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Print-Friendly VersionMedicare Secondary PayerCopyright 2020, the American Hospital Association, Chicago, Illinois. Reproduced with permission. No portion of theAmerican Hospital Association (AHA) copyrighted materials contained within this publication may be copied without theexpress written consent of the AHA. AHA copyrighted materials including the UB-04 codes and descriptions may not beremoved, copied, or utilized within any software, product, service, solution or derivative work without the written consent ofthe AHA. If an entity wishes to utilize any AHA materials, please contact the AHA at 312-893-6816.Making copies or utilizing the content of the UB-04 Manual, including the codes and/or descriptions, for internal purposes,resale and/or to be used in any product or publication; creating any modified or derivative work of the UB-04 Manual and/or codes and descriptions; and/or making any commercial use of UB-04 Manual or any portion thereof, including thecodes and/or descriptions, is only authorized with an express license from the American Hospital Association.To license the electronic data file of UB-04 Data Specifications, contact Tim Carlson at (312) 893-6816 or LaryssaMarshall at (312) 893-6814. You may also contact us at ub04@aha.org.The American Hospital Association (the “AHA”) has not reviewed, and is not responsible for, the completeness oraccuracy of any information contained in this material, nor was the AHA or any of its affiliates, involved in the preparationof this material, or the analysis of information provided in the material. The views and/or positions presented in thematerial don’t necessarily represent the views of the AHA. CMS and its products and services are not endorsed by theAHA or any of its affiliates.Page 1 of 16MLN006903 April 2021
Medicare Secondary PayerMLN BookletTable of ContentsWhat’s Changed? . 3Introduction. 4MSP . 4When Medicare Pays First . 4MSP Provision Exceptions . 9If Primary Payer Denies Claim. 9Conditional Payments . 10Collecting Patient Health Insurance Information . 12Provider and Supplier Responsibilities. 13Gathering Accurate Data . 14Submit Claims with Other Insurer Information . 14File Proper & Timely Claims . 15MSP Contact Information. 15Resources . 16Page 2 of 16MLN006903 April 2021
Medicare Secondary PayerMLN BookletWhat’s Changed? Clarified policy on accepting payment for services if another insurer is primary to MedicareYou’ll find substantive content updates in dark red font.Page 3 of 16MLN006903 April 2021
Medicare Secondary PayerMLN BookletIntroductionThe Medicare Secondary Payer (MSP) provisions protect the Medicare Trust Fund from makingpayments when another entity has the responsibility of paying first. Any entity providing items andservices to Medicare patients must determine if Medicare is the primary payer. This booklet gives anoverview of the MSP provisions and explains your responsibilities in detail.MSPMSP provisions prevent Medicare paying items and services when patients have other primary healthinsurance coverage. In these cases, the MSP Program contributes: National program savings: CMS MSP provisions enforcement saved the Medicare Programabout 8.5 billion in FY 2018. Increased provider, physician, and other supplier revenue: Billing a primary plan beforeMedicare may offer you better payment rates, and coordinated health coverage may expedite thepayment process and reduce administrative costs. Avoiding Medicare recovery efforts: Filing claims correctly the first time prevents future claimrecovery efforts.To get these benefits, it’s important to ask or access accurate, current information about your patient’shealth insurance coverage. Medicare regulations require providers submitting claims to determine ifwe are the primary or secondary payer for patient items or services given.When Medicare Pays FirstPrimary payers must pay a claim first. Medicare paysfirst for patients who don’t have other primary insuranceor coverage. In certain situations, Medicare pays firstwhen the patient has other insurance coverage.Table 1 lists common situations when a patient hasMedicare, other health plan coverage, and which entitypays first (primary payer) and which pays second(secondary payer).Page 4 of 16MLN006903 April 2021Stay Up to DateTo sign up for automatic updates, enteryour email address in the ReceiveEmail Updates box at the bottom of theCoordination of Benefits & Recovery(COB&R) Overview webpage.
