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Printed Date: 9/22/2015
Below we have listed information on the top five errors identified during MSP hospital audits.
1. Failure to submit MSP claim with the correct value code 44 amount causing claim to reject with reason code 33981
When an electronic claim is submitted and the value code 44 amount (the amount provider agreed to accept from primary payer when this amount is less than charges but higher than payment received) and the calculated Obligated to Accept Amount in Full (OTAF) are not equal, the claim rejections occur for reason code 33981. Specifically, the claim adjustment (CAS) segment and value code 44 amounts do not match. If you are obligated to accept, or voluntarily accept, an amount as payment in full from the primary payer, then you must use the group code CO (Contractual obligation) to identify your contractual adjustment amount.
Providers that have a contractual arrangement with a primary payer, or when a contractual adjustment or discount was reported on the primary payer’s explanation of benefit (EOB) statement, and a payment is due from Medicare and the primary payer paid less than the contractual arrangement by applying deductible and/or co-insurance, providers are to report the contractual agreement dollar amount in the value code 44. Providers are required to include CAS segment related group codes, claim adjustment reason codes and associated adjustment amounts on MSP 837 claims. CAS segment information is needed to properly process your MSP claims and for Medicare to make a correct payment. This includes all adjustments made by the primary payer, which, for example, explains why the claim’s billed amount was not fully paid.
2. Failure to verify information provided on the MSP questionnaire with Common Working File prior to submission of claim to Medicare to avoid rejections
Charges for Medicare patients should not be billed unless the provider can verify that:
3. Failure to submit the MSP claim with the correct primary payment amount
Providers are required to submit the actual payment amount received by the primary payer with the appropriate value code as noted on the explanation of benefits.
4. Failure to utilize condition code 77 when the obligated to accept as payment in full amount (OTAF) from the primary payer is received and no payment is expected from Medicare
If full payment is made by the primary payer and it equals or exceeds the provider’s charge for those services, then the provider should utilize condition code 77 when it receives an amount that is obligated to accept from the primary payer as payment in full (Chapter 3, Section 40.1.1 and 40.1.2 (PDF, 477 KB)) and no payment is expected from Medicare. The provider submits a "no pay" bill for determining the benefit period. A "no pay" bill is essential in notifying Medicare that primary payer payments can be applied or credited to the beneficiary’s deductible when it has not been met. When there is an indication that workers’ compensation (WC) may pay for services, the provider bills the WC carrier. If the WC pays for all of the services (whether at the provider’s customary charge rate or at a special WC rate) the provider submits a Medicare bill indicating the insurer paid in full. The beneficiary’s Medicare deductible will be credited; however, no payment will be made (Chapter 3, Section 30.2.2). This regulation applies to inpatient hospital bills (Part A), Skilled Nursing Facilities (SNF), outpatient bills (Part B Inpatient Services) and home health associations (HHA).
5. Incorrect use of Medicare Secondary Payer (MSP) related condition codes 09, 10, 11, 28 or 29
When used correctly, MSP Related Condition Codes 09, 10, 11, 28 or 29 are data elements used to communicate information about employment and the retirement date.
CMS Regulation References
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Last Updated: 10/08/2019