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Medicare Secondary Payer (MSP)

Overview

Until 1980, when Congress mandated that Medicare pay only secondary benefits in certain situations, the program had generally assumed a position of primary payer responsibility for its beneficiaries. Since 1980 there have been other changes in the Medicare Law that have added new circumstances under which Medicare is a secondary payer. As part of Medicare's Coordination of Benefits, Medicare can be considered a secondary payer if a beneficiary has other insurance coverage. In all cases, federal law regarding secondary payers takes precedence over state laws and private contracts.

If a beneficiary is covered under any of the following insurance plans, Medicare would be considered a secondary payer:

  • Group Health InsuranceExternal Website (employer has 20 or more employees) - This 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 InsuranceExternal Website - This insurance is applicable in cases where an accident has occurred, whether it is a car accident, a fall or medical malpractice.
  • Worker's CompensationExternal Website - Worker's Compensation covers injuries on the job. The employer's Workmen's Compensation carrier is responsible for the claim first.
  • United Mine Workers - This is a Medicare plan qualified beneficiaries can elect.
  • Federal Black Lung Program - This program covers Black Lung claims. 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 AdministrationExternal Website - Services rendered at a Veterans Administration facility are not covered under Medicare. If services are rendered at a non-VA facility, Medicare may consider payment for the covered part of the services that the VA didn't pay.
  • End Stage Renal Disease (ESRD)External Website - For beneficiaries covered through an employer sponsored health plan through their own or a family member's current or former employment, Medicare is secondary for 30 months for those beneficiaries entitled to Medicare based solely on ESRD from March 1, 1996.

The following insurance plans are considered a secondary payer to Medicare.

  • Supplemental insurance (also known as Medigap) - This is an insurance policy purchased to pay benefits after Medicare has paid the claim as the primary insurer.
  • Group Health Insurance (employer has less than 20 employees) - This 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.

The following insurance plans are selected by the beneficiary in place of original fee-for-service Medicare.

  • Medicare Advantage (some of these are referred to as Health Maintenance Organizations or HMOs) - These plans provide care under contract to Medicare. There are several types of Medicare Advantage plans and are available in many parts of the country. Payment cannot be made under fee-for-service Medicare for beneficiaries enrolled in a Medicare Advantage plan.

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Facts to Know:

  • For patients that have both Medicare and Medicaid and no other insurance, Medicare is the primary payer.
  • Medicare records may not reflect the patient's current insurance status. If you find that there is a discrepancy between Medicare records and the patient's current insurance status, call the Coordination of Benefits (COB) Contractor at 1-800-999-1118. The COB Contractor may also need to speak to the patient; however, providers are permitted to call.
  • In some cases, if a patient or his/her spouse is working and is covered by an Employer Group Health Plan (EGHP)External Website, you must know the number of people employed by the company in order to use this tool most effectively. Either you or the patient may contact the employer to obtain this information.

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MSP Lookup Tool

Unsure if Medicare should pay as the primary or secondary insurer for your patient? By answering a few simple questions this tool will help you determine if Medicare is the primary or secondary insurer.

Is the patient receiving Black Lung benefits?

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