGHP). Medicare is also secondary if the beneficiary has coverage through an employed spouse of any age. In order to meet the Working Aged provision, the employer must have at least 20 employees working for the company. At times, 2 or more smaller employers combine to provide coverage. As long as at least 1 employer has 20 or more employees, the requirement is met.
Medicare is primary in the following situations:
Individuals who are enrolled in Medicare Part B only.
Individuals enrolled in Medicare Part A on the basis of a monthly premium.
EGHP plans where there is less than 20 employees and the employer does not combine with another employer with more than 20 employees.
Individuals covered by a health plan that is not provided by Group Health Plan (GHP). An example would be a plan that is purchased by an individual privately rather than through a group plan.
A plan provided through retirement resulting from past employment. For Medicare to be secondary, the coverage must be the result of current employment status. The Medicare beneficiary may be retired and have retiree coverage. If the spouse is still employed and provides coverage, this coverage will be primary to Medicare.
a.1 Vow of Poverty Provision
The Omnibus Budget Reconciliation Act of 1993 makes an exemption from MSP provisions for members of a religious order who have taken a vow of poverty retroactive to 1981. Employers must certify that an individual has taken a vow of poverty. Medicare is then considered the primary payer for such individuals, (i.e., nuns, priests, etc.)

b. Disability
Effective August 10, 1993, Medicare is secondary payer for individuals under age 65 who are entitled to Medicare due to disability and are covered by a Large Group Health Plan (LGHP). Medicare secondary payer status for disabled Medicare beneficiaries is based on the "current employment status" of the beneficiaries, their spouses or any other family member. An individual has "current employment status" if the individual is actively working as an employee, the employer, or is associated with the employer in a business relationship.

Prior to August 10, 1993, Medicare was secondary for active individuals under age 65, entitled to Medicare due to disability and covered by a LGHP through a relationship to an employer (i.e. employed or retired beneficiary, spouse or other family member). This provision was based on the "active individual" concept rather than the employment status.

Those disabled beneficiaries who have LGHP coverage as a result of their own or a family member's "current employment status" will continue to have Medicare as the secondary payer. Those disabled beneficiaries who do not have primary coverage with a LGHP because they do not have nor does a family member have "current employment status" will have Medicare as the primary payer.

A LGHP is defined as a plan sponsored or contributed to by an employer or employee organization (union). A LGHP provides medical benefits to employees who are currently working for an employer with 100 or more employees. If more than one employer combines to provide health coverage to their employees and at least one of the employers has 100 or more employees, the requirement is met.

Medicare is primary in the following situations:
Individuals who work for employers of fewer than 100 employees;
Individuals who are covered by a LGHP as the result of past employment (i.e. former retired employee or family member) and whose coverage is not based on "current employment status;"
Individuals who are covered by a health plan that is not provided by a LGHP. An example would be a plan that is purchased privately by an individual rather than through a group plan;
Individuals who have COBRA continuation coverage since it is not based on "current employment status."


c. End Stage Renal Disease (ESRD)
Medicare is secondary payer to group health plans (GHP) for individuals eligible for or entitled to Medicare based on ESRD during a Coordination of Benefits (COB) period. This provision differs from other MSP laws as it applies regardless of the number of employees employed by the employer or their employment status, active or retired. The ESRD provision applies to former as well as current employees. The provision applies where an individual is eligible for Medicare based on ESRD but who has not filed an application for entitlement to Medicare. This provision also applies when an individual is entitled based on ESRD only.
c.1 Coordination of Benefits Period
The Coordination of Benefits period defines the time frame that Group Health Plan benefits pay first, or primary, and Medicare pays second. The COB period begins with the earlier of the first month of entitlement or eligibility for Medicare Part A based on ESRD. Eligibility refers to the first month the individual would have become entitled to Medicare Part A on the basis of ESRD if the individual had filed an application for such benefits.

The length of the coordination of benefits periods has changed several times through the enactment of Medicare laws. If entitlement began before November 5, 1990, Medicare was the second payer for 12 months. If the COB began between November 5, 1990 and March 1, 1996, Medicare was the second payer for 18 months based on the OBRA 1990 law. Effective March 1, 1996, coordination of benefit period is in effect for 30 months. Section 4631(b) of the Balanced Budget Act of 1997, permanently extends the COB for 30 months.
c.2 Dual Entitlement
Medicare entitlement based on ESRD and aged or disability is considered dual entitlement. For example: An individual may be entitled to ESRD and then become entitled based on aged or disability. Or, an individual may be entitled to Medicare based on aged or disability and then develop ESRD.

Anytime an individual is entitled to Medicare for 2 different reasons, they are considered dually entitled. Prior to August 10, 1993, Medicare became primary or first payer on the first day of the month an individual became dually entitled.

The enactment of OBRA 1993 on August 10,1993, changed how dual entitlement affects the coordination of benefits period. Under this law, group health plans must continue to pay primary benefits even if the individual becomes dually entitled during the COB period. If the individual’s entitlement to Medicare was on the basis of aged or disability, and then they became entitled based on ESRD, GHPs were required to pay primary for the COB period. If the GHP was a supplemental plan at the time the individual became entitled based on ESRD, the GHP had to convert to primary payment for the COB period. If the individual did not have GHP coverage, Medicare remained primary in this situation.
c.3 Court Injunction
On May 5, 1995, a lawsuit was filed in the United States District Court, challenging the implementation of one aspect of the OBRA'93 provisions involving beneficiaries who have supplemental group health plan coverage. The court issued a preliminary injunction order on June 6, 1995 that prevents Medicare from applying the rule to services furnished between August 10, 1993 and April 24, 1995 to claims involving GHP retirement coverage pending the court's decision.
c.4 ESRD Entitlement Notes
If an individual has more than one period of Part A eligibility or entitlement based on ESRD, a coordination period is determined for each period of eligibility when the individual has GHP coverage.
Entitlement/Eligibility to Medicare based on ESRD ends 12 months after the month the individual no longer requires maintenance dialysis or 36 months after the month of a successful kidney transplant.
c.5 Effect of COBRA Continuation Coverage on ESRD MSP Provision
COBRA (Consolidated Omnibus Budget Reconciliation Act) requires that certain GHPs offer continuation of plan coverage for 18 to 36 months after the occurrence of certain qualifying events. An example of such an event would be loss of employment or reduction of employment hours. These events could result in loss of GHP coverage unless the individual is given the opportunity to elect continued plan coverage at their own expense. Typically Medicare is primary to COBRA plans with limited exceptions.

