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MEDICARE SECONDARY PAYER Medicare Secondary Payer (MSP) refers to situations where the Medicare program does not have primary responsibility for paying a beneficiary's health care expenses. The Medicare beneficiary may be entitled to other coverage that should pay primary health benefits before Medicare. Medicare providers are responsible for identifying the primary payer at the time of admission or service. Through HIQA, providers have the capability and responsibility to view the following MSP information maintained in the Common Working File (CWF) prior to claim submission:
This information should be viewed during the admission process and discussed with the beneficiary. This data or more recent information obtained from the beneficiary should be used for billing purposes. All MSP information must be documented regardless of the type of facility or service being rendered. There are eight basic types of MSP involvement:
Since 1980, changes in the Medicare law have resulted in Medicare being the secondary payer for individuals who:
Employer Group Health Insurance Why is Medicare secondary to individuals with Employer Group Health Plan (EGHP) coverage? Federal Law requires that employers offer to their employees age 65 or over and to their spouses, of any age, the same coverage offered to employees and their spouses under age 65, i.e., coverage that is primary to Medicare. This equal-benefit rule applies to coverage offered to full-time and part-time employees. Medicare beneficiaries are free to reject employer plan coverage, in which case they retain Medicare as their primary coverage. When Medicare is primary payer, employers cannot offer such employees or their spouses secondary coverage of items and services covered by Medicare. Where an EGHP is the primary payer but does not pay in full for the services, secondary Medicare benefits may be paid to supplement the amount the EGHP paid for the Medicare-covered service. If an EGHP denies payment for services because they are not covered by the plan primary Medicare benefits may be paid, if Medicare covers the services. Medicare is secondary payer to some group health plans. (GHPs) for services provided to the following groups of Medicare beneficiaries: working aged, certain disabled individuals, and individuals with end-stage renal disease/permanent kidney failure. Working Aged Working aged are beneficiaries age 65 or over who have group health plan (GHP) coverage because of their current employment or their spouse's current employment. For the working aged, Medicare is secondary payer for claims to the GHP. For the purposes of the MSP Working Aged provision, a GHP is any health plan that is for, or contributed to by, an employer of 20 or more employees that provides medical care, directly or through other methods, such as insurance or reimbursement, to current or former employees and their families. The "20 or more employees" threshold is met when an employer has 20 or more full-time and/part-time employees for each working day in each of 20 or more calendar weeks in the current calendar year or the preceding calendar year. The 20 calendar weeks do not have to be consecutive. The requirements of the Medicare secondary payer law are based on the number of employees, not the number of people covered under the plan. Disability Medicare is the secondary payer for claims for beneficiaries under age 65 who have Medicare because of a disability and who are covered under a large group health plan (LGHP) through their current employment or through the current employment of any family member. A group health plan that covers employees of at least one employer that had 100 or more employees on 50 percent or more of its business days during the preceding calendar year meet the definition of an LGHP. LGHPs include plans sponsored or contributed to by an employer or employee organization (such as a union), as well as plans in which employees pay all the costs. The plan provides health care to employees, former employees, the employer, or their families, and covers at least 100 or more full-time and /or part-time employees. End-Stage Renal Disease/Permanent Kidney Failure For individuals who have Medicare entitlement or eligibility because of permanent kidney failure, during the first 30 months of that eligibility or entitlement, the GHP must be the primary payer. This requirement applies to both those with permanent kidney failure who have their own coverage under a GHP and to those covered under a GHP as dependents. The GHP is primary to Medicare during the periods described below. This rule applies without regard to the number of employees and without regard to the enrollee's employment status. The period for which the GHP is the primary payer begins with the earlier of:
AUTO NO-FAULT AND LIABILITY Liability insurance provides payment based on legal liability for illness, injury or damage to property. Liability insurance includes, but is not limited to:
OBRA 1980 made Medicare the secondary payer of claims for medical items and services payable under automobile liability insurance, uninsured motorist insurance or under insured motorist insurance. VETERANS ADMINISTRATION (VA) Medicare became the primary insurance coverage for the elderly with the beginning of the Medicare in 1966. Veterans Administration benefits were an exception. The VA may authorize providers to render services at Federal Expense, to certain veterans with service connected disabilities and, in certain circumstances, with non-service connected disabilities. An authorization issued by the VA binds the BA to pay in full for the items and services provided. It is generally advantageous for Medicare beneficiaries who are veterans to have items and services paid for by the VA where possible, since the VA has no deductible or coinsurance requirements. When a facility accepts a veteran as a patient and bills the VA, they must accept the VA's determination as payment in full. Therefore, neither the patient no another party can be charged an additional amount. | ||||
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