General Provider Information

Home Provider Part A Medicare Areas MSP General

  1. MSP CATEGORIES Explanation of MSP laws and regulations.

    1. Employee Group Health Plan (EGHP)
      Medicare benefits are secondary to benefits payable under EGHP for employees age 65 or over and their spouses.

      Medicare is the secondary payer when:
      The employer has 20 or more employees and pays a portion or all of the group health insurance for its employees.

      Medicare is primary when:
      The employer has less than 20 employees, or the plan denies a claim because the benefits are exhausted or services are not covered under the employer plan, or the patient and/or spouse are retired.

      When you have been notified of a Medicare beneficiary's change in work status, please notify the Coordination of Benefits (COB) contractor, either by letter or phone.

    2. Large Group Health Plan (LGHP)

      OBRA '93 (Omnibus Budget Reconciliation Act)
      Effective August 1993, Medicare determines that MSP status for a disabled Medicare beneficiary by the existence of a large group health plan (LGHP) coverage based on the individual's current employment status. The employee must be currently working during the dates of service.

      Medicare is secondary payer when:
      The plan covers employees of at least one employer with 100 or more employees. If the plan is a multi-employer plan such as a union plan which covers employees of some small employers and also employees of at least one employer that covers 100 or more employees under the plan, Medicare is secondary.

      Medicare is primary when:
      The group plan covers less than 100 employees or the plan denies the claim because benefits are exhausted or services are not covered under the plan or the patient, spouse, and/or family member are retired.

    3. End Stage Renal Disease (ESRD)
      Due to the Balanced Budget Act of 1997, effective 8-1-97 the coordination period for ESRD beneficiaries is now 30 months for coordination periods that began March 1, 1996, or later.

      Medicare is secondary when:
      During the coordination period Medicare is the secondary payer to benefits payable under an employer group plan.

      1. If the beneficiary receives a kidney transplant, the coordination period begins with the date of the first treatment.
      2. If the beneficiary does home/self training dialysis, the 3 month waiting period does not apply and the coordination period will start at the beginning of the month in which the first dialysis treatment was given.
      3. If the beneficiary is receiving hemodialysis, the coordination period starts at the beginning of the fourth month of renal dialysis treatment.

    4. COBRA

      The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) states an employer must offer continuation of group insurance coverage for a specified time to an employee upon job termination.

      If a beneficiary has COBRA coverage and is entitled to Medicare, then Medicare would be primary, except in ESRD cases. If a beneficiary is entitled due to ESRD, then the COBRA coverage is primary for the coordination period.

    5. DataMatch denials
      Denial codes 35, 36, 37, 38, 39, and 40 are DataMatch denials which are obtained from IRS/SSA tax information. In order to adjust these claims, you will need to submit a letter from the employer on their letterhead giving the date of retirement or insurance termination.

    6. Vow of poverty provision
      OBRA '93 makes the exemption from MSP provisions for individuals who have taken a vow of poverty retroactive to 1981. Employers must certify that an individual has taken a vow of poverty with respect to work activity that is the basis for qualifying for the group health plan.

    7. TRICARE
      Medicare is always primary over TRICARE. This is a federal program that is supplemental to Medicare.

    8. Automobile/Liability
      Medicare is secondary when:
      The beneficiary has been involved in an automobile accident or in a liability situation in which another party is responsible.

      Medicare is primary when:
      The beneficiary fell at home or any other situations in which no other party is responsible.

      The provider or beneficiary has filed a claim under an automobile or no-fault insurance policy or plan (including a self-insured plan) and the provider determines the insurer will not pay promptly within 120 days of receipt due to case litigation or resolution of settlement. THE PROVIDER CANNOT BILL BOTH MEDICARE AND THE INSURER OR PLACE A LIEN WITH THE ATTORNEY.

      The denial from the primary insurer is based on any reason except that the primary insurer offers only secondary coverage of services covered by Medicare.

      The time limit for filing the claim with the primary insurer has expired.

      If the above conditions exist, bill for conditional Medicare payment by putting a value code 14 or 47 in Form Locator 39-41 and a 00 in Form Location 39-41. Put the insurance name and address in the remarks section.

      Under no circumstances should Medicare and another entity be billed at the same time. If the provider chooses to bill Medicare, it must withdraw claims against the liability insurer or the lien placed on the beneficiary's settlement.

      If Medicare paid the claim and you receive a check from another insurance company and/or attorney, you can either request the adjustment through the remote system, send the adjustment with the necessary changes on the UB04. Due to your contract with the Medicare Program you are only allowed to keep up to Medicare's approved amount plus deductible, coinsurance and noncovered charges. The remainder must be refunded to the beneficiary.

    9. Worker Compensation

      If a patient is involved in a work related accident, the Workers Compensation carrier should be billed prior to Medicare.

    10. Federal Agencies

      Federal Law states that payment may not be made for items and services furnished by a provider of service when it can be paid directly or indirectly by a Federal, State, or local government entity.

