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Electronic Medicare Secondary Payer Specifications for Inbound Claims

The following information is intended to provide you and your software vendor with a reference point for electronically billing MSP claims. Use this information to assist in reporting the appropriate MSP information in the ANSI format. 

Note: Medicare tertiary claims cannot be billed electronically at this time.

This document is designed to give examples and describe the required fields in relation to the ASC X12 Implementation Guide (IG) for 837I, Institutional Health Care Claims, refer to the WPC website for the 837I IG. 

In order to bill MSP claims electronically for Medicare Part A, home health and hospice, and federally qualified health centers, there are some critical pieces of information that are necessary to ensure claims are processed and adjudicate correctly. MSP claims require:

  • indication of Medicare as the secondary payer;
  • value codes;
  • condition codes;
  • occurrence codes;
  • claims adjustments (situational); and
  • amounts from primary payer.

Indication of Medicare as the Secondary Payer

SBR Segment

All MSP claims are created around the assumption that Medicare is the secondary payer (e.g., the beneficiary has other insurance that pays the health care claim prior to Medicare). The basic principle behind filing a MSP claim to Medicare is to report all payment information the primary payer provided and indicate that Medicare is the secondary payer. The ANSI X12 IG indicates primary, secondary, and tertiary payers by using the SBR01 segments in the 2000B and 2320 Loops. The SBR segment is used to record information specific to the primary insured and the insurance carrier for that insured. Use the SBR segment in the 2000B loop to report what type of claim is being submitted. The values for SBR01 are: 

  • P = Primary
  • = Secondary
  • T = Tertiary

Report the SBR01 element in loop 2000B with the value of “S”, meaning Medicare is secondary.

The example below demonstrates Medicare as a secondary payer.

2000B/SBR

Segment Syntax: SBR*S*18**MEDICARE*****MA~

SBR01 = “S” indicates secondary payer

SBR02 = “18” indicates the relationship code as “self”. Represents patients
relationship to the person insured. If the subscriber is not the same person
as the patient, this element would not be used.

SBR03 = not used

SBR04 = “MEDICARE” indicates Medicare, this is a name field

SBR05 - SBR08 = not used 

SBR09 = “MA” indicates Medicare Part A


Report the name of the primary insurance company information in the SBR01 element in loop 2320 with the value of “P” meaning other insurance is primary. 

The example below demonstrates Medicare as a secondary payer.

2320/SBR

Segment Syntax: SBR*P*01*A12345*BCBS*****CI~ 

SBR01 = “P” indicates primary payer

SBR02 = “01” indicates the relationship code as “spouse”. 
Represents patients relationship to the person insured.

SBR03 = "A12345" indicates the group number for the primary insurance

SBR04 = “BCBS” indicates Blue Cross Blue Shield is the name of the primary
insurance

SBR05 - SBR08 = not used

SBR09 = “CI” states the primary insurance is a “Commercial Insurance Co.”
For a complete listing of all primary insurance codes refer to the 837I IG.


Value/Condition/Occurrence Codes

HI Segments

To prevent delays in claim processing, all available coding options should be used. This includes value, condition and occurrence codes when appropriate. These codes are contained in the 2300 loop HI segments, identified by individual qualifiers. Multiple HI segments are used in the 2300 loop. 

The example below displays the HI segment.

2300/HI 

Value Codes:

2300/HI

Value Code Segment Syntax: HI*BE>14>>>153

HI01-01 = “BE” indicates value code

HI01-02 = “14” value code representing “No-Fault”1

HI01-05 = “153” indicates the total amount paid ($153.00) by the primary
payer


Note: If you are obligated to accept, or voluntarily accept an amount OTAF from the primary payer (a.k.a. your contractual obligation), you must identify this amount as Value Code 44 in the 2300 HI Value Information. This amount is also known as the obligated to accept as OTAF. Details of the MSP payment provisions may be found in the CMS Medicare Secondary Payer Manual and in the Federal Regulations at 42 CFR 411.32 and 411.33. 

Condition Codes

2300/HI

Condition Code Segment Syntax: HI*BG>02 

HI01-01 = “BG” indicates condition code

HI01-02 = “02” condition code representing ‘Employment related”2  


Occurrence Codes

2300/HI

Occurrence Code Segment Syntax: HI*BH>05>D8>20091005 

HI01-01 = “BH” indicates occurrence code

HI01-02 = “05” occurrence code indicating “Other Accident”3

HI01-03 = “D8” indicates a CCYYMMDD format

HI01-04 = Date of occurrence 


NTE Segment - 2300 Billing Note Segment -

The Billing Note segment in the 2300 loop should used electronically to give additional information on a particular claim.  For MSP claims, it is used to report the primary payer’s address. For conditional claims, it is used to report the primary payer’s address and to indicate, using a two-digit reason code and a date if applicable, the reason why the primary payer has not made payment. The two-digit reason code, from which there are 10 to choose, was developed by National Government Services and not by CMS. Some of these codes also require an associated date and the code “FG” also requires a brief explanation as to which of the primary payer’s rules was not followed. A link to our conditional billing instructions, as well as to our “MSP and Conditional Claim Billing Code Chart”  which explains all 10 codes, has been provided below under “References”. This field is limited to 80 characters only.   

