MSP Frequently Asked Questions

Last reviewed: 08.02.12

Updated: 02.29.12

I send in my EOB, however it still gets denied. Why?

Some of the reasons for the denial include, but not limited to the following:

The primary insurer EOB is illegible.

The primary insurer has denied all or part of the claim and the explanations of the denials are not included. This occurs often when an EOB is submitted with out the denial code remarks page. Before Medicare can consider payment, an explanation of the denial is necessary to determine if the services can be allowed by Medicare.

The date of service and/or name on the primary insurer EOB does not match the date of service and/or name on the claim submitted to Medicare. Medicare does not accept any handwritten information on the EOB to process as secondary.

Primary insurance has been cancelled or terminated. The cancellation or termination date must be included.

The explanation of benefits from the primary insure has information missing or "cut off", often the header information is missing therefore Medicare can not determine which column is primary allowed, and which one is paid.

The explanation of benefits was not a primary EOB. The explanation of benefits sent was a secondary EOB such as Champus, Medicare HMO, or Medicaid.

Can I file my MSP claims electronically?

Yes. If you are required to submit Medicare claims electronically, there is no exception for Medicare secondary claims unless there are multiple primary payers.

How do I file my MSP claims electronically?

MSP claims are filed the same as any other electronic claim. You would need to fill out all applicable loops and segments. Please see our net course entitled Medicare Secondary Payer billing MSP Claims Electronically outlining loops and segments along with instructions on how to file an MSP claim electronically.

How do I know which adjustment code to use?

Adjustment codes vary based on the reason the adjustment on the remit. For example if your remit from the primary insurance has an adjustment amount of 100.00 and the reason was there was no precertification then you would use adjustment code 197. Please see below for a complete listing of all adjustment codes. http://www.wpc-edi.com/reference/codelists/healthcare/claim-adjustment-reason-codes

What is OTAF?

When a provider signs a contract with a primary insurer to accept their payment amount as "payment in full" for covered services, the provider is "obligated to Accept Financial" no more than the allowable from any other source.

I file my claims electronically but they still get denied for the MSP type.

MSP claims will be denied if the MSP type entered on the claim is not correct. Example the claim is submitted with type 12 for working aged and the beneficiary is really disabled. The claim should have been submitted with MSP type 43. Please see our net course entitled Medicare Secondary Payer billing MSP claims electronically for instructions on billing with MSP types.

Do I have to take the primary insurer's allowed amount in full when I am not contracted with the Primary Insurer?

No, if you are not obligated to accept or voluntarily accept, then you are not obligated to take the primary insurer's allowed amount.

Does Medicare cover co-pays on secondary claims?

Medicare does consider coverage on co-pays following our normal claim processing guidelines.

I send a voluntary refund check however; I still get an overpayment letter why?

The most common issue that creates overpayment when a check is provided is when a valid EOB is not included with the Check. Please make sure you have a valid legible EOB submitted with each Refund request, along with the HICN, DOS and reason for refund.

I send in my check for MSP, however, sometimes it doesn't get processed with the EOB information. Why?

Often providers send large refunds that include MSP reasons with non MSP reasons. If a check is sent in with both and no EOB is attached to indicate MSP it will be processed as Non MSP. In order to reduce this and expedite the refund process it is suggested that you send all MSP related claims on one check and all non MSP related claims on a separate check. In addition, when sending multiple beneficiaries on the check; include EOBS for each beneficiary and how much is being refunded for each.

I seem to get overpayments on my MSP claims. Why?

One of the reasons for the overpayment includes, but not limited to the following:

An EMC claim is billed and the claim qualifies for OTAF however; the OTAF amount is not indicated on the claim. When submitted an OTAF claim electronically you must include the OTAF amount in loop 2300 CN102 CN1*09 for claim level and loop 2400 CN 102 with CN1*09 for line level. If the CN segments are not completed the claim will not process as OTAF and will create an overpayment.

Can I use the patient responsibility instead of calculating primary payment?

No, calculating is part of filing MSP claims. Although using this method may result in some correct calculations, it is not always the case. The only way to ensure the correct primary allowed, primary paid and OTAF is through calculation.

How do I calculate primary payment?

Secondary payments are calculated as follows:

The amount Medicare would pay as primary payer is calculated in the usual way.

Medicare's allowed amount is compared to the allowed amount of the primary insurer. The higher allowed amount is identified. (On a nonassigned claim, the primary insurer's allowed amount is reduced to the Medicare limiting charge in the computation.)
The amount paid by the primary insurer is subtracted from the allowed amount determined in step 2.
Medicare pays the lower of Medicare's primary payment amount (step 1) or the difference between the higher allowed amount and the primary insurer's payment amount (step 3).

The following examples show the calculation of MSP payments for both assigned and nonassigned claims.

	Example 1 Assigned	Example 2 Assigned	Example 3 Nonassigned	Example 4 Nonassigned
Amount of claim	$ 2,000.00	$ 135.00	* $ 1,420.25	* $ 117.99
Primary insurer allowable charge	$ 1,800.00	$ 135.00	* $ 1,420.25	* $ 117.99
Primary insurer payment	$ 1,440.00	$ 108.00	$ 1,136.20	$ 94.39
Medicare allowable charge	$ 1,300.00	$ 108.00	$ 1,235.00	$ 102.60
Medicare deductible withheld	$ 00.00	$ 100.00	$ 00.00	$ 100.00
MSP payment	$ 360.00	$ 6.40	$ 284.05	$ 2.08

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