    11. Black Lung

      If you are aware that a Medicare beneficiary may be entitled to have the services reimbursed by the Department of Labor (DOL) under the Federal Black Lung Program, bill DOL for only Black Lung related claims and submit a no-payment bill (MSP Manual, Publication 100-05 Chapter 5 Section 30.4) to your intermediary.

      The address for sending bills to DOL is:
      Federal Black Lung Program
      P.O. Box 828
      Lanham-Seabrook MD 20703-0828

    12. Veterans Affairs
      If it is known that a patient is covered by VA, bill Veterans Affairs prior to submitting the bill to Medicare. If the patient is VA eligible and chooses to receive services in a Medicare certified provider, put a 26 in form locators 18-28 on your UB04.

  2. Billing Procedures

    1. Electronic billing

      All MSP claims can and should be submitted electronically through direct data entry by indicating "requesting conditional payment" in the remarks section.

    2. Preparation of MSP bills/Completing the UB04 Form

      When billing Medicare as the secondary payer, all claims should be submitted electronically through direct data entry by indicating "requesting conditional payments" in the remarks section. The claim should be completed as a Medicare primary claim with the exception of:

      1. Form Locator 39A - 41D

        Enter the MSP value code and amount paid by the primary insurance in these form locators.

        The value codes to be used are:

        12   Working Aged (EGHP)
        13 End Stage Renal Disease (ESRD)
        14 No-fault
        15 Worker's Compensation (WC)
        16 Other Federal Agencies
        41 Black Lung
        42 Veterans Administration (VA)
        43 Disabled (LGHP)
        44 Used when the hospital has a contract with the insurer to accept a specific amount as payment in full.
        47 Liability

        Value Code 44
        A value code 44 is used when a primary payer pays less than actual charges and less than the amount a provider is contractually obligated to accept as payment in full from an insurance company. A 44 code should only be used for claims where there is a contractual agreement with an insurance company. The value code 44 is used with the amount the provider was obligated to accept. Use the appropriate value code (12, 13, or 43) with the amount actually received from the insurance company.

      A condition code 77 is used when the insurance pays the entire contractual. Use the correct value code (12, 13 & 43) with the amount actually received from the insurance company.

      1. Form Locator 50A
        Enter the name of the primary payer.

      2. Form Locator 58
        Enter the insured person's name (last name first)

      3. Form Locator 59
        Enter the patient's relationship to insured. Use the codes below to identify the relationship to the patient.

        01   Spouse
        04 Grandparent
        05 Grandchild
        07 Niece/Nephew
        10 Foster Child
        15 Ward of the Court
        17 Step Child
        18 Patient is Insured
        19 Natural Child, Insured has financial responsibility
        20 Employee
        21 Unknown
        22 Handicapped Dependent
        23 Sponsored Dependent
        24 Minor Dependent of a Minor Dependent
        32,33 Parent
        39 Organ donor
        40 Cadaver donor
        41 Injured Plaintiff
        43 Natural Child, insured does not have financial responsibility
        53 Life Partner

      4. Form Locator 60
        Enter the insured's unique identification number

      5. Form Locator 61
        Enter the name of group or plan through which the insurance is provided to the insured.

      6. Form Locator 62
        Enter the insurance group number.

      7. Form Locator 64
        Document Control Number to identify claim to be adjusted.

      8. Form Locator 65
        Enter the employer name.

      9. Form Locators 31-34 - Occurrence Codes
        Use the following occurrence codes when applicable.

        01   Auto Accident
        02 Accident - No fault
        03 Accident - Liability
        04 Accident - Employment related
        05 Other Accident
        06 Crime Victim
        18 Beneficiary's Date of Retirement
        19 Spouse's Date of Retirement
        24 Date Insurance Denied
        33 First Day of Coordination period for ESRD

      10. Form Locators 18-28 - Condition Codes
        The following condition codes should be used when applicable:

        02   Condition is Employment related
        04 HMO Employee
        05 Lien has been filed
        06 ESRD patient is in first 30 months of entitlement and covered by a group health plan (GHP)
        07 Treatment for hospice patient
        08 Beneficiary would not provide information concerning insurance coverage
        09 Neither patient nor spouse is employed
        10 Patient and/or spouse is employed but no EGHP exists
        11 Disabled beneficiary but no LGHP
        28 Patient and/or spouse EGHP is secondary to Medicare
        77 Provider accepts or is obligated to accept payment by a primary payer as payment in full due to contractual agreement or law

      11. Form Locator 80 - Remarks
        Many times remarks can be written on the claim to provide the Medicare Intermediary with information to process the claim more effectively. Below are some examples of remarks for specific situations.

      12. Group (GHP, LGHP, and ESRD)
        Group payment applied to deductible
        Group insurance denied claim

      13. Worker's Compensation
        WC denied claim
        Settlement benefits denied

      14. Black Lung
        Black Lung denied claim
        Not entitled to Black Lung

      15. Veterans Administration
        VA denied claim
        No VA coverage

      16. Auto/Liability
        Auto benefits denied
        Fell at Home
        No Liability

      17. Form Locator 29 - Accident State

 

Page Last Updated: Wednesday, 31-Dec-2008 10:49:12 CST