COBRA plans may terminate coverage upon entitlement to Medicare with one exception. The exception is that a COBRA plan may not terminate continuation coverage of an individual and his/her qualified dependents if the individual retires on or before the date the employer eliminates regular plan coverage by filing for Chapter 11, Bankruptcy. In this instance, if COBRA coverage overlaps the ESRD MSP coordination period, Medicare is secondary. Medicare will also be secondary if the COBRA plan voluntarily chooses to remain in effect even though they are not obligated to do so under COBRA provisions.

d. Worker's Compensation
Medicare is secondary to Worker's Compensation benefits if the patient is being treated for a work related illness or injury. If the claim is contested, pending the Worker's Compensation Board decision, the physician/supplier may bill Medicare first. A statement should be included on the claim form indicating that the worker's compensation claim is being contested.

Claims for beneficiaries who may have worker's compensation insurance will suspend for manual review to determine whether the services are related to a work illness or injury. If the services are obviously not related to a work illness or injury, the claim will be released for final processing.
Physicians/suppliers should complete item 10a of the CMS 1500 claim form if the services are not provided for diagnosis and treatment of a work related illness or injury.

e. Veterans Administration
Veterans entitled to Medicare may choose one of the programs to be responsible for payment of services covered by both programs. If the veteran elects Medicare coverage, it is not necessary to submit a claim to the Veterans Administration (VA) for a denial before submitting the claim to Medicare. Claims submitted to Medicare will be processed without development, assuming that Medicare coverage and eligibility requirements are met.

Claims cannot be submitted to both programs for the same dates and types of treatment. If a veteran elects Medicare coverage, a claim should not be submitted to the VA for the Medicare deductible or co-insurance.
e.1 Submission of Claims to Medicare or the VA
Submit claims to the VA as follows:
When hospital care was authorized by the VA in advance, or within 72 hours of admission.
When outpatient medical services were authorized by the VA in advance. (NOTE: a VA Fee Basis ID card is not considered by Medicare to be an authorization, and the veteran retains his or her right to elect VA or Medicare coverage.)
When care was not authorized by the VA in advance, the veteran is eligible for payment for care as an unauthorized service, and the veteran chooses to submit a claim to the VA for unauthorized services rather than utilizing Medicare benefits.
Submit claims to Medicare as follows:
When a veteran is eligible for Medicare benefits and hospital care was not authorized by the VA in advance, or within 72 hours of admission. (For services billable on Form 1450, the Medicare provider should enter condition code 26 in field locator 35-39.)
When a veteran is eligible for Medicare benefits, has a VA Fee Basis ID card and elects Medicare coverage over VA.
When a veteran is eligible for Medicare benefits and has no prior authorization from the VA for care—unless the veteran is eligible for payment for care as an unauthorized service, and the veteran chooses to submit a claim to the VA for unauthorized services rather than utilizing Medicare benefits.
When a veteran is eligible for Medicare benefits, and the VA has authorized care for only a part of the hospital treatment period. A denial from the VA is not needed prior to submitting a claim to Medicare.
VA advance authorization for care will be via sharing agreement, contract, or written communication. Telephone authorization may be granted in emergency situations. All telephone authorizations are documented by the VA at the time the authorization is granted.

Any VA authorization for an inpatient is terminated when the veteran is determined by VA to be stable for transfer to a VA facility, or the veteran states that he or she is not willing to be transferred to a VA facility for continued treatment upon stabilization.
Medicare and VA will be performing periodic computer data matches to assure that instances of duplicate payment are identified. When duplicate payments are found, Medicare will pursue recovery of its payment, and will develop information for potential referral to the Internal Revenue Service or the Office of Inspector General.
e.2 Incarcerated Beneficiaries
Medicare is secondary payer for services furnished to individuals in the custody of penal authorities. The state (or other government component which operates the prison) in which the beneficiary resides is responsible for all medical costs incurred. Medicare is primary only if the following conditions are met:
State or local requires those individuals or groups of individuals to repay the cost of the medical care incurred while in custody.
The state or local government entity enforces the requirement to pay by billing the incarcerated individual, whether or not covered by Medicare or any other health insurance.

f. Automobile Accident
Medicare is secondary to all accident related claims. Beneficiaries may not choose which of these claims will be paid by the automobile insurance and which claims will be paid by Medicare. Providers should submit all accident related claims to the automobile insurance before submitting them to Medicare. To avoid late claim filing, claims may be submitted to Medicare even though payment has not been received from the automobile insurer. In addition, conditional payment can be made by Medicare if 1) the automobile insurance will not pay promptly (within 120 days); or 2) due to physical or mental incapacity, the beneficiary fails to meet the claim filing requirements of the automobile insurer. Conditional payments are made on the condition that the beneficiary will reimburse Medicare if payment is later made by the automobile insurer.

If the automobile insurance benefits are exhausted, Medicare requires a statement of exhaustion from the automobile insurer. The itemized statement must include: the dates of service paid and the actual provider who was reimbursed. Note: Claim processing will be denied without this information.

Providers should complete item 10 of the CMS 1500 claim form if the services are related to an automobile accident. If there is information on our files which indicates that a beneficiary has been involved in an automobile accident, the claim will suspend for manual review. If the details referenced on the claim are not sufficient information to process the claim, a questionnaire will be sent to the beneficiary. If a response is not received from the beneficiary within 45 days, the claim will be denied.

g. No-Fault Insurance
Medicare is secondary to all types of insurance that pay for medical expenses for injuries sustained on the property or premises of the insured, regardless of who caused the accident. This type of insurance includes homeowners and commercial plans. It may also be referred to as medical payments coverage, personal injury protection (PIP), or medical expense coverage.

