Prepare and Submit a Medicare Secondary Payer Claim

Table of Contents

• Background
• Step 1: Determine If You Must Submit an MSP Claim
• Step 2: Prepare an MSP Claim
  • MSP Billing Code Table
• Step 3: Check for a Matching MSP Record for the Beneficiary in the Common Working File
• Step 4: Submit the MSP Claim
• Step 5: Keep Checking for the MSP Claim to Process
• Step 6: Return or Resubmit a Corrected Claim
• Related Content

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Background

Before submitting an MSP claim, you must have conducted an MSP screening process and determined there is a primary payer(s) based on an MSP provision(s). Refer to Identify the Proper Order of Payers for a Beneficiary’s Services. You must also have submitted the claim(s) to that payer(s), conducted any necessary follow up with them and received payment (an amount more than zero). If you have, follow the steps below. If the primary payer(s) processed the claim but did not pay it for a valid reason, or, if you billed the primary payer for an accident and have not received a response within 120 days, refer to Prepare and Submit an MSP Conditional Claim.

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Step 1: Determine If You Must Submit an MSP Claim

In most cases, you are required to submit an MSP claim. Submit an MSP claim if the

• Primary payer paid the claim in part (more than zero but less than full payment).
  • Note: Paid in part means the primary payer paid less than Medicare-covered charges or the amount you agreed to accept, per a contract or an obligation under law, as full payment of Medicare-covered charges.  
• Primary payer paid the claim in full and the claim is for
  • home health or hospice services,
  • inpatient services, or
  • outpatient services and the beneficiary has not met the annual Medicare Part B deductible.
  • Note: Paid in full means the primary payer paid Medicare-covered charges or an amount you agreed to accept, per a contract or an obligation under law, as full payment of Medicare-covered charges.

You are not required to submit an MSP claim if the primary payer paid in full, the claim is for outpatient services (other than home health or hospice) and the beneficiary has met the annual Medicare Part B deductible. Although not required, you may still choose to submit this type of claim. 

If a beneficiary has two payers primary to Medicare, the type of claim you submit depends on whether they both paid. If both paid, submit a Medicare tertiary claim reporting both payers and their payment information. If one payer paid but the other did not for a valid reason or within the 120-day promptly period (accidents), submit an MSP claim reporting only the payer that paid and their payment information. Do not report the payer or the payment information for the payer that did not pay.

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Step 2: Prepare an MSP Claim

To prepare the MSP claim, follow these guidelines:

• Report a covered TOB.
  • Do not report a noncovered TOB.
• Complete the claim as usual as if Medicare were primary except report the primary payer(s) before Medicare and Medicare second (or third, if applicable).
• Report any claim coding as usual including services/charges for all Medicare-covered services.
  • Do not just balance bill for charges remaining after the primary payer’s payment.
• If submitting an inpatient MSP claim, report covered and noncovered days/charges as usual.
  • Do not report days/charges paid by the primary payer as noncovered.
• Follow Medicare’s technical (e.g., one-year timely filing) and medical (e.g., clinical and/or assessment) requirements since these apply to all Medicare claims.
  • Hospice providers: Submit the NOE with Medicare as primary. Report the MSP information on the claim(s).
  • Home health providers: Submit the NOA with Medicare as primary. Report the MSP information on the claim(s).
• Follow Medicare’s usual billing requirements (e.g., frequency of billing guidelines for your provider type) since these apply to all Medicare claims. If you are required to submit claims to us from admission to discharge, every 30 days or every 60 days (or at another frequency), this is true even when Medicare is not primary. If another payer was primary for a portion of the claim’s billing period, submit the claim to us as you usually would, but as an MSP claim.
  • Do not split bill your claim during your frequency of billing period if we become primary or secondary during that period.
• Report the applicable MSP billing codes from the MSP Billing Code Table below.
• Report primary payer adjustment(s) using CAGCs, CARCs and amount(s) from their RA.