Medicare Secondary PayerMLN BookletTable 1. Common MSP Coverage SituationsIndividualCondition65 or older and covered bya Group Health Plan (GHP*)through current employmentor spouse’s currentemploymentEntitled to Medicare65 or older and coveredby a GHP through currentemployment or spouse’scurrent employmentEntitled to Medicare65 or older, has anemployer retirement GHP,and isn’t workingPays SecondMedicareGHPGHPMedicareMedicareRetiree CoverageMedicareGHPGHPMedicareEmployer has less than20 employeesEmployer has 20 ormore employees oris part of a multiple ormulti-employer groupwith at least 1 employeremploying 20 or moreindividualsEntitled to MedicareUnder 65, disabled, andcovered by a GHP throughtheir current employmentor a family member’scurrent employmentEntitled to MedicareUnder 65, disabled, andcovered by a GHP throughtheir current employment ora family member’s currentemploymentEntitled to MedicarePage 5 of 16Pays FirstEmployer has less than100 employeesEmployer has 100 ormore employees oris part of a multiple ormulti-employer groupwith at least 1 employeremploying 100 or moreindividualsMLN006903 April 2021
Medicare Secondary PayerMLN BookletTable 1. Common MSP Coverage Situations (cont.)IndividualCoverage under FederalBlack Lung Program (FBLP)ConditionEnd-Stage Renal Disease(ESRD) and GHP coveragewas primary beforeindividual became eligibleand entitled to Medicarebased on ESRD diagnosisBefore 30 months ofMedicare eligibilityor entitlementESRD and GHP coverageAfter 30 months ofMedicare eligibilityor entitlementESRD and ConsolidatedOmnibus BudgetReconciliation Act of 1985(COBRA) coverage beforebecoming eligible or entitledto MedicareFirst 30 months ofMedicare eligibilityor entitlementESRD and COBRAcoverageAfter 30 months ofMedicare eligibilityor entitlementPage 6 of 16Pays areMedicareCOBRAEntitled to coverageunder the FBLPMedicare coversservices or items notrelated to black lungdiagnosisParts A and B coverageunder Medicare Advantage(MA) PlanPays FirstAlso has a GHP HealthReimbursement Account(HRA)MLN006903 April 2021Contact MA Plan forbilling guidance.None; employerpays individualfrom HRA forout-of-pocketexpenses
Medicare Secondary PayerMLN BookletTable 1. Common MSP Coverage Situations (cont.)IndividualWorkers’ Compensation(WC) coverage because ofjob-related illness or injuryIn an accident or otherincident, includingautomobile accidents,where there’s no-faultor liability insuranceConditionEntitled to MedicareEntitled to MedicarePays FirstPays SecondWC pays healthcare items or jobrelated illness orinjury services first.See ConditionalPayments section.MedicareNo-fault or liabilityinsurance paysaccident- or otherincident-relatedhealth care servicesfirst. See ConditionalPayments section.WC, Liability, orno-fault paysfirst whenthere’s OngoingResponsibility forMedicals (ORM)reported. Medicaredoesn’t makea payment.MedicareNOTE: For ORM,Medicare doesn’tmake a paymentuntil ORM fundsexhaust.AccidentIn an accident or otherincident where there’sno-fault or liabilityinsurance involvedPage 7 of 16Patient has no-fault orliability insurance butrefuses to givethe informationMLN006903 April 2021For Part A claimsonly, use conditioncode 08 to preventthe claim fromreturning to theprovider. The PartA claim shouldreject and assignthe patientresponsibility.None
Medicare Secondary PayerMLN BookletTable 1. Common MSP Coverage Situations (cont.)Individual65 or older or disabled andcovered by Medicare andCOBRADual eligible patientregardless ofeligibility reasonCovered by Medicare andhas a Medigap or Medicaresupplement planActive-duty statusmilitary memberInactive status militarymember treated bycivilian providersInactive status militarymember treated at a militaryhospital or by otherfederal providersConditionPays FirstPays SecondMedicareCOBRAMedicareMedicaidMedicareMedigap orMedicareSupplemental ntitled to MedicareEntitled to Medicareand MedicaidEntitled to MedicareEntitled to Medicareand TRICAREEntitled to Medicareand TRICAREEntitled to Medicareand TRICARE* A GHP is any arrangement of, or contribution from, 1 or more employers or employee organizations providing insuranceto current or former employees or their families.Page 8 of 16MLN006903 April 2021