Providers should follow the claims submission guidelines described in the automobile accident section in this chapter. The exhaustion of benefits and conditional payment rules also apply to no-fault insurance.

Medicare does not pay for services paid for or authorized by governmental entities.

h. Liability Insurance
Liability insurance is insurance (including a self-insured plan) that provides payment based upon legally established responsibility for injury, illness or damage to property. It includes, but is not limited to automobile liability and general casualty insurance. It includes payments under State "wrongful death" statues that provide payment for medical damages.

Providers are required to ask Medicare patients, or their representatives, if the services are for treatment of an injury or illness that resulted from an automobile accident or other incident for which the patient holds another party responsible. The provider should obtain the name, address, and policy number of any automobile or non-automobile liability insurance, no fault insurance, or any other party that may be responsible for payment of medical expenses that result from an accident or injury.

Where a provider has reason to believe that he/she provided services to a Medicare beneficiary for whom payment under liability insurance may be available, the provider may:
Within the 120 day promptly period, the provider must bill only the liability insurer unless there is evidence that the liability insurer will not pay within the 120 day promptly period. If the provider has such evidence, he/she may bill Medicare for conditional payment, provided that documentation is supplied to support the fact that payment will not be made promptly; or
After the 120 day promptly period has ended, the provider may, but is not required to, bill Medicare for conditional payment if the liability insurance claim is not finally resolved. If the provider chooses to bill Medicare, he/she must withdraw claims against the liability insurer or a claim against the beneficiary's settlement. If the provider chooses to continue with a claim against the liability settlement, the provider may not bill Medicare.
h.1 If a provider participates in the Medicare program
Provider bills Medicare - The provider must accept the Medicare approved amount as payment in full and may charge beneficiaries only for deductible and coinsurance; or Provider pursues liability insurance - The provider may charge the beneficiaries actual charges up to the amount of the proceeds of the liability settlement, but he/she may not collect payment from the beneficiary until after the proceeds of the liability insurance are available to the beneficiary.
h.2 If a provider does not participate in the Medicare program:
Provider bills Medicare accepting assignment - The provider may accept the Medicare approved amount as payment in full and may charge the beneficiaries only for deductible and coinsurance; or
Provider bills Medicare not accepting assignment - The provider may charge beneficiaries no more than the limiting charge and may collect without regard to whether the liability insurance is available to the beneficiary.
For services for which there is no Medicare coverage available regardless of whom furnishes them, the provider may charge and collect actual charges from beneficiaries without regard to whether the proceeds of liability insurance are available to the beneficiary.

i. Black Lung Benefits
Medicare is secondary for beneficiaries who have medical benefits under the Federal Black Lung Program. Medicare is secondary only for services provided for the treatment of lung conditions caused by mining. Claims for beneficiaries entitled to benefits under the Federal Black Lung Program may suspend for manual review. If the diagnosis or services reported on the claim are not related to the black lung condition, Medicare is primary and the claim will be released for final processing.

For some beneficiaries entitled to the Federal Black Lung Program, the coal mine operator is responsible for medical benefits. In these cases, providers should submit the claims to the coal mine operator or its Workers' Compensation plan for processing.

j. Primary Insolvency
In accordance with the Centers for Medicare & Medicaid Services (CMS) requirements, when a primary payer becomes insolvent, Medicare payments will not be made unless the claim is accompanied by an Explanation of Benefits from the receiver (substitute primary payer decided on by the courts) and the court order of payment.

Physicians and suppliers who accept assignment may not collect or seek payment from the beneficiary or their estate for any Medicare covered service(s) during the primary insurer's insolvency process. Providers should file their claims with the primary insurer or the receiver if they have not already done so.

The receiver will determine the full primary payment to be made. Once you have been paid by the receiver, you may bill Medicare for secondary payments, if appropriate. You will have six (6) months from the date of the receiver's Explanation of Benefits to file a claim for secondary payments with Medicare. If the claim is received after the six month filing limit, it will be processed as untimely.

In order for Medicare to process these claims for secondary payment, please provide the following:
A hard copy of the claim;
An Explanation of Benefits from the receiver;
A copy of the court order that addresses this issue.

k. Employer Plan HMO Coverage
The Centers for Medicare & Medicaid Services has clarified that providers are responsible for submitting claims to Medicare for secondary payment consideration when the primary insurer is a Health Maintenance Organization (HMO). Medicare may consider secondary payment for all or part of an employer-sponsored HMO's copayment.

An HMO pays providers a monthly capitation fee to care for its members. Because of this reimbursement, there are no billed charges for the rendered services. Medicare will consider the Medicare fee schedule amount as the billed charge. This amount will also be considered the primary insurer's allowed amount in calculating Medicare liability. The Medicare claim form submitted for the HMO copayment can be completed with standard information:
Item 24F (charges) – Enter the charge for each listed service
Item 28 (total charge) – Enter total charges for the services (i.e., total of all charges in item 24f)
Since providers collect HMO copayments at the time of service, a copayment receipt signed by the beneficiary must be submitted with the claim. The receipt will be accepted in lieu of the primary benefits statement or explanation of benefits (EOB) required in all other Medicare secondary payer situations. The receipt must clearly indicate "HMO copayment." To assist you with this requirement, you may copy the form shown below and use it for this purpose.
When an acceptable co-payment receipt is not submitted with a claim, payment for these services may be delayed or could result in a denial of the claims. HMO co-payment receipts submitted with Medicare Secondary Payer claims should meet certain requirements.
The original co-payment receipt, signed by the beneficiary on the date they were seen should be attached to the claim form.
should be one receipt for each date of service submitted on the claim form.
If the patient did not pay the co-pay at the time of the service, a co-pay receipt should not have been submitted with the claim. A receipt should only be issued to the patient if the patient paid the co-pay at the time of their service.
Medicare will send any reimbursement for non-assigned claims submitted for HMO copayment to the beneficiary. For assigned claims submitted for HMO copayment, Medicare's payment will be sent to the provider who in turn must reimburse the beneficiary.

k.1 Services Obtained Outside the HMO Plan
Generally, Medicare will not pay for services obtained from a source outside the HMO plan. If a beneficiary wants or needs to go to a provider outside the plan, an authorization must be obtained from the HMO plan. If authorization is not obtained, the HMO will not make payment. If the beneficiary has not been notified in writing of this rule and the HMO will not make payment, Medicare will process the claim for payment. Once the beneficiary has been notified, Medicare payment will not be made for future services obtained outside the plan.

