Many Medicare beneficiaries are entitled to insurance benefits from an insurer other than Medicare. By law, Medicare carriers and intermediaries must determine whether the Medicare Program should be the primary or secondary insurer. If the beneficiary is entitled to benefits from another insurer, Medicare will make secondary payments only. When the Medicare Program pays secondary to another insurance, it is referred to as Medicare Secondary Payer (MSP). The laws that govern these provisions have allowed Medicare to save billions of dollars in claims that would have otherwise been paid by Medicare as the primary insurance.
**This provision does not include supplemental Medicare insurance. It refers only to those insurers who would be liable to pay before Medicare.**
It is very important that Medicare receive the correct information as soon as possible. If Medicare is not aware that another insurance is primary or if the information we receive is wrong, Medicare may make incorrect payments. Medicare will then need to request refunds of any overpayments. Likewise, if Medicare has incorrect information that there is another insurance when Medicare is actually primary, claims could be incorrectly denied.
The most common types of insurance to which this applies include:
Employer Group Health Plan: This involves beneficiaries age 65 or older who have Employer Group Health Plan (EGHP) coverage through their own employment or through employment of their spouse.
Disability: This applies to disabled beneficiaries under age 65 who have health insurance under a Large Group Health Plan (LGHP) either through a family member or through their employment if they are currently working.
End Stage Renal Disease: This is for beneficiaries who have End Stage Renal Disease (ESRD) and are covered in an EGHP of their own, their spouses or a parent's employer. Medicare pays secondary for a period of up to 30 months.
Automobile: Medicare is secondary to all auto claims unless maximum benefits have been paid out or if the auto insurance denies payment. If this is the case, Medicare will need a letter from the insurance company stating that benefits have been exhausted.
Liability: These involve claims such as injuries in stores and other public places, public transportation systems, other people's homes, malpractice suits and automobile cases where the bills exceed the auto insurance limitations.
Worker's Compensation: This applies to any work-related illness or injury. If a claim is contested, conditional Medicare benefits may be paid pending the Worker's Compensation Board decision. This is done to avoid a hardship on the Medicare beneficiary, as there is frequently a long delay in these decisions. When billing Medicare, you must include a statement that the claims are being contested. If it is determined that Worker's Compensation is responsible, Medicare will recover any conditional benefits paid.
Claims must be sent to the primary insurance first.
When the Explanation of Benefits (EOB) is received, a claim should be submitted to Medicare for secondary benefits. A copy of the EOB from the other insurer must be sent with the claim.
Please take an active role in your health insurance. Do not assume that someone else is taking care of your insurance. Anytime there is a change in your insurance such as retirement or change in companies, notify Medicare immediately.