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Medicare Secondary Payer (MSP) ManualChapter 5 - Contractor Prepayment ProcessingRequirementsTable of Contents(Rev. 10401, 10-23-20)Transmittals for Chapter 510 - Coordination with the Benefits Coordination & Recovery Center (BCRC)10.1 - Contractor MSP Auxiliary File Update Responsibility10.2 - COBC Electronic Correspondence Referral System (ECRS)Attachment 1 - ECRS Web User Guide, Software Version 1.0Attachment 2 - ECRS Web Quick Reference Card Version 1.010.2.1 - ECRS Functional Description10.2.2 - Technical Overview - Impact on Contractor Data Centers10.3 - Providing Written Documents to the COBC10.4 - Contractor Record Retention10.5 - Notification to Contractors of MSP Auxiliary File Updates10.6 - Referring Calls to the COBC10.7 - Changes in Contractors’ Initial MSP Development Activities10.8 - Additional Activities Arranged by Non-GHP MSP Type10.8.1 - No-Fault Development10.8.2 - Workers' Compensation (WC) Development10.8.3 - Liability Development10.9 - COBC Numbers20 - Sources That May Identify Other Insurance Coverage20.1 - Identification of Liability and No-Fault Situations20.2 - Identify Claims with Possible WC Coverage20.3 - Medicare Claims Where Veterans' Affairs (VA) Liability May Be Involved20.3.1 - VA Payment Safeguards20.4 - Identification of On-Going Responsibility for Medicals (ORM) in Liability,No-Fault, and Workers' Compensation Situations

20.4.1 - Background Regarding ORM for Contractors20.4.2 - Policy Regarding ORM20.4.3 - Operationalizing ORM for Liability, No-Fault, and Workers'Compensation Situations20.5 – Medicare Residual Payments Due When On-going Responsibility forMedicals (ORM) Benefits Terminate, or Deplete, During a Beneficiary’s ProviderFacility Stay or Upon a Physician, or Supplier, Visit30 - Develop Claims for Medicare Secondary Benefits30.1 - Further Development Is Not Necessary30.2 - Further Development Is Required30.3 - GHP May Be Primary to Medicare30.3.1 - Limits on Development30.3.2 - Develop ESRD Claims Where Basis for Medicare EntitlementChanges30.4 - Workers' Compensation Responses30.4.1 - Patient Receives Concurrent Services Which Are Not WorkRelated30.5 - No-Fault Responses30.5.1 - No-Fault Insurer Denies That It Is the Primary Payer30.5.2 - No-Fault Insurance Does Not Pay All Charges Because of aDeductible or Coinsurance Provision in Policy30.5.3 - State Law or Contract Provides That No-Fault Insurance IsSecondary to Other Insurance30.6 - Liability Claim Is Filed and There is Also Coverage Under Automobile orNon-Automobile Medical or No-Fault Insurance30.7 - Beneficiary Refuses to Provide Requested Information30.8 - Audit Trail of Primary Coverage40 - FI and Carrier Claim Processing Rules40.1 - Claim Indicates Medicare is the Primary Payer40.1.1 - Facts Indicate Reasonable Likelihood of Workers' CompensationCoverage (Other Than Federal Black Lung Benefits)40.1.1.1 - The Beneficiary Is on the Black Lung Entitlement Rolls40.1.2 - Services by Outside Sources Not Covered40.1.2.1 - Exception40.1.3 - Notice to Beneficiary

40.2 - Update CWF MSP Auxiliary File40.2.1 - Action if Payment Has Been Made Under No-Fault Insurance40.3 – Processing Part B Claims Involving GHPs40.3.1 - GHP Denies Payment for Primary Benefits40.3.2 - GHP Does Not Pay Because of Deductible or CoinsuranceProvision40.3.3 - GHP Gives Medicare Beneficiary Choice of Using PreferredProvider40.4 - GHP Pays Primary40.4.1 - GHP Pays Charges in Full40.4.2 - GHP Pays Portion of Charges40.4.3 - GHP Pays Primary Benefits When Not Required40.5 - Primary Payer Is Bankrupt or Insolvent40.5.1 - Billing Beneficiaries During the Liquidation Process40.5.2 - When to Make a Medicare Secondary Payment40.5.3 - Amount of Secondary Payment40.5.4 - Time Limits for Filing Secondary Claims After LiquidationProcess40.6 - Conditional Primary Medicare Benefits40.6.1 - Conditional Medicare Payment40.6.2 - When Primary Benefits and Conditional Primary MedicareBenefits Are Not Payable40.7 - Carrier Processing Procedures for Medicare Secondary Claims40.7.1 - Crediting the Part B Deductible40.7.2 - Medicare Payment Calculation Methodology40.7.3 - Medicare Secondary Payment Calculation Methodology forServices Reimbursed on Reasonable Charge or Other Basis UnderPart B40.7.3.1 - Medicare Secondary Payment Part B ClaimsDetermination for Services Received on ASC X12 837Professional Electronic Claims40.7.3.2 - Medicare Secondary Payment Part A ClaimsDetermination for Services Received on 837 InstitutionalElectronic or Hardcopy Claims Format