When Medicare Pays First, Second or Even Third

When Medicare began in the 1960s, it was the primary payer for all services except those covered by workers compensation. Then in 1980, Congress enacted provisions to shift costs from the Medicare program to private insurers, when possible. This legislation stopped Medicare from making payment if the payment has already been made, or would be expected to be made, by Group Health Plans (GHP) and Workers Compensation (WC) Plans.

Medicare Pays First When:
• You have retiree insurance (from either you or your spouse’s former employment)
• You’re 65 or older, have group health plan coverage based on your spouse’s current employment, and that employer has less than 20 employees
• You’re under 65 and disabled, have group health plan insurance based on your or a family member’s current employer, and that employer has less than 100 employees
• You’re also receiving Medicaid benefits
Note: If you have group health care plan coverage that is primary to Medicare (pays first), it will continue to do so until it pays up to the limits of its coverage. Then Medicare becomes primary.

Medicare Pays Second When:
• You’re 65 or older, have group health plan coverage based on your spouse’s current employment, and that employer has 20 or more employees
• You’re under 65 and disabled, have group health plan insurance based on your or a family member’s current employer, and that employer has 100 or more employees
• You have End-Stage Renal Disease (ESRD) and you are in the first 30 months your Medicare eligibility. Then Medicare pays first after that.
• You’re covered by no-fault or liability insurance for an services related to an accident


Insurance that pays after Medicare is referred to as supplemental insurance. Your retiree coverage may act as supplemental insurance or you may purchase a Medigap policy from a private insurance company.
Medicare works supplemental insurance companies through a process called ‘crossover.’ Crossover is an automatic claim filing service used by Railroad Medicare and Medicare Part B contractors to send claim information to your supplemental insurance after Palmetto GBA has processed a Medicare claim for you. This saves you the time of filing a claim with your supplemental insurer.

In order for you to be in the crossover program, you must enroll with your supplemental insurer. Once you have enrolled, Railroad Medicare will receive, on a regular basis from the supplemental insurer, a list of patients in the crossover program. Once the lists are received from the crossover companies, claim information is electronically compared with the list to determine if there is a match.

If there is a match, the information is transferred to the requesting crossover company. The information forwarded to the requesting company is similar to the information provided on a Medicare Summary Notice (MSN). If your name and Health Insurance Claim (HIC) number appear on the list, your claims processed during that month will be forwarded to your supplemental insurer. You may be enrolled in the crossover program with more than one supplemental insurer. You can only enroll in the crossover program through your supplemental insurer, not through Railroad Medicare. Likewise, if you want to stop the crossover program, you must do this through your supplemental insurer.

If your supplemental insurance does not participate in crossover with Medicare, you will be responsible for ensuring your insurance receives information about claims Medicare has processed. Many providers will file claims to your supplemental insurance after Medicare has processed your claim. If you provider will not file to your supplemental insurance, contact the plan to verify what information they will need to process a claim. Many supplemental insurance plans will ask you to send a copy of your Medicare Summary Notice (MSN). If you need an MSN, you may request one from our Customer Service unit.

Medicare Secondary Payer (MSP) Group Health Plan (GHP) Working Aged Policy-- Definition of “Spouse;” Same-Sex Marriages

Provider Action Needed

Section 3 of the Defense of Marriage Act (DOMA) provided for purposes of federal law, the term “spouse” could not include individuals in a same-sex marriage. Because the MSP Working Aged provisions only apply to subscribers and their spouses, the Working Aged provisions did not apply on the basis of spousal status to individuals in a same-sex marriage.

The United States Supreme Court has invalidated this DOMA provision. Thus, the Centers for Medicare & Medicaid Services (CMS) is no longer prohibited from applying the MSP Working Aged provision to individuals in a same-sex marriage.

Effective January 1, 2015, the rules below apply with respect to the term “spouse” under the MSP Working Aged provisions. This is true for both opposite-sex and same-sex marriages.

• If an individual is entitled to Medicare as a spouse based upon the Social Security Administration’s rules, that individual is a “spouse” for purposes of the MSP Working Aged provisions.

• If a marriage is valid in the jurisdiction in which it was performed including one of the 50 states, the District of Columbia, or a U.S. territory, or a foreign country, so long as that marriage would also be recognized by a U.S. jurisdiction, both parties to the marriage are “spouses” for purposes of the MSP Working Aged provisions.

• Where an employer, insurer, third party administrator, Group Health Plan (GHP), or other plan sponsor has a broader or more inclusive definition of spouse for purposes of its GHP arrangement, it may (but is not required to) assume primary payment responsibility for the “spouse” in question. If such an individual is reported as a “spouse” through the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) Section 111, Medicare will pay accordingly and pursue recovery, as applicable.

Based on Change Request (CR) 8875, effective January 1, 2015, the definition of a spouse for purposes of the working aged provisions means "a person who is entitled to Medicare as a spouse based upon the Social Security Administration’s rules or a person whose marriage is valid in the jurisdiction in which it was performed including one of the 50 states, the District of Columbia, or a U.S. territory or a foreign country, so long as that marriage would also be recognized by a U.S. jurisdiction." The expanded rules for the definition of “spouse,” including proper reporting pursuant to MMSEA Section 111, must be implemented with a start date for the coverage in question no later than January 1, 2015. To the extent an employer, insurer, third party administrator, GHP or other plan sponsor insurer has chosen to or chooses to utilize the new definitions referenced above or a broader definition of “spouse” for MSP purposes prior to January 1, 2015, it may do so. However, MACs may not apply the revised definition for Medicare purposes for coverage dates prior to January 1, 2015. Nor may MACs accept a definition of spouse broader than that quoted above. In the event, Medicare does pay for coverage prior to January 1, 2015, it will pursue recovery, as applicable.

