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Medicare Secondary Payer (MSP) Frequently Asked Questions

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  1. We have a working aged patient on disability with commercial insurance being primary, and paying all but a copayment of 10%, with Medicare secondary. Is this copayment billable to Medicare, and if so what process do we use to bill? How do we know how much will be paid by Medicare?
  2. Why can't we submit Black Lung claims using FISS direct data entry (DDE) when payment is never expected from the other insurance, since Black Lung does not have a hospice benefit?

    • If the services are unrelated to Black Lung, and the claim does not include any black lung-related diagnoses codes, the claim can be submitted DDE, with Medicare as the primary payer. If the claim includes black lung-related diagnoses, it must be submitted to the Department of Labor (DOL) for payment/denial first. If DOL denies the claim, Medicare requires a copy of the denial, and thus, the claim must be submitted to Medicare hardcopy. Currently, the instructions provided in Medicare Secondary Payer (MSP) Manual, Pub. 100-05, Ch. 6External PDF, §40.10, apply to ICD-9 DX category codes 500-508 and not ICD-10 MSP codes. ICD-10 instructions will be issued when available.

      Reviewed: 03.15.17

  3. I have several claims for ESRD patients, who have a group health plan or a positive working elderly record, but their lifetime benefits have maxed out or the health plan does not cover the services provided. How do I get these claims paid?

    • Home health or hospice claims for beneficiaries who have End Stage Renal Disease (ESRD) and are still within the 30 month ESRD coordination period should be submitted using Process JPDF . Process HPDF is used when a disability or working aged insurance exists and the insurer has denied payment. Claims where another insurer is primary to Medicare may be submitted electronically using the 5010 format or may be submitted using the Fiscal Intermediary Standard System (FISS) Direct Data Entry (DDE), even if services were denied by the primary insurer. To ensure that the claim processes correctly, it must contain crucial billing elements as detailed out in the Medicare Secondary Payer (MSP) Billing & Adjustments quick resource toolPDF. If any of the key billing elements is missing or incorrect, the claim may be returned to the provider (RTP) or rejected.

      As indicated in Process J, it is critical that the claim include occurrence code 33 with the date the 30-month coordination period started. In addition, occurrence code 24 and date of the denial must also be included for services that were denied by the primary insurance. A value code '13' and zeros for the amount (if all services were denied) must also be reported. Please refer to Process J for the additional data elements required on the ESRD MSP claim. In addition, refer to the Medicare Secondary Payer (MSP) Online Tool for assistance.

      Reviewed: 03.15.17

  4. If an MSP claim is paid by the primary insurance, but doesn't pay the full Medicare reimbursement amount, and the primary insurance benefits have not been exhausted/maxed, could the balance bill be submitted to Medicare?
  5. Is a patient's signature required on the MSP questionnaire conducted by provider at time of admission?

    • While there is no CMS requirement that necessitates the MSP questionnaire to be signed by the patient, it may help to validate who completed the form, or who provided the information that was entered on the form.

      Reviewed: 03.15.17

  6. Is there a resource phone number for questions related to the electronic MSP billing software, such as PC ACE Pro32?

    • If you have questions about the PC-Ace billing software, you can contact CGS's EDI Department at 877.299.4500, (option 2) for assistance. However, if you have question specific to billing an MSP claim, you can contact the Provider Contact Center by 877.299.4500, (option 1). For questions regarding submitting MSP claims using your billing software, contact your software vendor for assistance. In addition, please refer to the Medicare Secondary Payer (MSP) Web page for resources to assist Medicare providers with billing MSP claims.

      Reviewed: 03.15.17

  7. How do providers find out which MSP claims or adjustments need to be submitted electronically or submitted DDE?
  8. I do not understand the difference between submitting Medicare claims electronically and DDE.
  9. We don't know how much to charge Medicare for our services on our MSP claims. Any advice?

    • CMS' policy is for providers to bill Medicare the same that they charge other payers. There are four manual references listed below that support this position.

      Medicare Claims Processing Manual (CMS Pub. 100-04) Ch. 25, §75.5External PDF states "The CMS policy is for providers to bill Medicare on the same basis that they bill other payers. This policy provides consistency of bill data with the cost report so that bill data may be used to substantiate the cost report. Medicare and non-Medicare charges for the same department must be reported consistently on the cost report."

      Provider Reimbursement Manual, Part 1, Ch. 22External website

      Section 2202 defines "charges" as "the regular rates established by the provider for services rendered to both beneficiaries and to other paying patients. Charges should be related consistently to the cost of the services and uniformly applied to all patients whether inpatient or outpatient. All patients' charges used in the development of apportionment ratios should be recorded at the gross value; i.e., charges before the application of allowances and discounts deductions."

      Section 2203 states "To assure that Medicare's share of the provider's costs equitably reflects the costs of services received by Medicare beneficiaries, the intermediary, in determining reasonable cost reimbursement, evaluates the charging practice of the provider to ascertain whether it results in an equitable basis for apportioning costs. So that its charges may be allowable for use in apportioning costs under the program, each facility should have an established charge structure which is applied uniformly to each patient as services are furnished to the patient and which is reasonably and consistently related to the cost of providing the services. While the Medicare program cannot dictate to a provider what its charges or charge structure may be, the program may determine whether or not the charges are allowable for use in apportioning costs under the program."