Example 1:

2300/NTE

CAS Segment Syntax: NTE*ADD*Information needed for MSP or conditional claim here~

NTE01 = “ADD” indicates the Billing Note segment

NTE02 = “Information needed for MSP or conditional claim here” indicates
where to place additional information needed to adjudicate MSP claim.


Claim Adjustments

CAS Segments

Adjustments made by the primary payer are reported in the CAS segment. Providers must take the CAS segment adjustments (as found on the 835 ERA) and report these adjustments electronically into their software (unchanged) when sending the claim to Medicare for secondary payment. 

Claim level—2320 CAS Segment

The CAS segment in the 2320 loop should be used to report prior payers claim level adjustments that caused the amount paid to differ from the amount originally charged. This segment would normally report information returned on the previous payers 835 remittance advice or explanation of benefits (EOB).  

For conditional payments, the CAS should contain the total billed amount. 

Example 1:
2320/CAS

CAS Segment Syntax: CAS*OA*42*100*1~

CAS01 = “OA” indicates claim adjustment group code “Other Adjustments”
see table 1

CAS02 = “42” indicates the claim adjustment reason code (CARC)4

CAS03  = “100” indicates the adjustment amount

CAS04  = “1” indicates service line adjusted units


Example 2:
2320/CAS

CAS Segment Syntax: CAS*PR*2*159.35*1

CAS01 = “PR” indicates claim adjustment group code“ Patient Responsibility”
see table 1

CAS02 = “2”  indicates the claim adjustment reason code (CARC)4

CAS03  = “159.35” indicates the adjustment amount

CAS04  = “1”  indicates service line adjusted units 

Table 1
Adjustment Group code Description
CO Contractual Obligations
CR Corrections and Reversals
OA Other Adjustments
PI Payer Initiated Reductions
PR Patient Responsibility


Line Level—2430 CAS Segment—Line Adjustment Information

Line adjustment information is reported in the CAS segment, including the claim adjustment group code, claim adjustment reason code and the monetary adjustment amounts. Line adjustments should be provided if the primary payer made line level adjustments that cause the amount paid to differ from the amount originally charged. 

2430/CAS

Segment Syntax: CAS*CO*42*423.55*1*2*51.45*1~ 

CAS01 = “CO” indicates claim adjustment group code “Contractual Obligations”
see table 1

CAS02 = “42” indicates the claim adjustment reason code (CARC)4

CAS03  = “423.55” indicates the adjustment amount

CAS04  = “1”  indicates service line adjusted units

CAS05 = “2” indicates the claim adjustment reason code (CARC) 4

CAS06 = “51.45” indicates the adjustment amount

CAS07 = “1” indicates service line adjusted units 


Amounts From Primary Payer

AMT Segments 

Payer Paid Amount

This segment is required in this loop if the primary payer has adjudicated the claim. It is acceptable to show “0” (zero) as an amount paid. 

2320/AMT

Segment Syntax: AMT*D*637.42~

AMT01 = ‘D’ indicates Prior Payment – Actual

AMT02 = “637.42” indicates the amount

For conditional claims, payments prior paid amount is ‘0’ 


This monetary amount should match the claim total amount in the CLM 02.

For conditional claims, payment total submitted charges are the total billed amount

The general balancing calculation is:

Balancing Calculation Calculation from the examples above
2320.AMT*C4
  + 2320.CAS
  + 2430.CAS
= 2320.AMT*T3
  637.42                (Payer Paid Amount)
+(100.00 +159.00) (All Claim level CAS adjustments)
+(423.55+51.45)    (All Line level CAS adjustments)
=1371.42               (Total Submitted Charges)


If you are experiencing trouble with these fields, providers using EMC software, contact your EMC software vendor with any questions regarding the electronic submission of MSP conditional claims/adjustments. 

Providers using PC-ACE, contact the NGS EDI Help Desk: 877-273-4334.

Information regarding billing guidelines for MSP claims, conditional MSP claims and MSP adjustments. Please refer to the MSP section of our website.

Additional information regarding changes made with CR 6426 and MSP billing.

The CAS segment adjustment amounts are used in determining MSP payment. As a result of the above changes made in CR 6426, the following are tips to adjusting and correcting MSP claims:

  • When a provider needs to correct or adjust any MSP claims billed, they must do this electronically. These adjustments must be reported with a TOB of XX7 and cancels must be reported with a TOB of XX8. Providers should follow all usual rules for submitting adjustment or cancel claims. Providers must also fill out the 2300 REF02 the qualifier for the REF segment would be 'F8' or field 64 on the UB. Place the original DCN in this field. This is only filled out for cancel or adjustment claims.
  • Any MSP claim that would RTP for any reason (location TB9997 in DDE) will need to be sent as a brand new claim electronically. This will not duplicate against the claim that is RTPd for TB9997, as this is not a finalized claim. Providers may suppress the TB9997 from view via DDE.
  • Providers are reminded MSP claims can still be viewed via DDE.
  • 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 value code 44 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 with the amount actually received from the insurance company.  See the reference for value codes below under ”Related Content.”
  • If the primary insurance denied the claim, use an occurrence code 24 with the date the primary insurance denied the claim, submit a conditional claim and use the appropriate value code with a $0.00 dollar amount. Include a two-digit explanation code in remarks that represents the reason the primary payer did not make payment on the claim.  See references for our conditional billing instructions and our “MSP and Conditional Billing Code Chart” below under ”Related Content.”

Related Content