MSP Billing Procedures - Detailed reveiw

a. General Requirements

When Medicare is the secondary payer, the claim must first be submitted to the primary insurer. The primary insurer must process the claim in accordance with the coverage provisions of its contract. If, after processing the claim, the primary insurer does not pay in full for the services, the claim may be submitted to Medicare electronically or via a paper claim for consideration of secondary benefits.
Note: It is the provider's responsibility to obtain primary insurance information from the beneficiary and bill Medicare appropriately. Claim filing extensions will not be granted because of incorrect insurance information.

The Medicare paper claim must include a copy of the primary insurer's explanation of benefits (EOB). The EOB should include the following information:

name and address of the primary insurer
name of subscriber and policy number
name of the provider of services
itemized charges for all procedure codes reported
a detailed explanation of any denials or payment codes
date of service

NOTE: A detailed explanation of any primary insurer denial or payment codes MUST be submitted with the claim and EOB. If the denial/payment code descriptions or any of the above information is not included with the claim, it may result in a delay in processing or denial of the claim.

If the beneficiary is covered by more than one insurer primary to Medicare (e.g., a working aged beneficiary who was in an automobile accident), the explanation of benefits statement from BOTH plans must be submitted with the claim.

Are Your Medicare Secondary Payer (MSP) Claims Rejecting?

Medicare Secondary Payer (MSP) refers to instances in which Medicare does not have primary responsibility for paying the medical expenses of a Medicare beneficiary. This is because the Medicare beneficiary may be entitled to other coverage, which should pay the primary health benefits.

Medicare secondary claims can be submitted electronically. However, Palmetto GBA has rejected some claims because there was a mismatch between the MSP Type submitted on the claim and the specific patient's Medicare record. Below are some examples of situations that you may wish to verify when you receive these Medicare rejections:

Are we required to submit our Medicare Secondary Payer (MSP) claims electronically?

Answer:
Yes. Unless you have been approved to submit hard copy claims to Medicare, submit all Medicare claims electronically, including MSP claims. An exception to this requirement is when a patient has two or more payers who are primary to Medicare. In situations where Medicare is the tertiary payer, these claims may be submitted hard copy.

The ASC v5010 format allows for electronic submission of primary payer information for MSP claims. Palmetto GBA also offers the PC-ACE Pro32 EDI billing software, which supports electronic submission of MSP claims.



Do you routinely submit claims containing the same MSP Type (example: MSP type 47) when Medicare does not show this to be a valid MSP type for the specific patient?

If you submit your claims to a clearinghouse, does your clearinghouse understand that claims must be submitted with the correct MSP Type?

Is your patient covered by Medicare as an Aged Worker (Type 12), but claims for the patient are being submitted as Disability (Type 43)?

Was your patient's injury related to Workers' Compensation (Type 15), but you submitted the MSP claim as an Aged Worker (Type 12)?

If you submit claims through an electronic clearinghouse, make sure you provide the clearinghouse with the correct MSP Type for each claim. If you are still receiving rejections from Medicare, verify that your clearinghouse is submitting the MSP Type you provided for each patient.

If you answered 'Yes' to any of the above questions, your Medicare MSP claims are most likely rejecting because there is a mismatch of the type submitted and the Medicare MSP files. This situation can drastically impact the cash flow for your office. Below are the loops and segments where this information should be located in the electronic claims format:

b. Electronic Claim Submission

To submit Medicare Secondary Payer (MSP) claims electronically, please refer to the American National Standards Institute (ANSI) ASC X12N Implementation Guide. To learn how to report MSP claims in your software, contact your software vendor.

The following records are required in order to get a MSP claim to process. Other records may also be necessary depending on the information obtained by the primary insurer.  When sending a MSP claim electronically, the EOB from the primary insurance does not need to be sent separately.

Data Explanation	ANSI ASC X12	837 Version 5010
Payer Paid Amount	The amount paid by the primary insurer	2320 AMT02 and 2430 SVD02
Remaining Patient Liability Amount	The amount the patient is liable for	2320 AMT02 and 2430SVD02 (one or the other but not both)
Adjudication date	The date of payment or denial by the primary payer	2330B DTP03 or 2430 DTP03
Adjustment Group Code	The code identifying who is responsible	2320 CAS01 or 2430 CAS01
Claim Adjustment Reason Code	The code identifying the detailed reason the adjustment was made	2320 CAS02 or 2430 CAS02  (one or the other but not both)
Monetary Amount	The amount of the adjustment	2320 CAS03 or 2430 CAS03 (one or the other but not both)
Primary Insurer	The name of the primary insurer	2330B NM1
Value Codes (Part A)	The code indentifying the MSP Insurance type	2300 HI
Condition Codes (Part A)	The code indentifying accident and retirement information	2300 HI
Occurrence Codes (Part A)	The code indentifying other Insurance information	2300 HI

b.1 Paper Claim Submission

When submitting a paper claim to Medicare as the secondary payer:
The CMS-1500 (02-12) claim form must indicate the name and policy number of the beneficiary's primary insurance in items 11-11c. Please refer to Chapter 9 for additional instructions on completing the CMS 1500 (02-12) claim form.

Providers must submit a claim to Medicare if a beneficiary provides a copy of the primary explanation of benefits (EOB). The claim must be submitted to Medicare for secondary payment consideration with a copy of the EOB. If the beneficiary is not cooperative in supplying the EOB, the beneficiary may be billed for the amount Medicare would pay as the secondary payer.

Providers must bill both the primary insurer and Medicare the same charge for rendered services. If the primary insurer is billed $50.00 for an office visit and they pay $35.00, do not bill Medicare the remaining $15.00. Medicare must also be billed for the $50.00 charge, and a copy of the primary insurer's EOB must be attached to the completed claim form.

c. Determining Secondary Liability

Medicare may pay secondary when the primary insurer does not pay the entire charge. Medicare will not pay, however, if the provider accepts or is obligated to accept the primary insurer’s payment in full or if the primary insurer pays the charge in full.

