General Provider Information

  1. MSP CATEGORIES: Explanation of MSP laws and regulations.

    1. Employee Group Health Plan (EGHP)

      Medicare benefits are secondary to benefits payable under EGHP for employees age 65 or over and their spouses.

      Medicare is the secondary payer when:
      The employer has 20 or more employees and pays a portion or all of the group health insurance for its employees.

      Medicare is primary when:
      The employer has less than 20 employees; or the plan denies a claim because the benefits are exhausted or services are not covered under the employer plan; or the patient and/or spouse are retired.

      When you have been notified of a Medicare beneficiary’s change in work status, please notify the Coordination of Benefits Contractor (COBC), either by letter or phone.

    2. Large Group Health Plan (LGHP)

      OBRA ’93 (Omnibus Budget Reconciliation Act)
      Effective August 1993, Medicare determines that MSP status for a disabled beneficiary by the existence of a large group health plan (LGHP) coverage based on the individual’s current employment status. The employee must be currently working during the dates of service.

      Medicare is secondary payer when:
      The plan covers employees of at least one employer with 100 or more employees. If the plan is a multi-employer plan (such as a union plan which covers employees of some small employers and also employees of at least one employer that covers 100 or more employees under the plan), Medicare is secondary.

      Medicare is primary when:
      The group plan covers less than 100 employees; or the plan denies the claim because benefits are exhausted or services are not covered under the plan; or the patient, spouse, and/or family member are retired.

    3. End Stage Renal Disease (ESRD)

      Due to the Balanced Budget Act of 1997, effective August 1, 1997, the coordination period for ESRD beneficiaries is 30 months for coordination periods that began March 1, 1996, or later.

      Medicare is secondary when:
      During the coordination period, Medicare is the secondary payer to benefits payable under an employer group plan.

      1. If the beneficiary receives a kidney transplant, the coordination period begins with the date of the first treatment.
      2. If the beneficiary does home/self training dialysis, the 3-month waiting period does not apply and the coordination period will start at the beginning of the month in which the first dialysis treatment was given.
      3. If the beneficiary is receiving hemodialysis, the coordination period starts at the beginning of the fourth month of renal dialysis treatment.

    4. COBRA

      The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) states an employer must offer continuation of group insurance coverage for a specified time to an employee upon job termination. If a beneficiary has COBRA coverage and is entitled to Medicare, then Medicare would be primary, except in ESRD cases. If a beneficiary is entitled due to ESRD, then the COBRA coverage is primary for the coordination period.

    5. Vow of Poverty Provision

      OBRA ’93 makes the exemption from MSP provisions for individuals who have taken a vow of poverty retroactive to 1981. Employers must certify that an individual has taken a vow of poverty with respect to work activity that is the basis for qualifying for the group health plan.

    6. TRICARE

      Medicare is primary over TRICARE. This is a federal program that is supplemental to Medicare.

    7. Automobile/Liability

      Medicare is secondary when:
      The beneficiary has been involved in an automobile accident or in a liability situation in which another party is responsible.

      Medicare is primary when:

      • The beneficiary fell at home or any other situations in which no other party is responsible.
      • The provider or beneficiary has filed a claim under an automobile or nofault insurance policy or plan (including a self-insured plan) and the provider determines the insurer will not pay promptly within 120 days of receipt due to case litigation or resolution of settlement. THE PROVIDER CANNOT BILL BOTH MEDICARE AND THE INSURER AND/OR PLACE A LIEN WITH THE ATTORNEY.
      • The denial from the primary insurer is based on any reason except that the primary insurer offers only secondary coverage of services covered by Medicare.
      • The time limit for filing the claim with the primary insurer has expired.

    8. Workers’ Compensation

      If a patient is involved in a work related accident, the Workers’ Compensation carrier should be billed prior to Medicare.

    9. Federal Agencies

      Federal Law states that payment may not be made for items and services furnished by a provider of service when it can be paid directly or indirectly by a Federal, State, or local government entity.

