Medicare Supplemental Insurance and Medigap

 Supplemental insurance or coverage is a policy purchased by a beneficiary to help pay for expenses not paid by Medicare, such as deductibles, coinsurance, and excluded services. 

Supplemental insurers may arrange for Medicare to file supplemental claims automatically. In cases where supplemental insurers do not have this arrangement with Medicare, beneficiaries must file their own supplemental claims. Traditional supplemental insurance policies directly reimburse patients who are in turn responsible for reimbursing the healthcare provider. Exclusions include: 

* Date(s) of service outside the patient ’ s eligibility period 

*Claims paid at 100 percent of Medicare approved amount 

*Medicare claims containing totally denied services

Medigap 

Medigap is privately offered Medicare supplemental health insurance specifically designed to supplement Medicare benefits. 

A Medigap plan is a health insurance plan that helps bridge gaps in Medicare plan coverage. In all states, there are basic standardized Medigap plans. Each plan has a different set of benefits and provides payment for some expenses not paid by Medicare such as deductibles, coinsurance, or other limitations imposed by Medicare.

Instructions for Electronic Billing of MSP Claims

Instructions for Electronic Billing of MSP Claims:

Claim Level Primary Payer Paid Amount
For claim level information, physicians and suppliers must indicate the other payer paid amount for the claim in loop 2320 AMT01 = D (qualifier) and AMT02 the monetary amount. NOTE: All line level payments when added together must equal the total amount paid on the claim.

Claim Level Primary Payer Allowed Amount
For claim level information, physicians and suppliers must indicate the other payer allowed amount for the claim in loop 2320 AMT01 = B6 (qualifier) and AMT02 the allowed amount. NOTE: All line level allowed amounts must equal the total allowed amount on the claim when added together.

Claim Level Obligated to Accept as Payment in Full Amount (OTAF)
For claim level information, physicians and suppliers must indicate the OTAF amount in loop 2300 CN101 = 9 and CN102 = the OTAF amount. This amount must be greater than zero if there is an OTAF amount.
NOTE: All line level OTAF amounts must equal the total OTAF amount on the claim when added together.

Line Level Primary Payer Paid
For line level information, physicians and suppliers must indicate the other payer paid amount for that particular service in loop 2430 SVD02.

Line Level Primary Payer Approved
For line level information, physicians and suppliers must indicate the other payer approved amount for that particular service in loop 2400 AMT01 = AAE (qualifier) and AMT02 the monetary amount.

Line Level Obligated to Accept as Payment in Full Amount (OTAF)
For line level information, physicians and suppliers must indicate the OTAF amount for that service line in loop 2400 CN101 = 9 and CN102 is the OTAF amount. This amount must be greater than zero if there is an OTAF amount.

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

Electronic Billing Instructions for Medicare secondary insurance

MSP Electronic Billing Instructions (MSP Medicare Secondary Payer)

The Centers for Medicare and Medicaid Services (CMS) now requires all claims, including MSP claims, to be filed electronically, with few exceptions. Please reference CMS Change Request 3440 Globe to indicate www link.and the Administration Simplification Compliance Act (ASCA) of 2001. An exception to this rule is when there is more than one payer responsible for payment before Medicare considers the charges. These claims may still be submitted hardcopy. Complete information about submitting electronic MSP claims is included in the "4010A1 Professional Implementation Guide 837".


If another insurance company pays primary benefits, secondary Medicare benefits may be payable to supplement the amount paid by the primary insurer. Medicare secondary benefits may be payable if all of the following situations apply:

    * The primary insurer's payment is less than the provider's charges for Medicare covered services;
    * The primary insurer's payment is less than the maximum amount payable by Medicare; and,
    * The provider does not accept and is not obligated to accept the primary insurer's primary payment as payment in full.