40.7.3.3 - Version 5010 Balancing for Incoming MSP ClaimsWhere MSP Amounts Appear at the Claim Level and Not at theService Detail Line40.7.4 - Effect of Medicare Limiting Charge on Medicare SecondaryPayments40.7.4.1 - GHP Does Not Pay for Certain Services40.7.4.2 - Third Party Payment Includes Both Medicare Coveredand Noncovered Services40.7.5 - Effect of Failure to File Proper Claim40.7.6 - Medicare Secondary Payment for Managed Care Organizations'(MCO) Copayments40.7.7 - Charging Expenses Against Annual Limit on Incurred Expensesfor Services of Independently Practicing Physical Therapists40.7.8 - MSP Situations Under CAP40.8 - Intermediary Processing Procedures for Medicare Secondary Claims40.8.1 - Medicare Secondary Payment Calculation Methodology WhenProper Claim Has Been Filed40.8.2 - Rule to Determine the Amount of Secondary Benefits40.8.3 - Application of the MSP Formula40.8.4 - PIP Reduction40.8.5 - MSP Part B Claims (Outpatient and Other Part B Services, HomeHealth Part B and Ancillary Services When Part A Benefits areExhausted)40.8.6 - MSP Outpatient Claims Involving Lab Charges Paid by FeeSchedule40.8.6.1 - Prorating Primary Payments40.8.6.2 - Calculation of Deductible and Coinsurance40.8.7 - Calculating Medicare Secondary Payments When Proper ClaimHas Not Been Filed With Third Party Payer40.8.8 - Determining Patient Utilization Days, Deductible, andCoinsurance Amounts40.8.9 - Benefits Exhausted Situations When Medicare Is Secondary Payerfor Reasonable Cost Providers40.8.10 - Deductible and/or Coinsurance Rates Spanning Two CalendarYears40.8.11 - Submit Data to CWF When Full Payment Made by PrimaryPayer

40.8.12 - Submit Data to CWF When Partial Payment Made by PrimaryPayer50 - MSP Pay Modules to Calculate Medicare Secondary Payment Amount50.1 - Medicare Secondary Payer (MSP) Payment Modules (MSPPAY) forCarriers50.1.1 - Payment Calculation Processes for MSP Claims50.1.2 - MSPPAY "Driver" Module50.1.3 - Return Codes50.1.4 - Executing and Testing MSPPAY Software50.1.5 - Carrier MSPPAY Processing Requirements50.1.6 - Error Resolution50.1.7 - Payment Calculation for Physician/Supplier Claims (MSPPAYBModule)50.1.8 - Payment Calculation for Physician/Supplier Claims(MSPPAYBL)50.2 - Medicare Secondary Payer (MSP) Payment Modules (MSPPAY) for Part AContractors50.2.1 - Payment Calculation Processes for MSP Claims50.2.2 - MSPPAY "Driver" Module50.2.3 - Return Codes50.2.4 - Installation50.2.5 – Part A Processing Requirements50.2.6 - Error Resolution50.2.7 - Payment Calculation for Inpatient Bills (MSPPAYAI Module)50.2.8 - Payment Calculation for Outpatient Claims (MSPPAYOL)50.2.8.1 – MSPPAY Update to Apportion Prospective PaymentSystem (PPS) Outlier Amounts to All Service Lines withPotential Outlier Involvement50.2.9 - Payment Calculation for Outpatient Bills (MSPPAYAO Module)50.3 – Multiple Primary Payer Amounts For a Single Service50.4 - Processing Medicare Secondary Payer (MSP) Fully Paid Claims forOutpatient and Home Health Claims60 - MSP Reports60.1 – Monthly Part A Report (Form CMS-1563) and Monthly Part B Report(Form CMS-1564) on Medicare Secondary Payer Savings

60.1.1 - Overview of Report60.1.2 - Savings Calculations60.1.3 - Recording Savings60.1.3.1 - Source of Savings60.1.3.2 - Type of Savings60.1.3.2.1 – Pre-payment Savings – Cost Avoid (Unpaid MSPClaims)60.1.3.2.2 – Pre-payment Savings – Full Recoveries60.1.3.2.3 – Pre-payment Savings – Partial Recoveries60.1.3.2.4 – Post-payment Savings – Full Recoveries60.1.3.2.5 – Post-payment Savings – Partial Recoveries60.1.3.2.6 – Total Post-payment Savings60.1.3.3 - Electronic Submission60.1.3.3.1 - Data Entry of the Forms CMS-1563 and CMS 156460.1.3.3.2 – System Calculations for Forms CMS-1563 and CMS156460.1.3.4 – Exhibit 1 – Medicare Secondary Payer (MSP) SavingsReport60.1.3.5 – Exhibit 2 –CWF Source Codes and CorrespondingCROWD Special Project Numbers60.2 - Liability Settlement Tracking Report70 - Hospital Review Protocol for Medicare Secondary Payer70.1 - Reviewing Hospital Files70.1.1 - Frequency of Reviews and Hospital Selection Criteria70.1.2 - Methodology for Review of Admission and Bill ProcessingProcedures70.2 - Selection of Bill Sample70.3 - Methodology for Review of Hospital Billing Data70.3.1 - Review of Form CMS-145070.3.1.1 - General Review Requirements70.3.1.2 - Working Aged Bills70.3.1.3 - Accident Bills

70.3.1.4 - Workers' Compensation Bills70.3.1.5 - ESRD Bills70.3.1.6 - Bills for Federal Government Programs70.3.1.7 - Disability Bills70.3.2 - Use of Systems Files for Review70.3.3 - Review of Hospitals With Online Admissions Query or Use of theX12 270/271 Transaction70.4 - Assessment of Hospital Review70.5 - Exhibits70.5.1 - Exhibit 1: Assessment of Medicare Secondary Payer HospitalReview70.5.2 - Exhibit 2: Survey of Bills Reviewed70.5.3 - Exhibit 3: Entrance Interview Checklist70.5.4 - Exhibit 4: Entrance Interview Checklist: Billing Procedures