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.

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!

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