Medicare has a responsibility to make payment for covered medical expenses only after another insurer (i.e., secondary to), who is deemed to be the primary payer, has made payment. The statute intentionally shifts the financial burden for covered medical expenses from Medicare to other insurers that Congress has determined must be primary payer. Section 1862(b)(2)(A) of the Social Security Act prohibits Medicare from making payment if payment has been made, or can reasonably be expected to be made promptly by a third-party payer. If payment has not been made, or cannot be expected to be made promptly, Medicare may make a conditional payment, subject to reimbursement.

A conditional payment may be made when Medicare has knowledge that another insurer is primary to Medicare, and the primary payer has not made prompt payment (within 120 days, only applicable for the Federal Black Lung Program, Workers’ Compensation and accidents), or has not made payment on the claim for an acceptable/valid reason. From a reimbursement standpoint, a claim paid conditionally will pay the same as if there was no insurance other than Medicare.

In general, conditional claims “look like” Medicare Secondary Payer (MSP) claims since the primary payer is reported as the first payer and Medicare is reported as the secondary payer (unless Medicare is tertiary). However, the primary payer’s payment amount is zero. The following instructions explain how to code claims submitted to Medicare for which conditional payment is being requested and explain how Medicare processes claims submitted conditionally. Please note that as of April 1, 2007, these instructions may be a change for some of our providers. That is because providers in certain states serviced by National Government Services as their Part A fiscal intermediary had previously been instructed to submit Medicare primary claims (with certain additional coding) when a primary payer did not make payment on a claim for an acceptable/valid reason. Current instructions no longer permit claims requesting conditional payment to be coded as Medicare primary claims. Claims requesting conditional payment from Medicare must be coded as conditional claims.

Note: Conditional claims can be submitted electronically.

Instructions for Submitting Conditional Claims to Medicare
To submit conditional claims, the following information must be reported in addition to the information typically reported on Medicare claims.

MSP Value Code (VC) and Amount of Zero (UB-04, Form Locators [FLs] 39 –41)
Report an appropriate MSP VC for the correct MSP provision/category into which the beneficiary falls (options: 12, 13, 14, 15, 41, 43, and 47) along with six zeros (0000.00) to show that no payment was received from the appropriate primary payer. Refer to the UB-04 Claim Format Help Sheet for descriptions of the available MSP VCs. Note: Do not submit conditional claims for MSP VC 16 (Public Health Service or Government Research Program) or MSP VC 42 (Veteran’s Administration).

Occurrence Code (OC) and Date (UB-04 FLs 31 –34)
For all accident and Workers’ Compensation cases (MSP VCs 14, 15 and 47), report the appropriate OC (options: 01, 02, 03, or 04) with the date of accident (injury/illness). Refer to UB-04 Claim Format Help Sheet for descriptions of the available MSP OCs.

For all MSP VCs, report OC 24 and the date of primary payer’s denial/rejection. Note: Do not report an OC 24 and date of the primary payer’s denial/rejection if the claim is the result of not receiving a prompt payment from the primary payer (applicable for MSP VCs 14, 15 and 47 only). Rather, report a two-position explanation code of “DA” along with the date the primary payer was billed in MM/DD/YYYY format in the Remarks field (UB-04 FL80).

Primary Payer ID Code
There is no FL on the UB-04 for a primary payer ID code. If the provider is submitting a claim through the Fiscal Intermediary Standard System (FISS) using the Medicare Part A Direct Data Entry (MEDA DDE) System, it should report the primary payer ID code of “C” on Claim Page 03 regardless of the MSP provision/category into which the beneficiary falls.

Name of Primary Insurer (UB-04 FLs 50 A, B, C)
Report the complete name of the primary insurer on line 50A. Examples of unacceptable primary insurer names include but are not limited to:

• Liability insurer
• Automobile insurance
• Liability (potential), or
• BC/BS (without the corresponding plan name and number)

Address of Primary Insurer
There is no FL on the UB-04 for the address of the primary insurer. If the provider is submitting a claim through the FISS using the MEDA DDE System, then it should report the address of the primary insurer on Claim Page 06. If a provider is submitting a claim electronically, it should report the address of the primary insurer in the Remarks field (UB-04 FL 80).