    10. Black Lung

      If you are aware that a Medicare beneficiary may be entitled to have the services reimbursed by the Department of Labor (DOL) under the Federal Black Lung Program, bill DOL for only Black Lung-related claims and submit a no-payment bill (Medicare Secondary Payer Manual, Publication 100-5, Chapter 5, Section 30.4) to your MAC Contractor. The address for sending bills to DOL is:

      Federal Black Lung Program P.O. Box 828 Lanham-Seabrook MD 20703-0828

    11. Veterans Affairs

      If it is known that a patient is covered by VA, bill Veterans Affairs prior to submitting the bill to Medicare. If the patient is VA eligible and chooses to receive services in a Medicare certified provider, put a 26 in Form Locators 18-28 on your UB04.

  2. Billing Procedures

    When billing Medicare as the secondary payer, all MSP claim submissions need to be submitted via Electronic Media Claims (EMC) or PC-ACE. WPS Medicare cannot accept Medicare Secondary Payer (MSP) claims (including conditional payment claims) that are submitted via fax, or Fiscal Intermediary Standard System Direct Data Entry (FISS/DDE). If you submit your MSP claim/adjustment through DDE it will edit with reason code 31265 and will be returned to you (RTP'd). Providers should contact their software vendor and/or clearing house with any questions regarding the electronic submission of MSP claims via EMC or PC-ACE. Information on Electronic Data Interchange (EDI) may be found at http://www.wpsic.com/edi/(external link). The claim should be completed as a Medicare primary claim with the exception of:

    1. Form Locator 39A-41D

      Enter the MSP value code and amount paid by the primary insurance in these form locators.
      The value codes to be used are:
      12 Working Aged (EGHP
      13 End Stage Renal Disease (ESRD)
      14 No-Fault
      15 Worker’s Compensation (WC)
      16 Other Federal Agencies
      41 Black Lung
      42 Veterans Administration (VA)
      43 Disabled (43)
      44 Used when the hospital has a contract with the insurer to accept a specific amount as payment in full.
      47 Liability

    Value Code 44

    A value code 44 is used when a primary payer pays less than actual charges and less than the amount a provider is contractually obligated to accept as payment in full from an insurance company. A 44 code should only be used for claims where there is a contractual agreement with an insurance company. The value code 44 is used with the amount the provider was obligated to accept. Use the appropriate value code (12, 13, or 43) with the amount actually received from the insurance company. A condition code 77 is used when the insurance pays the entire contractual. Use the correct value code (12, 13, or 43) with the amount actually received from the insurance company.

    1. Form Locator 50A

      Enter the name of the primary payer.

    2. Form Locator 58

      Enter the insured person’s name (last name first).

    3. Form Locator 59

      Enter the patient’s relationship to insured. Use the codes below to identify the relationship to the patient.
      01 Spouse
      04 Grandparent
      05 Grandchild
      07 Niece/Nephew
      10 Foster Child
      15 Ward of the Court
      17 Step Child
      18 Patient is Insured
      19 Natural Child, Insured has financial responsibility
      20 Employee
      21 Unknown
      22 Handicapped Dependent
      23 Sponsored Dependent
      24 Dependent of Minor Dependent
      32, 33 Parent
      39 Organ donor
      40 Cadaver donor
      41 Injured Plaintiff
      43 Natural Child, insured does not have financial responsibility
      53 Life Partner

    4. Form Locator 60

      Enter the insured’s unique identification number.

    5. Form Locator 61

      Enter the name of group or plan through which the insurance is provided to the insured.

    6. Form Locator 62

      Enter the insurance group number.

    7. Form Locator 64

      Document Control Number to identify claim to be adjusted.

    8. Form Locator 65

      Enter the employer name.

    9. Form Locators 31-34- Occurrence Codes

      Use the following occurrence codes when applicable:
      01 Auto Accident
      02 Accident- No Fault
      03 Accident- Liability
      04 Accident- Employment related
      05 Other Accident
      06 Crime Victim
      18 Beneficiary’s Date of Retirement
      19 Spouse’s Date of Retirement
      24 Date Insurance Denied
      33 First Day of Coordination period for ESRD

      Reporting Medicare Secondary Payer (MSP) Occurrence Codes and Retirement Dates
      If beneficiary and/or spouse are retired, the retirement dates must be obtained and reported on the UB04 with occurrence codes 18 or 19. Occurrence code 18 represents the retirement date for the beneficiary and occurrence code 19 represents the retirement date for the spouse. In the event that the beneficiary and/or spouse never worked, no retirement date is required. During the intake process, when the beneficiary and/or spouse cannot recall the precise retirement date, as applicable, hospitals must follow the policy below:

      When a beneficiary cannot recall his or her retirement date but knows that it occurred prior to his or her Medicare entitlement dates, as shown on his or her Medicare card, the provider reports the beneficiary's Medicare Part A entitlement date as the date of retirement. If the beneficiary is a dependent under his or her spouse's group health insurance and the spouse retired prior to the beneficiary's Medicare Part A entitlement date, the provider reports the beneficiary's Medicare entitlement date as his or her retirement date.

