Medicare Secondary Payer (MSP)

Correct or Adjust a Claim Due to an MSP-Related Issue

Table of Contents

  • Fact: You can correct a claim that is not finalized (i.e., an RTP claim) by making the appropriate changes to the claim in the FISS DDE Provider Online System and returning the claim (PF9 key). You can correct a claim that is finalized (processed or rejected) by submitting an adjustment claim.

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Step 1: Identify the FISS DDE Status Location of the Claim and the Reason(s) for Claim Correction or Change so You Can Take the Appropriate Action

Claims in Status Location T B9997 (RTP Claims)

  • MSP and conditional claims are RTP in FISS DDE and appear in status location T B9997 with the reason code(s) indicating the error(s) if such claims do not meet Medicare’s claim coding and submission requirements. Effective 1/1/16, per CMS CR 8486, you can correct these error(s) in FISS DDE and return the claim (PF9 key). You cannot adjust these claims since they are not finalized. There are no further steps below for correcting these RTP claims; follow the instructions provided by the reason code in FISS DDE.

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Claims in Status Location P B9997 (Processed Claims)

  • MSP and conditional claims are processed in FISS DDE and appear in status location P B9997 if such claims meet Medicare’s claim coding and submission requirements. You must adjust (TOB XX7) these claims if you want to make changes. Do not cancel (TOB XX8) these claims. Refer to Steps 2 and 3.
  • Medicare primary claims are processed in the FISS DDE and appear in status location P B9997 if such claims meet Medicare’s claim coding and submission requirements and did not reject due to an open MSP record (cost-avoid). You must adjust (TOB XX7) these claims if you want to change to MSP or conditional. Do not cancel (TOB XX8) these claims. Refer to Steps 2 and 3.

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Claims in Status Location R B9997 (Processed/Rejected Claims)

  • Medicare primary claims are processed in FISS DDE and appear in status location R B9997 if such claims reject due to an open MSP record (cost-avoided). You must adjust (TOB XX7) these claims if you want to change to MSP, conditional or back to Medicare primary. Do not cancel (TOB XX8) these claims. Refer to Steps 2 and 3.

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Step 2: Prepare a Claim Adjustment Involving an MSP Situation

Providers may need to make the following adjustments to processed/rejected claims:

  • Adjustments to change processed MSP or conditional claims for any reason
  • Adjustments to change processed Medicare primary claims to make Medicare secondary
  • Adjustments to change Medicare primary claims that rejected for MSP (cost-avoided) to make Medicare secondary (including conditional)
  • Adjustments to change Medicare primary claims that rejected for MSP (cost-avoided) to make Medicare primary (as originally billed)
  • Note: Never cancel claims for any of these reasons; always use the adjustment process

Claim types:

  • MSP = claims submitted to/processed by Medicare as secondary (primary payer paid in part or in full).
  • Conditional = claims submitted to/processed by Medicare conditionally because the primary payer did not pay promptly (accidents only; MSP VCs 14, 15, or 47) or did not pay for a valid reason (all MSP VCs except 16 and 42).
  • Medicare primary = claims submitted to/processed by Medicare as primary.
  • Cost-avoided = claims submitted to Medicare as primary but rejected due to an open MSP record. The FISS rejection reason code is commonly in the 34XXX range.

Timely filing of MSP-related adjustments:

Per Medicare guidelines, providers have one year from the claim’s DOS to submit claims/adjustment claims. However, when MSP is involved, there are two exceptions:

  1. When a claim is submitted to and processed by Medicare as an MSP claim but the primary payer later takes their payment back from the provider, you may adjust the MSP claim within one year of the original MSP claim’s processed date (our RA date). Refer to CMS IOM Publication 100-05, Medicare Secondary Payer Manual, Chapter 3, Section 10.5.
  2. When a claim is submitted to and processed by Medicare as a primary claim but the primary payer later makes payment to the provider, you may adjust the primary claim beyond the one-year timely filing period. But, you must adjust the Medicare claim within 60 days of being paid by the primary payer. Refer to CMS IOM Publication 100-05, Medicare Secondary Payer Manual, Chapter 3, Section 10.4.

Options for preparing claim adjustments (TOB XX7):

There are three options for preparing your MSP-related claim adjustment:

  1. Prepare adjustment via an 837I claim
  2. Prepare adjustment via a hardcopy claim (UB-04/CMS-1450 claim form)
  3. Prepare adjustment in the FISS DDE Provider Online System (effective 1/1/16 per CR 8486)

Adjustment claim coding:

Regardless of which option you use to prepare/submit your MSP-related claim adjustment, you must:

  • Report a TOB XX7
  • Report the original claim’s DCN (or refer to such DCN if using FISS DDE)
  • Report an appropriate condition code (also known as claim change reason code)

If you are preparing your adjustment claim via FISS DDE, you must:

Report an appropriate FISS claim adjustment reason code. A listing of these codes is located in the FISS DDE Inquiry menu (01) Adjustment Reason Code file (16). This FISS claim adjustment reason code is reported in addition to the above-mentioned condition code.

Charts to assist providers in preparing MSP-related claim adjustments:

There are two charts below to assist you in preparing MSP-related claim adjustments:

  1. Preparing MSP-Related Adjustments. This chart provides the claim’s current type, the claim type you want to change to, an example, the condition code you must report on the adjustment and comment codes. These comment codes provide additional instructions that providers must follow. Do not report the comment code(s) on the adjustment claim(s).
  2. Comment Code Definitions. This chart defines the comment codes provided in the Preparing MSP-Related Adjustments chart.

