April 16, 2012 | | Comments 0
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CMS provides additional guidance on proper billing when the Medicare Secondary Payer Rules apply

In a recent Special Edition MLN Matters Article (SE1217), CMS reminded providers of their responsibilities under the Medicare Secondary Payer (MSP) Rules. Under the MSP Rules, Medicare is secondary to certain other payers in the following circumstances:

  • Workers’ compensation (WC) plans, for employment-related injuries or diseases
  • No fault (NF) insurance, if available, for non-employment related injuries, regardless of whether the insurance plan stipulates it is secondary to Medicare
  • Third party liability (L) insurance (e.g., med pay) or self-insurance plans for covered illnesses or injuries
  • Employer group health plans (GHPs) of employers with at least 20 employees, for employees who have Medicare by reason of age and are covered under that GHP based on their, or a spouse’s, current employment with that employer
  • GHPs of employers with at least 100 employees, for employees who have Medicare by reason of disability and are covered under that GHP based on their, or another family member’s, current employment with that employer
  • GHPs during the 30-month coordination of benefits period, for employees who have end stage renal disease (ESRD), and are either entitled to Medicare initially based on ESRD; or by reason of age or disability
  • Government research programs, for services that are part of the research program
  • The Department of Veterans’ Affairs, for services they authorize at a non-VA facility


Under the MSP Rules, the primary responsibility of providers is to determine whether other coverage is available for each visit or admission and, if so, whether Medicare is primary or secondary to that other coverage.  The model hospital admissions questionnaire, published by the CMS, may be used as a guide to collect this information from beneficiaries. This tool is available online in the Medicare Secondary Payer Manual (100-05), Chapter 3, Section 20.2.1. This questionnaire may also be used by physicians and suppliers to gather relevant MSP information.

Once these coverage determinations are made, providers should first bill the primary payer for related services. If a payer other than Medicare is primary, providers may bill Medicare as the secondary payer (if appropriate) after receiving the primary payer remittance advice.  If a patient is seen for multiple services, each service should be billed first to the primary payer, and then to any secondary payers, as appropriate.

When billing services subject to the MSP Rules, providers (hospitals, in particular) should be sure to report applicable MSP-related information using situation specific codes (primarily condition, occurrence and value codes) on the UB-04 and 837I claims formats.

CMS provided the following specific tips on billing for accident-related claims when a beneficiary has open MSP WC, NF, or L coverage and/or open GHP MSP coverage.

  1. Providers should bill the WC, NF, or L, as primary insurer, first for related services. If the insurer denies the claim, then bill Medicare for payment, including all necessary MSP payment information, as found on the primary payer’s remittance advice (e.g., claim adjustment reason code specifying reason for denial), on the claim sent to Medicare. If the L, NF, or WC insurer did not make payment for the accident related services, Medicare will need this information to process the claim accordingly. If Providers follow these procedures, they do not need to wait 120 days to submit a claim to Medicare for payment.
  2. If the beneficiary has both  GHP MSP coverage and WC, NF, or L coverage, providers are required to submit a claim to the GHP insurer and the WC, NF, or L insurer before submitting the claim to Medicare. Once they receive the GHP remittance advice, they should include the GHP information along with the remittance advice information from the WC, NF, or L insurer with the claim to Medicare. If the claim is sent to Medicare without the GHP information, and there is an open GHP MSP record on file, Medicare will deny the claim.
  3. In situations where there is no WC, NF, or L accident or injury, but the beneficiary has employer GHP coverage that is primary to Medicare, providers must submit the claim to the GHP insurer first before submitting the claim to Medicare for secondary payment.

CMS offered additional guidance about what providers should do if they believe a claim was improperly denied.  They also encouraged providers to contact the Coordination of Benefits Contractor at 1-800-999-1118 to update a beneficiary’s MSP record.

If you have any additional questions that remain unanswered after reviewing the MLN Article, check the Medicare Secondary Payer Manual (100-05), which is available from the CMS website.

Entry Information

Filed Under: Compliance

Judith Kares About the Author: Judith Kares is an instructor for HCPro's Medicare Boot Camp - Hospital Version. Judith has also been involved in the following:

  • Development of comprehensive compliance programs
  • Initial and follow-up risk assessments
  • Development and implementation of compliance training programs
  • Compliance audits and internal investigations
  • Research/advice regarding specific risk areas
  • Development of corrective action programs
Prior to beginning her current legal/consulting practice, Judith spent a number of years in private law practice, representing hospitals and other health care clients, and then as in-house legal counsel. In that capacity, she served first as Assistant General Counsel and Director of the Legal Department for Blue Cross and Blue Shield of Arizona (BCBSAZ) and then as Deputy General Counsel, Regulatory and Contract Compliance, with Blue Cross and Blue Shield of the National Capital Area (BCBSNCA) in Washington, D.C.

In both in-house positions, Judith had primary responsibility for contracting and regulatory compliance. The latter included oversight of federal and state health care programs. BCBSAZ was a fiscal intermediary, a Medicare risk and AHCCCS (Arizona's managed care alternative to traditional Medicaid) contractor, as well as a participating contractor under the national Blue Cross/Blue Shield Federal Employee Program.

Judith is also an adjunct faculty member at the University of Phoenix, where she teaches courses in business and health care law and ethics. She is an advocate for the use of alternatives to traditional dispute resolution, having participated in the volunteer mediation program in the Justice Courts of Maricopa County, Arizona. Judith is a frequent speaker at healthcare-related seminars. In addition to her membership in the State Bar of Arizona and the Tennessee Bar Association, Judith is a member of the American Health Lawyers Association, the Health Care Compliance Association, and the Arizona Association of Health Care Lawyers.

Judith earned her Juris Doctor degree (with high distinction) from The University of Iowa, College of Law and her B.A. (with highest distinction) from Purdue University.

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