If the primary insurer does not pay in full, Medicare’s secondary liability is calculated follows:

1. Compare the billed amount to the primary allowed amount and limiting charge amount (non-assigned claim only). Subtract the primary paid amount from the lowest number.

2. Determine what Medicare would pay if they were the primary payer.

3. Take the higher of the primary allowed amount or the Medicare allowed amount. Subtract the primary paid amount.

4. Compare the results of the first three steps. Medicare’s liability is the lowest of the three numbers.
If the primary insurer does not pay for certain services because the services are not covered by the plan, the benefits have been exhausted, or the primary insurer’s payment is applied to the beneficiary’s deductible, Medicare may pay primary benefits for covered services. The explanation of benefits from the primary insurer must state a valid reason for not paying certain services in order for Medicare to consider primary payment.

When the primary insurer’s reason for denial states that a service is not payable because it is considered an integral part of another service or part of a primary procedure (or similar message), Medicare has no liability. An exception may be made when the primary insurer holds the beneficiary responsible to pay for the service

c.1 Patient Liability when Medicare is Secondary

Agreements with all insurance companies must be reviewed prior to balance billing a patient for a Medicare secondary claim. Consider the following before attempting to bill the patient or try using our interactive form.

Non-Participating Providers

Non-participating with both the primary insurer and Medicare – You may bill the lower of the limiting charge amount (115% times the Medicare non-participating amount) or the billed amount.
Non-participating with Medicare only - You may bill an amount up to the primary insurer’s allowed amount.

Participating Providers

Participating with both the primary insurer and Medicare OR participating with Medicare only - You may bill the patient an amount up to the Medicare Fee Schedule allowance.

c.2 Determining Who Pays When Coverage Changes During Hospital Stay

When a patient’s coverage changes from one insurer to another during the course of a hospitalization, which insurance is financially responsible for the care? Part A and Part B handle this situation differently.

Example: Patient has Medicare on 10/31, the same day they were hospitalized for a two week stay. On 11/1, the patient’s insurance coverage changes to a HMO.

Part A: Whichever insurance the patient had on the day of admission is the insurer responsible for the entire hospital stay. Therefore, Medicare would be responsible for the entire Part A bill.
Part B: Responsibility shifts from one insurer to the other on the exact date of termination and enrollment. So in this example, Medicare would be responsible only for services rendered on 10/31, and the HMO would be responsible for physician services rendered 11/1 and after.

c.3 Medicare Deductible on MSP Claims

Medicare applies money to a beneficiary’s deductible regardless of primary insurer benefits. This means that even if the same charge is paid in full or in part by the primary insurer, Medicare’s fee schedule amount will be applied to the beneficiary’s deductible.

Medicare has certain rules that explain how much a patient is responsible for when Medicare deductible is applied on a Medicare Secondary Payer (MSP) claim. These rules differ from the standard guidelines in regard to the patient’s liability when Medicare deductible is applied.
Assigned claims – You may bill up to the Medicare fee schedule, minus payments made by the primary and secondary insurance.

Non-assigned claims

Non-participating with both the primary insurer and Medicare – You may bill the lower of the limiting charge amount (115% times the Medicare non-participating amount) or the billed amount.
Non-participating with Medicare only – You may bill an amount up to the primary insurer’s allowed amount.

d. Speed Payment of MSP Claims

Do your Medicare secondary payer (MSP) claims take longer than others to process?
Do you struggle completing electronic claims when Medicare is the secondary payer?
The number one error we see on electronic MSP claims involves the trailer type for the primary insurance. The trailer type is incorrectly keyed.

Take a moment to familiarize yourself with the trailer types listed below:
12 – Working Aged
13 – End Stage Renal Disease/ESRD
14 – Automobile/No Fault
15 – Worker’s Compensation
16 – Federal
41 – Black Lung
42 – Veteran’s Administration
43 – Disability
47 – Liability
Spending a moment double checking the trailer type is time well spent!

How is a Medicare secondary payment determined?

Q. How is a Medicare secondary payment determined?
 
A. The Medicare secondary payment is determined by a series of calculations and comparisons. The primary insurer’s claim processing details on their explanation of benefits (EOB) is needed to determine the secondary payment amount.
Three calculations are made per procedure. The lowest of the three is the secondary payment.
Calculation 1
If the Obligated to Accept payment in Full (OTAF) amount is present,
• Determine the lowest amount between the OTAF amounts vs. the billed amount of the service.
• Use the lowest amount listed above minus the primary paid amount.
If the OTAF amount is not present,
• Use the billed amount of the service minus the primary paid amount
Calculation 2
Determine Medicare's primary payment would be:
• Note the Medicare allowed amount for the procedure.
• If applicable, subtract Medicare's deductible indicated in the DEDCT column.
• Multiply the difference by the appropriate percentage: 62.5 percent, 80 percent, or 100 percent, depending on the procedure code.
Calculation 3
Compare the Medicare allowed amount to the primary insurer's allowed amount and select the higher allowed amount.
Using the higher allowed amount from listed above, subtract from the primary insurer's paid amount.
• The Medicare secondary payment is equal to the lowest payment amount resulting from calculation #1, #2 or #3 above.
Note: You may also utilize the Medicare secondary payer (MSP) calculator

what are cases Medicare would be secondary

Medicare As Secondary Payer

Until 1980, Medicare was the primary payer for all Medicare covered services except for services covered by workers' compensation or black lung benefits or paid for by the Department of Veterans Affairs or other government entities. Since 1980, a series of changes in the Medicare law has shifted costs from the Medicare program to private sources of payment. Presently, Medicare is the secondary payer for individuals:

Who are aged 65 or older and currently working with coverage under an employer-sponsored or employee organization (such as a union) group health plan.

Who are aged 65 or older and are covered by a working spouse's employer group health plan or employee organization (such as union) group health plan.

Who are under age 65, disabled, and are covered by a large group health plan due to their own or other family member's current employment status.

