Medicare Secondary Payer

March 22nd, 2013 - Codapedia Editor
Categories:   Medicare  
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“The hospital bill was $271,000 and they didn’t get paid a penny.  I have Medicare and Anthem, and I gave them both of my cards.  And I told them Anthem was primary.”

It didn’t end there.  Bob complained weekly about the lab charges, the office visits and a second admission to the hospital.  Bob was a man who had paid his bills all his life, so what happened?  Let me tell you about Bob. Bob is 86 and still working full time in the company he started.  For almost twenty years, he had Medicare as his primary payer, and Anthem as his secondary payer.  Then, the company hired a twenty-first employee. 

Why did the twenty-first employee matter?  Shouldn’t we be celebrating that his company is so successful?  Well, Medicare becomes the secondary payer to the commercial insurance if a firm has over 20 employees.  Bob’s agent told him that, and he dutifully reported this to his physicians, lab provider and two hospitals.  But, somehow, faced with an 86-year-old man, the registration clerk and the biller couldn’t believe it. The claims were sent to Medicare first, and denied.

“Why didn’t they bill Anthem in time?  Now, all of the claims are denied as past the filing limit.” 

How could I answer that?  Any of us who are familiar with physician offices know why this happens.  The denials are set aside to be worked “when there’s time.”  The remittance advice and reason codes with the denials is hard to read.  Unpaid claims are too often simply resubmitted to the payer, without working them.  The payment poster doesn’t work denials, but the denial is sent into a task list.

How could the hospital, lab and physician done this differently to get paid?  Review the Medicare as a Secondary Payer rules.  A pdf is attached to this article under resources, and CMS’s website is linked to this article.

What is the Medicare Secondary Payer program?  MSP was implemented in 1980 to ensure that when a private payer is responsible for a service, Medicare doesn’t pay for it.  The fact sheet states that this program saves the Medicare trust fund more than $8 billion dollars a year. Billing the private insurer in a timely fashion gets the doctor paid quickly and avoids recovery from Medicare.

When is Medicare secondary?  When the patient:

·      Is 65 or older, and is covered by a group health plan or their spouse’s group health plan, when the company has more than 20 employees or the employer is a multi-group employer with more than 20 employees

·      Is disabled and covered by a group health plan through their own current employment or through a family member’s employment, when the company has over 100 employees, or when the employer is a multi-group employer with more than 100 employees

·      Has End Stage Renal Disease and a group health plan, and is in the first 30 months of eligibility or entitlement for Medicare

·      Has End Stage Renal Disease and COBRA and is in the first 30 months of eligibility or entitlement for Medicare

·      Is eligible for Medicare but is covered under Worker’s Comp for a work related injury

·      Has been in an accident or other injury situation where no-fault or liability insurance is involved

How can a physician group know if Medicare is secondary and not primary?  By asking the patient a series of questions at registration.  The MSP fact sheet suggests these questions:

1.    Is the beneficiary covered by any Group Health Plan (GHP) through his or her current or former employment? If so, how many employees work for the employer providing coverage?

2.    Is the beneficiary covered by a GHP through his or her spouse or other family member’s current or former employment? If so, how many employees work for the employer providing the GHP?

3.    Is the beneficiary receiving Workers’ Compensation (WC) benefits?

4.    Does the beneficiary have a Workers’ Compensation Medicare Set-aside Arrangement (WCMSA)?

5.    Is the beneficiary filing a claim with a no-fault insurance or liability insurance?

6.    Is the beneficiary being treated for an injury or illness for which another party has been found responsible?


The second strategy: work denials quickly and effectively.  The hospital, lab and physicians could all have collected from Anthem, and probably at a higher rate than Medicare rates, if the payment poster had worked the denials promptly.  Failure to do so cost them real money.  I’m happy to report that Bob is feeling great, and is back at work at his company full time. Learn from the mistakes made by his caregivers and don’t repeat them.  Not all patients over 65 have Medicare as their primary insurance.


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