Determine if Medicare Will Make Payment on an MSP Claim

Table of Contents

• Determine if Medicare Will Make Payment on an MSP Claim
• Step 1: Determine if Medicare will Make an MSP Payment
• Step 2: Determine the Amount of Secondary Benefits
  • Billing Reminders Which Can Affect your Medicare Payment
• Related Content

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Determine if Medicare Will Make Payment on an MSP Claim

This information applies when you have filed a proper claim (one that meets all filing requirements specified by the primary payer) with the primary payer before submitting the claim to Medicare as secondary.

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Step 1: Determine if Medicare will Make an MSP Payment

An MSP payment may be made if:

• Primary payer’s payment for Medicare covered charges is less than your charges for those services and less than the total payable by Medicare in the absence of the primary payer’s payment, and
• You do not accept and are not obligated to accept the primary payer’s payment full payment for the services

No MSP payment is made by Medicare if:

• Primary payer’s payment for Medicare covered charges equals or exceeds your charges for those services or the Medicare total payment (without regard to deductible or coinsurance), or
• You accept, or are obligated to accept, the primary payer’s payment as full payment for the services, and you receive this amount

Note: If you are fully paid by the primary payer, National Government Services recommends you still submit an MSP claim to Medicare in order to document services rendered.

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Step 2: Determine the Amount of Secondary Benefits

Determine three possible payment amounts:

1. Actual charge by the physician/supplier or obligated to accept minus  amount paid by primary.
2. Usual Medicare payment determination.
   Fee schedule amount (minus any deductible)
   Multiply results by 80% (or other as appropriate)
3. Highest allowed amount minus amount paid by primary.
   MPFS or amount payable under Medicare (not including deductible or coinsurance)
   Primary payer’s allowed amount.

Medicare pays the lesser to the three amounts.

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Billing Reminders Which Can Affect your Medicare Payment

1. Report your actual charges, not what you’ve estimated is due from Medicare, as Medicare payment calculations are based on the total charges.
2. If you are under an obligated to accept payment as payment in full (OTAF) contract or obligation, you must ensure that report that situation on the claim form or the electronic equivalent.
3. For electronic claim submissions (837P claims) of MSP (and conditional) claims, you must report the CARCs and claim adjustment group codes from the primary payer’s remittance advice. Medicare uses this information to determine the amount, if any, of Medicare’s secondary payment.
4. Do not enter an amount in Items 29 (Amount Paid) or 30 (Balance Due) or their electronic equivalents for MSP claims. Amounts listed in these Items will result in incorrect MSP payment amounts and may cause a check to be mailed to the patient instead of to your office.

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Related Content

• CMS IOM Publication 100-05, Medicare Secondary Payer Manual, Chapter 5, Contractor Prepayment Processing Requirements, Section 40.7  
• CMS-1500 Claim Form Completion Instructions
• National Uniform Claim Committee 1500 Claim Form Map to the X12N Health Care Claim: Professional (837)

Revised 10/25/2023