With kidney failure. Medicare is the secondary payer during the Coordination of Benefits (COB) period if they have coverage

under their own, a spouse's, or other family member's employer-sponsored or employee organization group health plan.

Who receive services covered under Workers' Compensation, Federal Black Lung, automobile, no-fault, or liability insurance plans.

Who receive services covered under the Veteran Administration.

a. Working Aged

Medicare is secondary payer for individuals aged 65 or older who are currently working and have coverage through an Employer Group Health Plan (EGHP). Medicare is also secondary if the beneficiary has coverage through an employed spouse of any age. In order to meet the Working Aged provision, the employer must have at least 20 employees working for the company. At times, 2 or more smaller employers combine to provide coverage. As long as at least 1 employer has 20 or more employees, the requirement is met.

Medicare is primary in the following situations:

Individuals who are enrolled in Medicare Part B only.
Individuals enrolled in Medicare Part A on the basis of a monthly premium.
EGHP plans where there is less than 20 employees and the employer does not combine with another employer with more than 20 employees.
Individuals covered by a health plan that is not provided by Group Health Plan (GHP). An example would be a plan that is purchased by an individual privately rather than through a group plan.

A plan provided through retirement resulting from past employment. For Medicare to be secondary, the coverage must be the result of current employment status. The Medicare beneficiary may be retired and have retiree coverage. If the spouse is still employed and provides coverage, this coverage will be primary to Medicare.

a.1 Vow of Poverty Provision
The Omnibus Budget Reconciliation Act of 1993 makes an exemption from MSP provisions for members of a religious order who have taken a vow of poverty retroactive to 1981. Employers must certify that an individual has taken a vow of poverty. Medicare is then considered the primary payer for such individuals, (i.e., nuns, priests, etc.)

b. Disability
Effective August 10, 1993, Medicare is secondary payer for individuals under age 65 who are entitled to Medicare due to disability and are covered by a Large Group Health Plan (LGHP). Medicare secondary payer status for disabled Medicare beneficiaries is based on the "current employment status" of the beneficiaries, their spouses or any other family member. An individual has "current employment status" if the individual is actively working as an employee, the employer, or is associated with the employer in a business relationship.

Prior to August 10, 1993, Medicare was secondary for active individuals under age 65, entitled to Medicare due to disability and covered by a LGHP through a relationship to an employer (i.e. employed or retired beneficiary, spouse or other family member). This provision was based on the "active individual" concept rather than the employment status.

Those disabled beneficiaries who have LGHP coverage as a result of their own or a family member's "current employment status" will continue to have Medicare as the secondary payer. Those disabled beneficiaries who do not have primary coverage with a LGHP because they do not have nor does a family member have "current employment status" will have Medicare as the primary payer.

A LGHP is defined as a plan sponsored or contributed to by an employer or employee organization (union). A LGHP provides medical benefits to employees who are currently working for an employer with 100 or more employees. If more than one employer combines to provide health coverage to their employees and at least one of the employers has 100 or more employees, the requirement is met.

Medicare is primary in the following situations:
Individuals who work for employers of fewer than 100 employees;
Individuals who are covered by a LGHP as the result of past employment (i.e. former retired employee or family member) and whose coverage is not based on "current employment status;"
Individuals who are covered by a health plan that is not provided by a LGHP. An example would be a plan that is purchased privately by an individual rather than through a group plan;
Individuals who have COBRA continuation coverage since it is not based on "current employment status."


c. End Stage Renal Disease (ESRD)
Medicare is secondary payer to group health plans (GHP) for individuals eligible for or entitled to Medicare based on ESRD during a Coordination of Benefits (COB) period. This provision differs from other MSP laws as it applies regardless of the number of employees employed by the employer or their employment status, active or retired. The ESRD provision applies to former as well as current employees. The provision applies where an individual is eligible for Medicare based on ESRD but who has not filed an application for entitlement to Medicare. This provision also applies when an individual is entitled based on ESRD only.

c.1 Coordination of Benefits Period
The Coordination of Benefits period defines the time frame that Group Health Plan benefits pay first, or primary, and Medicare pays second. The COB period begins with the earlier of the first month of entitlement or eligibility for Medicare Part A based on ESRD. Eligibility refers to the first month the individual would have become entitled to Medicare Part A on the basis of ESRD if the individual had filed an application for such benefits.

The length of the coordination of benefits periods has changed several times through the enactment of Medicare laws. If entitlement began before November 5, 1990, Medicare was the second payer for 12 months. If the COB began between November 5, 1990 and March 1, 1996, Medicare was the second payer for 18 months based on the OBRA 1990 law. Effective March 1, 1996, coordination of benefit period is in effect for 30 months. Section 4631(b) of the Balanced Budget Act of 1997, permanently extends the COB for 30 months.

c.2 Dual Entitlement
Medicare entitlement based on ESRD and aged or disability is considered dual entitlement. For example: An individual may be entitled to ESRD and then become entitled based on aged or disability. Or, an individual may be entitled to Medicare based on aged or disability and then develop ESRD.

Anytime an individual is entitled to Medicare for 2 different reasons, they are considered dually entitled. Prior to August 10, 1993, Medicare became primary or first payer on the first day of the month an individual became dually entitled.

The enactment of OBRA 1993 on August 10,1993, changed how dual entitlement affects the coordination of benefits period. Under this law, group health plans must continue to pay primary benefits even if the individual becomes dually entitled during the COB period. If the individual’s entitlement to Medicare was on the basis of aged or disability, and then they became entitled based on ESRD, GHPs were required to pay primary for the COB period. If the GHP was a supplemental plan at the time the individual became entitled based on ESRD, the GHP had to convert to primary payment for the COB period. If the individual did not have GHP coverage, Medicare remained primary in this situation.

c.3 Court Injunction
On May 5, 1995, a lawsuit was filed in the United States District Court, challenging the implementation of one aspect of the OBRA'93 provisions involving beneficiaries who have supplemental group health plan coverage. The court issued a preliminary injunction order on June 6, 1995 that prevents Medicare from applying the rule to services furnished between August 10, 1993 and April 24, 1995 to claims involving GHP retirement coverage pending the court's decision.

c.4 ESRD Entitlement Notes
If an individual has more than one period of Part A eligibility or entitlement based on ESRD, a coordination period is determined for each period of eligibility when the individual has GHP coverage.
Entitlement/Eligibility to Medicare based on ESRD ends 12 months after the month the individual no longer requires maintenance dialysis or 36 months after the month of a successful kidney transplant.
c.5 Effect of COBRA Continuation Coverage on ESRD MSP Provision
COBRA (Consolidated Omnibus Budget Reconciliation Act) requires that certain GHPs offer continuation of plan coverage for 18 to 36 months after the occurrence of certain qualifying events. An example of such an event would be loss of employment or reduction of employment hours. These events could result in loss of GHP coverage unless the individual is given the opportunity to elect continued plan coverage at their own expense. Typically Medicare is primary to COBRA plans with limited exceptions.