Medicare Secondary PayerMLN BookletMSP Provision ExceptionsThere are no exceptions to the MSP provisions. SSA Section 1862(b)(2)(A)(i) and 42 USC 1395(y)(b)(2)(A)(i)prohibits accepting payment for services from a patient upon admission if another insurer is primary. Ifyou’re performing this practice, you must stop immediately.Participating Medicare providers, physicians, and other suppliers must not accept any copayment,coinsurance, or other payments from the patient when the primary payer is an employer ManagedCare Organization (MCO) insurance, or any other type of primary insurance, such as an employergroup health plan.You must follow the MSP rules and bill Medicare as the secondary payer after the primary payer hasmade payment. We’ll inform you on your remittance advice how much you can collect from the patientafter we make payment.NOTE: In situations where you’ve taken payment from a patient, they have the right to recouppayment and you must reimburse them if necessary.If Primary Payer Denies ClaimMedicare may make payment, assuming the service is Medicare-covered and payable, and theprovider files a proper claim, in these situations: No-fault or liability insurer doesn’t pay during paid promptly period or denies medical bill WC program doesn’t pay during paid promptly period or denies payment (for example, when WCexcludes a medical condition or certain services) Patient gets services not directly related to the condition for which they got WC benefits Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) or the ORM benefitsterminate or exhaust GHP denies payment for services because:1. Patient exhausted certain plan benefit services2. Patient isn’t entitled to GHP benefits3. Patient needs services the GHP doesn’t coverWhen submitting an MSP claim, include information identifying why the other payer denied the claim,made an exhausted benefits determination, or another reason that may apply.Medicare can’t make payment if payment was already made or Medicare can reasonably expectanother payer. MSP provisions apply even if an entity believes it’s the secondary payer to Medicaredue to state law or the contents of an insurance policy. SSA Section 1862(b) establishes paymentorder and takes priority over state laws and private contracts.Page 9 of 16MLN006903 April 2021
Medicare Secondary PayerMLN BookletConditional PaymentsOften, there’s a long delay between an injury and the primary payer decision in a contestedcompensation case. Medicare may make pending case conditional payments to avoid imposing afinancial hardship on you and the patient while awaiting a contested case decision.Medicare can make conditional payments for covered services even if it isn’t the primary payer.Medicare may make conditional payments for covered services in liability (includingself-insurance), no-fault, and WC situations, if these are true: Self-insurance, no-fault, or WC holds payment liability and responsibility Medicare doesn’t expect a prompt paymentMedicare can recover any conditional payments. The Benefits Coordination & Recovery Center(BCRC) recovers conditional payments from the patient or their attorney if the patient gets asettlement, judgment, award, or other payment.Medicare may pay conditional primary benefits if the provider, physician, supplier, or patient doesn’tfile a proper claim with the GHP (or Large Group Health Plan [LGHP]) due to the patient’s physical ormental incapacity.If there’s a primary GHP and the provider doesn’t bill the GHP first, Medicare will not payconditionally on the liability (including self-insurance), no-fault, or WC claim. Providers must bill theGHP before billing Medicare, and the primary payer payment information that appears on all primarypayer remittance advices must appear on all Medicare-submitted claims. We won’t pay conditionalprimary benefits in other situations where: GHP says it’s secondary to Medicare GHP limits its payment when the patient is entitled to Medicare GHP covers the services for younger employees and spouses, but not for employees and spouses65 and older GHP says it’s secondary to liability, no-fault, or WC insuranceAdditionally, we won’t make conditional payments associated with WCMSAs or when ORM exists.Paid PromptlyFor no-fault insurance and WC claims, “paid promptly” means payment within 120 days after theno-fault insurance or WC carrier got the claim for specific items and services. Without contradictinginformation, you must treat the service date for specific items and services as the claim date whendetermining the paid promptly period; for inpatient services, you must treat the discharge date as theservice date.Page 10 of 16MLN006903 April 2021