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Preparing MSP-Related Adjustments (TOB XX7) Chart

Current Claim Type Change to Claim Type Example Report Condition Code Follow Instructions for Comment Codes (defined in chart below)
Medicare primary MSP After billing Medicare as primary, you billed a primary payer and received payment. D7 1, 8 (if primary payer is Liability VC 47) and 10.
Medicare primary Conditional After billing Medicare as primary, you billed a primary payer but they did not pay promptly or for a valid reason. D9 2
MSP MSP (claim remains MSP) After billing as MSP, you identified a needed change in MSP claim coding (i.e., a change in MSP VC amount). D9 3 and 10
MSP Conditional After billing as MSP, you received retraction from primary payer (they cited a valid reason for the retraction other than Medicare is primary). D9 2 and 9
MSP Medicare primary After billing as MSP, you received retraction from primary payer (they cited Medicare is primary as the reason for the retraction). D8 4 and 9
MSP rejected (cost-avoided) MSP After billing Medicare as primary (claim rejected for MSP), you billed a primary payer and received payment. D7 1 and 11
MSP rejected (cost-avoided) Conditional After billing Medicare as primary (claim rejected for MSP), you billed a primary payer but they did not pay promptly or for a valid reason. D9 2 and 11
MSP rejected (cost-avoided) Medicare primary After billing Medicare as primary (claim rejected for MSP), you verified that Medicare is primary D9 4, 5, 6, 7 and 11
Conditional MSP After billing Medicare conditionally, you received payment from a primary payer. D7 1, 8 (if primary payer is Liability VC 47) and 10
Conditional Conditional (claim remains conditional) After billing Medicare conditionally, you identified a needed change in MSP claim coding (i.e., change in MSP VC). D9 3
Conditional Medicare primary After billing Medicare conditionally, you determined Medicare is primary. D9 4

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Comment Code Definitions Chart (Additional Instructions for Adjustment Claims)

Comment Code Instruction
1 Report MSP claim coding. Refer to Prepare and Submit an MSP Claim instructions linked on the left.
2 Report conditional claim coding. Refer to Prepare and Submit an MSP Conditional Claim instructions linked on the left.
3 Report MSP claim coding -OR- conditional claim coding. If possible, include remarks in the remarks field of the claim to explain the specific reason for the claim adjustment. Refer to Prepare and Submit an MSP Claim or Prepare and Submit an MSP Conditional Claim instructions linked on the left.
4 When you determine Medicare is primary to a GHP and an open GHP MSP record (MSP VC 12, 13, or 43) requires correction, refer to Correct a Beneficiary's MSP Record.  When you submit the adjustment, refer to Prevent an MSP Rejection on a Medicare Primary Claim for more information on explanatory billing codes that indicate the reason Medicare is the primary payer.
5 If the claim is rejected for MSP (cost-avoided) due to an open accident MSP record (MSP VCs 14, 15, 41, or 47), but you determined the claim is (1) not an accident (i.e., no trauma diagnosis codes) and (2) not related to the open MSP record, then report this in remarks. For example, remarks = “Services not related to open __ <insert MSP VC of the open accident MSP record type> MSP record.” Do not report OC 05 (zero 5) and date.
6 If the claim is rejected for MSP (cost-avoided) due to an open accident MSP record (MSP VCs 14, 15, 41, or 47), but you determined the claim is (1) an accident (i.e., trauma diagnosis codes) but there is no primary payer and it is (2) not related to the open MSP record, then report this in remarks. For example, remarks = “Services not related to open __ <insert MSP VC of the open accident MSP record type> MSP record.” Also, report OC 05 (zero 5) and the date of the current accident.
7 If comment 5 or 6 above applies, refer to Correct a Beneficiary's MSP Record and Prevent an MSP Rejection on a Medicare Primary Claim.
8 If the primary payer is Liability (MSP VC 47), refer to the CMS IOM Publication 100-05, Medicare Secondary Payer Manual, Chapter 2, Section 40.2 letter “E” for instructions since you have already accepted conditional payment from Medicare and should have withdrawn your claim/lien against liability/beneficiary’s liability insurance settlement.
9 When the original claim was submitted to and processed by Medicare as an MSP claim but the primary payer later takes their payment back from the provider, you may adjust the MSP claim within one year of the original MSP claim’s processed date (our RA date).
10 You must repay Medicare within 60 days from the date you receive a payment from another payer (primary to Medicare) for the same service for which Medicare paid.
11 If submitting the adjustment via the FISS DDE, change noncovered days/charges back to covered (as originally billed before claim was cost-avoided). You must delete the noncovered charge lines and rekey each as covered (Place a ‘D’ on claim line, hit <HOME> key, then hit <ENTER> key).

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Step 3: Submit a Claim Adjustment Involving an MSP Situation

You have three options for preparing/submitting such adjustment (TOB XX7) claims:

  1. Via an 837I claim
  2. Via a hardcopy claim (UB-04/CMS-1450 claim form)
  3. Via the FISS DDE Provider Online System (effective 1/1/16 per CR 8486)

For hardcopy claim adjustment submissions, you must properly code the adjustment claim on a hardcopy UB-04/CMS-1450 claim form, attach any supporting documentation (including primary payer’s RA) and submit it to the applicable National Government Services Medicare Claims Department. You can find the applicable address on our website. You do not need to request and be approved for an ASCA waiver if you choose to submit these adjustment claims in hardcopy format but hardcopy adjustments may take longer to process than adjustments submitted via the 837I claim or via the FISS DDE.

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Related Content

Revised 10/26/2023

Helpful Resources

MSP Questionnaire Example

Helpful Resources

BCRC Contact Information

Note: Providers should not call the BCRC to request they set up new or make corrections to existing MSP records. In addition to reporting such information on Medicare claims, when applicable providers may refer beneficiaries and other entities to the BCRC

BCRC Contact

1-855-798-2627

TTY/TDD: 1-855-797-2627

FAX: 405-869-3307