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Getting Medicare-Secondary-Payer Claims Right the First Time

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When is Medicare not responsible for primary payment for beneficiaries’ medical claim? CMS has detailed this issue in a fact sheet for physicians and administrators.

Medicare secondary payer (MSP) is the term used by Medicare when Medicare is not responsible for paying a claim as primary. When Medicare began operations on July 1, 1966, it was the primary payer for all beneficiaries, except those who received benefits from the Federal Black Lung Program, workers’ compensation (WC) and those who received all covered heath care services through the Veterans Health Administration (VHA) programs.

Beginning in 1980, changes to Medicare laws increased the number of benefit programs that are primary to Medicare. The additions to the MSP requirements included:

  • 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 age 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 the current employment of a family member 
  • 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 e-talk communication, Nancy LaVergne, CPC, OCS, of Jackson Eye Associates, PLLC, reminds her administrative colleagues that in all the cases listed above, claims should be sent to them rather than Medicare. When payment or denial is received from these courses, Medicare should be billed for consideration of secondary payment.

CMS estimates the MSP program has resulted in an annual savings in excess of $4.5 billion.

With the increase in additional insurance plans than render Medicare as the secondary payer, it is the patient’s responsibility to provide the physician’s offices with accurate, up-to-date information about their coverage.

Medicare Coordination of Benefits
Medicare coordination of benefits (COB) is a CMS effort to identify additional health benefits available to a Medicare beneficiary and to coordinate the payment process to prevent and minimize erroneous Medicare payments. The COB contractor initiates all MSP claim investigations. These investigations may occur if a provider submits a claim that contains new health insurance information or information that conflicts with what currently exists on Medicare’s beneficiary records. The investigation determines if Medicare or the other health insurance is the primary payer for a beneficiary’s claims.

Asking the right questions of your patients at each encounter can help your office submit their claims correctly the first time.

For patients over age 65, you should ask:

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

Kim Guillory of Westside Eye Clinic also recommends that, when in doubt, you check with your local Medicare carrier and ask what they have on file as primary for the patient. They should be able to confirm this information, which will help your claim be processed properly the first time.

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About the author: Sue Vicchrilli, COT, OCS, is the coding executive for the American Academy of Ophthalmic Executives.