Medicare Secondary PayerMLN BookletFor liability insurance (including self-insurance), “paid promptly” means payment within 120 days after1 of these occur: Date someone files a general liability claim with an insurer or someone files a lien against apotential liability settlement Date service provided or, in the case of inpatient services, the discharge dateGet more information on conditional payments at: Medicare Secondary Payer Manual, Chapter 1, Section 10.7 Medicare Secondary Payer Manual, Chapter 2, Sections 40 and 60 Medicare Secondary Payer Manual, Chapter 3, Sections 30 and 40 Medicare Secondary Payer Manual, Chapter 5, Section 40 Medicare Secondary Payer Manual, Chapter 6, Sections 40.3 and 60A “Non-Group Health Plan (NGHP)” is liability insurer coverage (including self-insurance), no-faultinsurer, and WC carrier. Submit all NGHP claims to the NGHP insurer before submitting to Medicare.Ongoing Responsibility for MedicalsMedicare can’t make payment when payment “has been made or can reasonably be expected to bemade” under liability insurance (including self-insurance), no-fault insurance, or a WC law or plan ofthe United States, called a primary plan.When a primary plan reports “Ongoing Responsibility for Medicals (ORM)” to Medicare, it assumespayment responsibility, on an ongoing basis, for certain accident or injury related medical care. Wewon’t pay for the injury without documentation the ORM terminated or exhausted.Page 11 of 16MLN006903 April 2021
Medicare Secondary PayerMLN BookletCollecting Patient Health Insurance InformationCoordination of Benefits (COB) allows plans to determine their payment responsibilities. The BCRCcollects, manages, and uploads information to the Common Working File (CWF) about patients’ otherhealth insurance coverage. Providers, physicians, and other suppliers must collect accurateMSP patient information to ensure that claims are filed properly.BCRC relies on health insurance maintained by stakeholders, including federal and state programs;plans that offer health insurance, prescription coverage, or both; pharmacy networks; and a varietyof assistance programs. Some of the reporting methods Medicare uses to get MSP and COBinformation include: Voluntary Data Sharing Agreement (VDSA): The VDSA allows CMS and an employer toelectronically exchange GHP eligibility and Medicare information. The VDSA includes MedicarePart D information, allowing VDSA partners to submit primary or secondary records with Part Dprescription drug coverage. MSP Mandatory Reporting Process: GHPs and NGHPs have mandatory MSP reportingrequirements insurance arrangements, including liability insurance, self-insurance, no-faultinsurance, and WC to report patient MSP information. Find more information on theMandatory Insurer Reporting for GHP or Mandatory Insurer Reporting for NGHP webpages. MSP Claims Investigation: The BCRC investigates when it learns another insurance planmay have primary responsibility for paying a patient’s Medicare claims. The BCRC determinesif information is missing from MSP records or MSP cases. Single-source investigations offer acentralized MSP-related inquiries location. Investigations involve collecting other health insuranceor coverage that may be primary to Medicare based on information submitted on a medical claimor other sources, such as correspondence, accident and injury cases, or phone calls. Electronic Correspondence Referral System (ECRS): ECRS, a web-based application, allowsMedicare contractor representatives and CMS Regional Office MSP staff to electronically sendMSP possible lead information or information that questions existing MSP records to the BCRC.Get more information on the BCRC in Medicare Secondary Payer Manual, Chapter 4.Page 12 of 16MLN006903 April 2021
Medicare Secondary PayerMLN BookletProvider and Supplier ResponsibilitiesPart A Institutional Providers (Hospitals)Use a MSP questionnaire during the admissionprocess. Gather accurate MSP data. Determine ifMedicare is the primary payer by asking patients ortheir representative(s) for MSP information.Bill primary payer before billing Medicare.Submit any MSP information on your claim usingproper payment information, value codes, condition,and occurrence codes, etc. If submitting an electronicclaim, include the necessary MSP claims processingfields, loops, and segments.Part B Providers (Physicians, Practitioners, and Suppliers)Gather accurate MSP data. Determine if Medicareis the primary payer by asking patients or theirrepresentative(s) for MSP information.Bill primary payer before billing Medicare.Submit an Explanation of Benefits (EOB) orremittance advice from the primary payer with allMSP information. If submitting an electronic claim,include the necessary fields, loops, and segments.Get more Medicare-covered services timely filing requirements information inMedicare Claims Processing Manual, Chapter
Medicare may also pay first when the beneficiary has other insurance coverage. Table 1 lists some common situations when a beneficiary has both Medicare and other health plan coverage and which entity pays first (prima