CAGC(s):

• Required when the primary payer adjusts your billed charges
• Identifies the general category of those payment adjustments
• Options:
  • CO (Contractual Obligations)
  • OA (Other Adjustments)
  • PI (Payer Initiated Reductions)
  • PR (Patient Responsibility)

CARC(s):

• Required when the primary payer adjusts your billed charges
• Explains why the primary payer paid differently than it was billed
• Options: Refer to the primary payer’s RA which shows CARC(s) for each CAGC. If their RA does not provide CARCs and/or CARC definitions, refer to the external code list.

If using FISS DDE to enter the MSP or Medicare tertiary claim:

• In addition to the guidelines above, follow the Claim Entry instructions in the Fiscal Intermediary Standard System/Direct Data Entry Provider Online Guide.
• Enter all required claim coding (non-MSP and MSP) on the appliable claim pages.
• Go to claim page 03 (MAP1713) and press the F11/PF11 key for additional pages (MAP1719).
• Enter CAGC(s) CARC(s) and amount(s) from the primary payer(s) RAs for up to two payers.
  • Enter this information for primary payer 1 (up to 20 entries), if applicable.
  • Enter this information for primary payer 2 (up to 20 entries), if applicable.
• MAP1719 fields:
  • Paid date: Enter the paid date from the primary payer’s RA
  • Paid amount: Enter the paid amount from the primary payer’s RA. This amount must equal the “MSP VC amount” and “charges minus the total of all CARC amounts”.
  • GRP: Enter the CAGC(s)
  • CARC: Enter the CARC(s)
  • AMT: Enter the dollar amount associated with each CAGC and CARC pair.

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MSP Billing Code Table

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Step 3: Check for Matching MSP Record for the Beneficiary in the CWF

For an MSP or Medicare tertiary claim to process, there must be a matching MSP record for the beneficiary in the CWF. Before you submit your claim, check for such a record in the CWF using the provider self-service tools listed under Step 1 in Identify the Proper Order of Payers for a Beneficiary's Services. A matching MSP record is one with the same MSP information you will report on your MSP or Medicare tertiary claim. Note: You would have checked for an MSP record for the beneficiary in the CWF during your MSP screening process. However, we recommend you check again before submitting your claim since the MSP record could have changed between the time you rendered services to the beneficiary and the time you are submitting a claim to us.

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Step 4: Submit the MSP Claim

If there was a matching MSP record in the CWF, submit your MSP or Medicare tertiary claim to us. Ensure the information on your claim matches the information in the MSP record. Note: You would have verified with the beneficiary/representative that the MSP information in the MSP record is current and accurate during your MSP screening process. Refer to Identify the Proper Order of Payers for a Beneficiary’s Services.

If there was not a matching MSP record in the CWF, submit your MSP or Medicare tertiary claim to us ensuring the information on your claim is current and accurate. When processing your claim, we will contact the BCRC to set up a matching MSP record using your claim information.

Submit the MSP or Medicare tertiary claim via:

• 837I claim
• FISS DDE
• Hardcopy format if you have an approved ASCA waiver. Note: You must properly code the claim on a hardcopy UB-04/CMS-1450 claim form, attach any supporting documentation, including the primary payer’s RA and EOB statement, and submit it to the applicable National Government Services Medicare Claims Department. You can find the applicable address on our website under Contact Us.

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Step 5: Keep Checking for the MSP Claim to Process

You can check the status of your MSP claims via FISS DDE:

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Step 6: Return or Resubmit a Corrected Claim

If your claim RTP, follow the reason code narrative and return/resubmit a corrected claim. If your claim rejected, follow the reason code narrative and resubmit a corrected claim. If your claim suspended, wait for the claim to process, RTP or reject and follow the reason code narrative.

Processing MSP or Medicare Tertiary Claims and Setting Up MSP Records

When processing your MSP and Medicare tertiary claim, we compare the claims MSP information to any MSP record(s) in the CWF.

If the claim information matches an existing MSP record’s information, we process the claim. Note: If there is a reason we cannot process your claim, we return it to you and the reason code narrative will advise you of your next steps, if any.