Insured’s Name (UB-04 FLs 58A, B, C)
Report the complete name of the insured on line 58A.

Patient’s Relationship to Insured (UB-04 FLs 59A, B, C)
Report the patient’s relationship to the insured on line 59A.

Insured’s Unique ID (UB-04 FLs 60A, B, C)
Report the insured’s ID on line 60A.

Insurance Group Name (UB-04 FLs 61A, B, C)
Enter the name of the insurance group on line 61A.

Insurance Group Number (UB-04 FLs 62A, B, C)
Enter the insurance group number on line 62A.

Remarks (UB-04 FL 80)
Report a two-position explanation code to provide the reason why the primary payer did not make payment on the claim. First, the provider needs to determine why the primary payer did not make payment by reviewing the primary payer’s explanation of benefit (EOB) statement or denial/rejection letter. Then, it should select the appropriate two-position explanation code that matches the reason why the primary payer did not make payment. Refer to Two-Position Explanation Codes for a list of two-position explanation codes for conditional claims. Note: Providers should not submit the primary payer’s EOB statement or denial/rejection letter unless it receives a request from us for it on a postpayment basis.

Prepayment Processing of Conditional Claims
Once a conditional claim is submitted accordingly, it will suspend in the FISS system to be checked for the billing requirements identified above. If the required information is provided, the claim will be updated and continue processing. If no additional edits are encountered, the claim will proceed to payment.

However, if the required information is not provided, the claim will be returned to the provider (RTP). The following are some examples of conditional claims that will be RTP:

• Claims with OC 24 and dates that are not submitted conditionally
• Claims with incorrect primary payer ID codes
• Claims with incomplete or generic primary payer names
• Claims with incomplete primary payer addresses
• Claims with no two-position explanation code in Remarks
• Claims with inappropriate two-position explanation codes in Remarks

Refer to Common Reason Codes for Conditional Claims for a list of additional reasons conditional claims may be RTP. The list is not all-inclusive; there may be other reasons why conditional claims may be RTP.

Post-Payment Actions on Conditional Claims
Again, providers should not submit the primary payer’s EOB statement or denial/rejection letter unless it receives a request from us for it on a post-payment basis. For quality assurance purposes, National Government Services, Inc. will request copies of the primary payer’s EOB statement or denial/rejection letter from providers through our post-payment system in two situations:

• Random selection of claims submitted conditionally
• A two-position explanation code of “FG” was reported on the conditional claim. FG means that the beneficiary did not follow the rules/regulations of his/her primary insurance such as using in-network providers, obtaining authorizations, etc.

In either case, if the requested EOB statement or denial/rejection letter is not received within the specified time frame or the information in the EOB statement or denial/rejection letter does not match the two-position explanation code reported, the provider’s payment will be rescinded. Another post-payment letter will be sent notifying the provider that Medicare’s payment of the claim has been rescinded. In the event that payment is rescinded, the provider will have to submit a new conditional claim with the original type of bill (TOB).

In addition, our claims review process includes auditing the provider’s conditional billing practices. If it is found that providers are not complying by not using the appropriate two-position explanation code or not using an explanation code at all, the provider may be put on 100 percent review of all conditional claims submitted.

Note: If a conditional claim is submitted as an adjustment bill, remember to change the original TOB to an adjustment TOB (TOB XX7) and reference the document control number (DCN) of the original claim being adjusted. Failure to change the TOB will result in a claim being rejected as a duplicate claim.

Additional Resources for Conditional Claims
In addition to the various documents referenced throughout this article, providers may also want to refer to the following documents for assistance in conditional billing:

	Required Occurrence Code and Value Code Relationship for Conditional Claims , and
	Conditional Payment Check Sheet

Also, conditional billing information can be found in the Centers for Medicare & Medicaid Services (CMS) Internet Only Manual (IOM) Publication 100-05, Medicare Secondary Payer Manual ; billing codes can be found in the CMS IOM Publication 100-04, Medicare Claims Processing Manual, Chapter 25, Section 75 .