Policies and Procedures

Function: DEPARTMENTAL POLICIES AND
PROCEDURES
/ Department: Registration/PBX
Scope: Department
Subject: MEDICARE SECONDARY PAYER / Reference No: 6.18
Page: 1 Of 2

“Medicare Secondary Payer” (MSP) is the term used by Medicare when it is not responsible for paying a claim first. The purpose of this is to shift costs from the Medicare program to private sources of payment.

When Medicare is the secondary payer, the order of payment is the reverse of what it is when Medicare is primary….the other payer pays first and Medicare pays second. This means that the provider (Abbeville General Hospital) must first submit the claim to the primary payer, and if the primary payer does not pay in full for the services, Medicare secondary benefits may be paid for the services.

Medicare remains the primary payer for beneficiaries who are not covered by other types of insurance. Medicare is also the primary payer in other instances, provided several conditions are met.

Federal regulations require that efforts be made with all Medicare patients treated to determine if Medicare is the primary payer or secondary payer for each inpatient admission of a Medicare beneficiary and outpatient encounter with a Medicare patient. You must accomplish this by asking the beneficiary about other insurance coverage for every admission, outpatient encounter, or start of care. Exception: recurring outpatient services – following the initial collection, the MSP information should be verified once every 90 days. [A Medicare beneficiary is considered to be receiving recurring services if he receives identical services and treatments on an outpatient basis more than once within a billing cycle.]

Federal regulations require that the provider (Abbeville General Hospital) agrees to maintain a system that, during the admission process, identifies any primary payers other than Medicare, so that incorrect billing and Medicare overpayments can be prevented. Based on this regulation, we must document and maintain MSP information for Medicare beneficiaries.

Common situations where Medicare as primary may be questionable:

Employer Group Health Plans – Medicare is the secondary payer for individuals with employer group health plan (EGHP) coverage.

·  Working Aged – beneficiaries age 65 or over who have EGHP coverage because of their current employment or their spouse’s current employment. For the working aged, Medicare is secondary payer for claims.

·  End-Stage Renal Disease/Permanent Kidney Failure – Medicare is secondary payer to an AGHP for 30 months for beneficiaries who have Medicare because of permanent kidney failure, whether it is the beneficiary is the primary covered or the beneficiary is a dependent.

·  Disability – Medicare is secondary payer for beneficiaries under age 65 who have Medicare because of a disability and who are covered under an EGHP.

Accident/Illness Insurance Plans – Suppliers are required to ask Medicare patients, or their representatives, at the start of care, if services are for treatment of an injury or illness which resulted from an automobile accident or other incident for which he holds another party responsible.

·  Workers’ Compensation

·  Black Lung Program

·  No-fault Insurance

·  Liability Insurance

Government Program Health Plans

Veterans Administration (VA)

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