COBRA plans may terminate coverage upon entitlement to Medicare with one exception. The exception is that a COBRA plan may not terminate continuation coverage of an individual and his/her qualified dependents if the individual retires on or before the date the employer eliminates regular plan coverage by filing for Chapter 11, Bankruptcy. In this instance, if COBRA coverage overlaps the ESRD MSP coordination period, Medicare is secondary. Medicare will also be secondary if the COBRA plan voluntarily chooses to remain in effect even though they are not obligated to do so under COBRA provisions.

Important points when Medicare acts as secondary payer

Medicare Secondary Payer Program


Medicare law requires that providers and suppliers determine whether Medicare is the primary or secondary payer prior to submitting a claim by asking beneficiaries or their representatives about other health insurance or coverage. In addition, primary payers must be identified on claims submitted to Medicare. Providers and suppliers should not rely on Common Working File (CWF) information alone since Medicare Secondary Payer (MSP) circumstances can change quickly. The following secondary payer information can be found via the MSP Auxiliary File in the CWF:

MSP effective date;
MSP termination date;
 Patient relationship;
Subscriber name;
Subscriber policy number;
 Insurer type;
Insurer information (name, group number, address, city, state, and ZIP code);
MSP type; Remarks code; Employer information (name, address, city, state, and ZIP code); and Employee information (identification number).

Medicare may make payment if the primary payer denies the claim and the provider or supplier includes documentation that the claim has been denied in the following situations:

The Group Health Plan (GHP) denies payment for services because the beneficiary is not covered by the health plan, benefits under the plan are exhausted for particular services, the services are not covered under the plan, a deductible applies, or the beneficiary is not entitled to benefits;

The no-fault or liability insurer denies payment or does not pay the bill because benefits have been exhausted;

The Workers’ Compensation (WC) Plan denies payment (e.g., when it is not required to pay for certain medical conditions); or

The Federal Black Lung Program does not pay the bill.


In liability, no-fault, or WC situations, Medicare may make a conditional payment for covered Medicare services in order to prevent beneficiary financial hardship when: The claim is not expected to be paid promptly; The properly submitted claim was denied in whole or in part; or Due to the physical or mental incapacity of the beneficiary, a proper claim was not filed with the primary insurer.


When payments are made under these situations, they are made on the condition that the insurer and/or the beneficiary will reimburse Medicare to the extent that payment is subsequently made by the insurer.

How to submit Medicare secondart claims

Medicare Secondary Payer Changes: Paper Claims

Effective for claims processed on and after September 1, 2009, the following changes will apply to Medicare Secondary Payer (MSP) paper claims.

• The charge submitted on the CMS-1500 claim form must match the charge submitted on the Explanation of Benefits (EOB) from the primary insurer for each service. If the charges do not correspond, the services will be ‘returned as unprocessable’ (remark code MA130) and must be resubmitted as new claims. Note: Services returned as unprocessable do not have appeal rights and cannot be corrected via the telephone reopening line.
• If the submitted charges are not fully reimbursed by the primary insurer, the EOB must include a narrative description indicating the reason the charges were not fully reimbursed
  • When a reason/remark code is provided by the primary insurer, the description of the reason/remark code must be indicated on the EOB
  • The EOB must include the reason there was no payment or only partial payment made. This information is essential in determining the correct payment amounts. This information cannot be handwritten on the EOB. Column headings indicating co-insurance, co-pay, etc. will be considered valid descriptions.

How to identify MSP information and COB contractor

Medicare Secondary Payer (MSP) Claims Investigation

Effective January 8, 2001, the COB Contractor assumed responsibility for virtually all initial MSP development activities formerly performed by Medicare intermediaries and carriers. This means the COB Contractor is charged with ensuring the accuracy and timely update of data populated on Medicare's eligibility database regarding other health insurance that is primary to Medicare. The COB Contractor also handles MSP-related inquiries, including those seeking general MSP information, but not those related to specific claims or recoveries.

The COB Contractor is primarily an information gathering entity. A variety of methods and programs are used to identify situations in which Medicare beneficiaries have other health insurance that is primary to Medicare:

Secondary Claim Development: When a claim is submitted with an explanation of benefits (EOB) attached from an insurer other than Medicare, a questionnaire is sent to the beneficiary to collect information on the existence of other insurance that may be primary to Medicare.

Self-Report Development: A self-report covers the full spectrum of MSP situations. Any source that contacts the COB Contractor initiates this type of development process in order to address these inquiries and to assure that the information provided is accurate.

Trauma Development: When a diagnosis appears on a claim that information is received through correspondence or on a claim that indicates a traumatic accident, injury, or illness, which might form the basis of MSP, a questionnaire is sent to collect information on the existence of other insurance that may be primary to Medicare. This questionnaire may be sent to the beneficiary, provider, attorney, or insurer.

CFR 411.25: This process confirms MSP information received from a third party payer.
The goal of these MSP information-gathering activities is to identify MSP situations rapidly, thus ensuring correct primary and secondary payments by the responsible party. Providers, physicians, and other suppliers benefit from this activity because the total payments received for services provided to Medicare beneficiaries are greater when Medicare is a secondary payer to a GHP than when Medicare is the primary payer.