      Section 2204 states "The Medicare charge for a specific service must be the same as the charge made to non-Medicare patients (including Medicaid, CHAMPUS, private, etc.), must be recorded in the respective income accounts of the facility, and must be related to the cost of the service."

      Reviewed: 03.15.17

  10. We were told that we should still submit our home health or hospice claims to Medicare even if the primary insurer paid the services in full. Why should we do this?

    • Even if no Medicare Secondary payment will be made for home health or hospice services provided to the beneficiary, it is important to ensure that home health episodes of care and hospice benefit periods are established on the Common Working File (CWF). This helps ensure that Medicare benefits are paid for and tracked appropriately. In addition, this will inform other Medicare providers of the services a beneficiary is receiving, which also helps protect the Medicare trust fund and duplication of services.

      Reviewed: 03.15.17

  11. I'm confused when submitting MSP claims. Most of the time, we're only told what MSP information to enter on the claim. How do we know what claim information we need to enter in addition to the MSP information?
  12. We're unsure as to when value code 44 needs to be submitted on our MSP claims. Please clarify.

    • Value code 44 is defined as the amount a provider agreed to accept from a primary insurer as payment in full. Value code 44 should be submitted on a claim to Medicare when the amount agreed to is:

      • less than the charges; and
      • higher than the payment received from the primary insurer.

      For example, if a Medicare provider agreed to accept $1,000.00 as payment in full; however, the provider's total charges were $1,295.00, and the payment from the primary insurer was $500.00, the provider would report value code 44, along with the $1,000.00 they agreed to accept as payment in full. They would also need to report the appropriate value code that reflects the type of insurance that is primary to Medicare (working aged, disability, liability, etc.) along with the $500 payment received from the primary insurance.

      Value code 44 should not be used when:

      • the provider did not agree to accept a lesser amount than their charges from the primary payer as payment in full; or
      • charges are equal to the amount the provider agreed to accept; or
      • payment from primary insurance is more than the amount they agreed to accept.

      For additional information, see the CGS webpage, "Billing MSP Claims With Value Code 44"

      Reviewed: 03.15.17

  13. Our home health agency submitted a Request for Anticipated Payment (RAP) for a beneficiary where Medicare is not the primary payer. We didn't receive a payment for the RAP. Why not?

    • When Medicare is not the beneficiary's primary insurer, HHAs do not receive reimbursement for their RAPs. In this situation, the RAP is submitted to Medicare, and establishes your HHA as the primary home care agency for the episode of care. Note: RAPs are always submitted with Medicare as the primary payer regardless of any other insurers which may pay primary to Medicare.

      By reviewing the claim summary inquiry screen (Option 12 in FISS), HHAs can identify when Medicare is not the beneficiary's primary insurer occurs because the letter "Z" will appear in the "NPC" (non-payment code) field on the RAP. In addition, the Remittance Advice Remark Code (RARC) N360 will display on your remittance advice. Instructions for using Option 12 are accessible in the Inquiry Menu (Chapter 3)PDF of the FISS Guide.

      Reviewed: 03.15.17

  14. If we see that a beneficiary has an old MSP record that is open (no termination date) on their eligibility file, how can we tell if it's still valid?
  15. Do we have to wait until a beneficiary's MSP record has been updated to bill for services that are unrelated to the MSP insurer?

    • No. If your services are unrelated to a no-fault, liability, workers' compensation, or Black Lung record, and your claim does not include any related diagnosis, these claims can be billed to Medicare as primary.

      Reviewed: 03.15.17

  16. Why don't our MSP claims or adjustments process in 30 days like our other Medicare claims?

    • There is a CMS mandate that requires Medicare contractors to report MSP cost savings. According to the MSP Internet-Only Manual (Pub. 100-05), chapter 5, section 60.1.3.2.1 – To prevent duplicate counting, CGS suspends all MSP claims returned unpaid. This process sets up a control on the claim when it is returned for development. It maintains this control for 75 days, unless further information is received before that time which allows processing the claim. If no further information on the claim is received, the claim may be denied after 75 days.

      In the past, if the claim was holding in an MSP pre-payment location (e.g., R B7516) the provider was able to request that the claim finalize prior to the 75 day holding period by adding remarks stating "the services are not related to an open MSP record." This process is no longer available.

      There are options/actions providers can take. CGS can only request to have the pre-pay location closed if:

      • The MSP record has been updated in CWF
      • The provider is adjusting to make Medicare secondary, or
      • If the claim has been in the pre-pay location for 75 days

      As a reminder, it is the provider's responsibility to double check Medicare beneficiaries' MSP records thoroughly, take special care in noting diagnosis codes reported on claims that may impact payment determinations, and detect other factors that determine whether or not the claim is submitted in a proper and accurate manner.

      NOTE: Please keep in mind that even something as simple as a fall in the home (i.e., possible homeowners' insurance plan's responsibility) could affect the outcome of the claim adjudication.

      For additional information, refer to the following resources:

      Updated: 03.15.17

  17. How do we submit our claim to Medicare when the primary insurer denied payment for our services?

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