EyeNet Magazine

Savvy Coder: Coding & Reimbursement

From Coordination of Benefits to Medicare and Other Insurers: Who Pays What?
By Sue Vicchrilli, COT, OCS, Academy Coding Executive

When is Medicare not responsible for primary payment of a beneficiary’s medical claim? The answer has changed over the years, and CMS has detailed this issue in a fact sheet for physicians and administrators.1 Here is a brief overview of what your practice ought to know.

Medicare Secondary Payer (MSP) is the term used by Medicare when it is not responsible for paying a claim as the primary. When Medicare began in 1966, it was the primary payer for all beneficiaries, except those who received benefits from the Federal Black Lung Program or Workers’ Compensation and those who received all covered heath care services through the Veterans Health Administration. Beginning in 1980, the MSP program was expanded to include:

  • Automobile, liability and no-fault insurance that may provide benefits for an accident or injury;
  • Group Health Plans (GHPs) made available to working Medicare beneficiaries aged 65 or older, or Medicare beneficiaries of any age with a spouse who is working and covered by a GHP;
  • Large Group Health Plans (LGHPs) made available to disabled Medicare beneficiaries under the age of 65 through their current employment or through the current employment of a family member; and
  • GHPs made available to persons with end-stage renal disease/permanent kidney failure (including beneficiaries directly covered, or covered as a dependent).

In a recent message on E-Talk,2 the AAOE’s listserv, Nancy LaVergne, CPC, OCS, of Jackson Eye Associates of Jackson, Miss., noted that in each of the above cases, claims should be sent to the appropriate party listed above rather than to Medicare. When payment or denial is received from that party, Medicare should be billed for consideration of secondary payment. With the increase in insurance plans that render Medicare the secondary payer, it is the patient’s responsibility to provide the physicians’ offices with up-to-date information about their coverage.

Coordination of Benefits (COB) is a CMS effort to prevent and minimize erroneous Medicare payments. The COB Contractor initiates all MSP claim investigations. Such an investigation may occur if a provider submits a claim containing health insurance information that is new or that conflicts with what currently exists on Medicare’s beneficiary records. The investigation would determine whether Medicare or another health insurance is the primary payer for a beneficiary’s claims.


1 www.cms.hhs.gov/medicaresecondpayerandyou
2 Sign up for E-Talk at www.aao.org/aaoe.

4 Questions to Ask Your Patients

Make sure your office submits claims correctly the first time by asking patients the right questions each time they visit your office.

When a patient is 65 or older, ask:

  1. Are you or your spouse still working? Does the employer provide health insurance to more than 20 employees?
  2. Are you receiving Federal Black Lung Program benefits?
  3. Is the reason for your visit today an illness or injury due to a work-related accident?
  4. Is the reason for your visit today an injury covered under automobile insurance, no fault insurance or liability insurance?

Kim Guillory of Westside Eye Clinic in Marrero, La., offers this advice: Whenever you’re in doubt, get in touch with your local Medicare carrier and find out what they have on file as the patient’s primary insurance.

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