If the claim information does not match an existing MSP record’s information or there is no MSP record, we:

• Set up a matching MSP record using the claim information and a validity indicator “I” (investigational).
  • Note: If your claim does not have all the MSP information we need to set up a matching MSP record, we return it to you to request the missing information.
• Send/transmit the matching MSP record to the CWF so the BCRC can investigate and validate it. When they validate it, they change the validity indicator from “I’ to “Y”, which can take up to 45 days.   
• Process your claim (and subsequent claims) while waiting for the BCRC to validate the MSP record.

There are situations in which we are not able to successfully set up an MSP record in the CWF (validity indicator “I”) and send/transmit it to the BCRC. In these situations, we send the BCRC an Electronic Correspondence Referral System (ECRS) request, with your claim information, asking them to set up, investigate and validate a matching MSP record in the CWF. While our ECRS request is pending with the BCRC, we return your claim. Review the reason code narrative to determine if there is anything you need to do and monitor the CWF, so you know when the MSP record is set up. When you see the MSP record for the beneficiary in the CWF, return or resubmit your claim to us. You should see the MSP record in the CWF within 45 days of when we returned your claim. 

Please be aware the BCRC may not be able to validate an MSP record. This is usually because they did not receive a response to their investigation within 45 days or they received a response to their investigation within 45 days but determined Medicare is the appropriate primary payer. In these situations, the BCRC deletes the MSP record (validity indicator “I”) we set up or they do not set up an MSP record in response to our ECRS request.

• If we processed your claim, our MSP payment is appropriate if we are the secondary payer but may be inappropriate if we are the primary payer. If you learn the BCRC deleted the MSP record (validity indicator “I”) we set up, refer the beneficiary or other party to the BCRC to confirm/negate his/her MSP status and, if applicable, to ask them to set up an MSP record. If the outcome is that Medicare is the primary payer, you may receive notification of a Medicare overpayment, if applicable.
• If we returned your claim, continue to monitor the CWF. If an MSP record does not appear in the CWF within 45 days from the date we returned your claim, refer the beneficiary or other party to the BCRC to confirm/negate his/her MSP status and, if applicable, to ask them to set up an MSP record.  
  • It is possible for the other payer to be the primary payer, but we cannot process your claim until the BCRC sets up the MSP record for the beneficiary in the CWF.  Once they do, you may return or resubmit your claim.  
  • It is also possible for Medicare to be the primary payer and you will need to submit a Medicare primary claim instead.

For more information about how we process your MSP and Medicare tertiary claims, and how MSP records are set up, refer to CMS IOM Publication 100-05, Medicare Secondary Payer Manual, Chapter 5 and Chapter 6.

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Related Content

• ASCA Requirements for Paper Claim Submissions
• CMS Change Request 6426: Instructions on Utilizing 837 Institutional CAS Segments for Medicare Secondary Payer (MSP) Part A Claims
• CMS Change Request 8486: Instructions on Using the Claim Adjustment Segment (CAS) for Medicare Secondary Payer (MSP) Part A CMS-1450 Paper Claims, Direct Data Entry (DDE), and 837 Institutional Claims Transactions
• CMS IOM Publication 100-04, Medicare Claims Processing Manual, Chapter 25, Completing and Processing the Form CMS-1450 Data Set, Section 75
• CMS IOM Publication 100-05, Medicare Secondary Payer Manual,
  • Chapter 3, MSP Provider, Physician, and Other Supplier Billing Requirements, Sections 10.2, 40.1.1 and 40.1.2
  • Chapter 5, Contractor MSP Claims Prepayment Processing Requirements
  • Chapter 6, Medicare Secondary Payer CWF Process
• Coordination of Benefits & Recovery Contact Page (for BCRC)
• Identify the Proper Order of Payers for a Beneficiary’s Services
• Prepare and Submit a Medicare Tertiary Claim
• Set Up a Beneficiary's MSP Record
• Fiscal Intermediary Standard System/Direct Data Entry Provider Online Guide
• X12.org Claim Adjustment Reason Codes

Revised 11/8/2024