      If the beneficiary worked beyond his or her Medicare A entitlement date, had coverage under a group health plan during that time, and cannot recall the precise date of retirement but the hospital determines it has been at least five years since the beneficiary retired, the provider enters the retirement date as five years retrospective to the date of admission. (Example: Hospitals would report the retirement date as January 4, 1998, if the date of admission was January, 4, 2003.) As applicable, the same procedure holds for a spouse who had retired at least five years prior to the date of beneficiary's hospital admission.

      If a beneficiary (or spouse's, as applicable) retirement date occurred less than five years, the provider must obtain the retirement date from appropriate informational sources, e.g., former employer or supplemental insurer.

      Any questions regarding occurrence codes 18, 19 and retirement dates please call the MSP Department at: 1-(866) 518-3284.

      ¹MSP Manual, (hgs.gov/manuals) Chapter 3, Section 20.1

    10. Form Locators 18-28- Conditions Codes

      The following condition codes should be used when applicable:
      02 Condition is employment related
      04 HMO Employee
      05 Lien has been filed
      06 ESRD patient is in first 30 months of entitlement and covered by a group health plan (GHP)
      07 Treatment for hospice patient
      08 Beneficiary would not provide information concerning insurance coverage
      09 Neither patient nor spouse is employed
      10 Patient and/or spouse is employed but no EGHP exists
      11 Disabled beneficiary but no LGHP
      28 Patient and/or spouse EGHP is secondary to Medicare
      77 Provider accepts or is obligated to accept payment by a primary payer as payment in full due to contractual agreement or law

      Medicare Secondary Payer (MSP) Condition Codes 08, 09, 10, 28

      Condition codes 08, 09, 10, and 28 are required on the UB04 for all Medicare Secondary Payer (MSP) situations if applicable. The provider must enter the corresponding condition code (in numerical order) to describe any of the following conditions or events that apply to this billing period.

      Code Title Definition

      08-Beneficiary would not provide information concerning other insurance coverage. The beneficiary would not provide information concerning other insurance coverage. The FI develops to determine proper payment.

      09-Neither patient nor spouse is employed.

      10-patient and/or spouse is employed but no EGHP coverage exists in response to development questions, the patient and/or spouse indicated that one or both are employed but have no group health insurance under an EGHP or other employer sponsored or provided health insurance that covers the patient.

      28-Patient and/or spouse's EGHP is secondary to Medicare. In response to development questions, the patient and/or spouse indicated that one or both are employed and that there is group health insurance from an EGHP or other employer-sponsored or provided health insurance that covers the patient but has two of the following exceptions:

      1. The EGHP is a single employer plan and the employer has fewer that 20 full and part time employees.
      2. The EGHP is a multi or multiple employer plans that elects to pay secondary to Medicare for employees and spouses aged 65 and older for those participating employers who have fewer than 20 employees.

      If you have any questions, please call the MSP Department at 1-(866) 518-3284.

      70.3.1.1 -General Review Requirements
      (Rev. 1, 10-01-03)

    11. Form Locator 80- Remarks

      Many times remarks can be written on the claim to provide the MAC Contractor with information to process the claim more effectively. Below are some examples of remarks for specific situations.

      • Group (GHP, LGHP, and ESRD)
        Group payment applied to deductible Group insurance denied claim.
      • Workers’ Compensation
        Workers’ Compensation denied claim. Settlement benefits denied.
      • Black Lung
        Black Lung denied. Claim not entitled to Black Lung.
      • Veterans Administration
        VA denied claim. No VA coverage.
      • Auto/Liability
        Auto benefits denied. Fell at home no liability.

    12. Form Locator 29- Accident State

Page Last Updated: Thursday, 05-Apr-2012 11:25:28 CDT