MSP Inquiries and Solutions - JE Part B

The following are inquiries and solutions related to Medicare Secondary Payer (MSP) claim processing.

1. Under what circumstances might Medicare be considered a Secondary Payer?
   
   Medicare may be considered a Secondary Payer if a beneficiary is covered under any of the following insurance plans:
   • Group Health Insurance is provided by an employer to a policyholder who is actively working. Laws affecting this type of insurance include TEFRA, DEFRA, OBRA, COBRA and ESRD.
   • Automobile or Liability Insurance is applicable in cases where an accident has occurred, whether it is a car accident, a fall or medical malpractice.
   • Workmen's Compensation covers injuries on the job. The employer's Workmen's Compensation Carrier is responsible for the claim first.
   • United Mine Workers is a Medicare plan a beneficiary could elect, if they are qualified.
   • Health Maintenance Organizations (HMOs), which offer several different types of coverage, can be primary to Medicare. Senior HMO plans, called Medicare Advantage plans are not considered primary to Medicare as they are a different way for seniors to receive Medicare benefits.

   Other coverage plans can be considered a Secondary Payer to Medicare, including supplemental insurance, which is an insurance policy purchased to pay benefits after Medicare has paid the claim as the primary insurer. See our section on Medigap.

   Medicare will not cover the following: Black Lung and Veterans Administration claims. Black Lung is covered under the Federal Black Lung Program. Medicare cannot pay claims submitted with a Black Lung Diagnosis code unless a copy of the Explanation of Benefits from the Black Lung Program is submitted showing that no payment was made. Veterans Administration claims will not be covered under Medicare. However, if a claim isn't filed with the VA, then Medicare may reimburse based on medical necessity.

2. When billing Medicare as Secondary Payer (MSP), should I report the primary insurer's payment in Item 29 on the CMS-1500 Claim Form?
   
   No, the primary payment should not be entered in Item 29. Item 29, per the CMS-1500 Claim Form instructions, is only used to report patient payment made to the provider for the service on the claim. If information is reported in this Item, part or all of the payment will be sent directly to the patient. When submitting a paper claim, simply attach the Explanation of Benefits (EOB) form to the claim and the system will process appropriately. For electronic submitters, please refer to the EDI section on the Noridian website. We have detailed information so you can stay electronic and give us the information we need for processing.
   
   MSP claims may also be filed electronically.
3. I received a Remittance Advice (RA) from Medicare for secondary payment that shows the services were allowed but no payment was made. Why was there no payment?
   
   Medicare calculates MSP payment by determining how much the primary insurance allowed, how much the primary paid, and what is left as the patient's responsibility. Medicare will always pay the lower amount between the patient's responsibility, based on the primary payment and Medicare's allowed amount. If the primary paid the entire Medicare allowed amount and left nothing as the patient's responsibility, there is nothing left for Medicare to pay. Please refer to "Medicare B News," Issue 190 for the calculations used to determine payment or use the MSP Calculator.
4. Should the question in Item 11d, "Is there another health benefit plan?" on the CMS-1500 Claim Form be completed?
   
   This Item is not required by Medicare and should be left blank.
5. Do I have to fill out Item 11 on the CMS-1500 Claim Form?
   
   Yes, If left blank the claim will be denied. If Medicare is primary, indicate in the word "NONE" in Item 11. By doing this, providers are stating that they have done due diligence and have verified that there is no coverage that would be primary to Medicare.
   
   If there is other coverage primary to Medicare, Items 11, a, b and c must be completed.
6. For an MSP claim and Item 11 is filled out, must an Explanation of Benefits (EOB) be attached?
   • For paper claim submission, yes, an EOB must be attached.
   • For electronic claim submission, no, providers must complete appropriate fields with necessary information for processing. See these two EDI documents for details.
     • Billing Medicare Secondary Payer (MSP) Electronically Using PC-ACE Pro32
     • Billing Medicare Secondary Payer (MSP) Claims
7. When Medicare is secondary, should Items 29 & 30 be left blank?
   
   Item 29, per the CMS-1500 Claim Form instructions, is only used to report patient payment made to the provider for the service on the claim. If information is reported in this Item, part or all of the payment will be sent directly to the patient.
   
   Item 30 should always be left blank.
8. What form should I use when we need an MSP claim correction?
   
   The Medicare Secondary Payer Form should be submitted. Please fill in all the information including the Insurer Name (name of the insurance company) Insurer Address (other insurance company's address), etc. This information is required by the Coordination of Benefits Contractor so that they can set up a record on the National File.
9. When claims deny for MSP Type 19 because the claim was submitted with an incorrect diagnosis code that matches the beneficiary's MSP file, can the provider contact Phone Reopenings to correct the diagnosis code on the claim?
   
   No, the claim cannot be adjusted through inquiries made through various means such as Phone Reopenings, MSP Form inquiries, etc. because of limitations in the claims processing system. When the claim is submitted with the incorrect diagnosis code, the provider must resubmit the claim with the correct diagnosis code.
10. If all of the set-aside money has been spent or if the wrong diagnosis is on file for the WCMSA, how does the beneficiarys file get updated?
    
    The provider should advise the beneficiary to contact the Medicare Secondary Payer Recovery Contractor (MSPRC) to close or change their file. Be advised that Noridian cannot disclose the diagnosis included in the beneficiarys file.
11. If the beneficiarys claim denies for MSP Type 19; however, there is no match between the claim and MSP diagnoses on CWF, what steps does the provider take to have the claim paid?
    
    Contact the Provider Call Center (PCC); they will refer the claim to the MSP Department. Although unable to adjust your claim, the MSP Team will enter a comment in the claims processing system indicating that the diagnosis code submitted is reimbursable. Once the comment is made, a letter will be sent from the MSP Team advising the provider to resubmit the claim.
12. My MSP electronic claims are paying incorrectly. Why does this happen?
    
    When entering information from the primary insurance, the information could be entered incorrectly. Please refer to Claim Adjustment Reason Codes for a listing of valid Claim Adjustment Reason Codes (CARC) to be used on MSP claims for Medicare B.
    
    The second reason is due to the fact that the Obligated to Accept the Payment in Full (OTAF) amount is not entered. The OTAF amount should be the charged amount minus any discounts.
13. Medicare was billed as secondary. Now the primary insurance is stating that Medicare should be primary and they are requesting their payment back. How long do I have to correct this payment?
    
    According to the CMS Internet Only Manual (IOM) Publication 100-05, Chapter 3, Section 10.5, "In general, Medicare does not consider a situation where (a) Medicare processed a claim in accordance with the information on the claim form and consistent with the information in the Medicare's systems of records and; (b) a third party mistakenly paid primary when it alleges that Medicare should have been primary to constitute ‘good cause' to reopen." Noridian received direction from CMS to reopen claims previously processed within one year of the initial determination and make primary payment/adjustment if otherwise appropriate. Claims beyond one year should not be reopened.
14. The Medicare secondary payment amount appears to be incorrect. How do we verify if the payment is correct?
    
    As long as you have a copy of the primary insurance's explanation of benefits and the Medicare remit, you can calculate what Medicare's payment should be by entering the information into the MSP Calculator.
15. Medicare paid higher than the primary's allowed amount, when the primary did not pay anything. Is this a correct payment?
    
    Yes, if the GHP reduced benefits by the deductible and coinsurance amounts.