Mandatory Claims Filing Requirements

Published 02/07/2018

Section 1848(g)(4) of the Social Security Act requires that you submit claims for all your Medicare patients for services rendered. This requirement applies to all physicians and suppliers who provide covered services to Medicare beneficiaries.

You may not charge your patients for preparing or filing a Medicare claim. The requirement to submit Medicare claims does not mean you must accept assignment.

Compliance of the claims mandatory claim filing requirements is monitored by carriers. Violations of the requirement may be subject to a civil monetary penalty of up to $2,000 for each violation and/or Medicare program exclusion.


Exceptions to Mandatory Filing
You are not required to file claims on behalf of Medicare beneficiaries for:

  • Used DME purchased from a private source
  • Medicare secondary payer (MSP) when you do not possess all the information necessary to file a claim
  • Foreign claims
  • Services billed to the third party insurers (indirect payment provisions)
  • Opting out of the Medicare program by signing private contracts with Medicare beneficiaries
  • Other unusual services (evaluated by Palmetto GBA on a case-by-case basis)
  • Reference — CMS Medicare Claims Processing Manual (Pub. 100-02), Chapter 1, section 

Note: You are not required to file non-covered Medicare services. However, many Medicare supplemental insurance policies pay for services that Medicare does not allow and they may require a Medicare denial notice.

False Claims Act
Prohibits knowingly filing a false or fraudulent claim for payment to the government, knowingly using a false record or statement to obtain payment on a false or fraudulent claim paid by the government, or conspiring to defraud the government by getting a false or fraudulent claim allowed or paid. See 31 U.S.C. 3729(a) of the Act for additional details/exclusions/statutory exceptions.

Assigned Claims
Assigned claims that are filed with Palmetto GBA are reimbursed directly to the provider. Certain services, when rendered, may only be paid on an assigned basis:

  • Clinical diagnostic laboratory services
  • Physician services to individuals dually entitled to Medicare and Medicaid
  • Services of physician assistants, nurse practitioners, clinical nurse specialists, nurse midwives, certified registered nurse anesthetists, clinical psychologists and clinical social workers
  • Ambulatory surgical center (ASC) facility charges
  • Home dialysis supplies and equipment paid under Method II
  • Drugs and biologicals

Nonassigned Claims
Reimbursement for nonassigned claims that are filed with Palmetto GBA is sent directly to the patient or beneficiary.

  • If you do not accept assignment on a Medicare claim, the Privacy Act prohibits Palmetto GBA from releasing certain claims information to you
  • The only information about a claim which may be released is if it has been received, paid or its status in the Medicare processing system
  • More specific, information cannot be released unless the patient authorizes the release of such information

Methods of Submission
Claims may be filed to Palmetto GBA electronically (this applies to most Medicare providers) or on paper (if certain conditions or exceptions exist).

Mandatory Electronic Filing

  • Section 3 of the Administrative Simplification Compliance Act (ASCA), Pub.L. 107-105, and the implementing regulation at 42 CFR 424.32 require that all initial claims for reimbursement under Medicare, except from small providers, be submitted electronically as of October 16, 2003, with limited exceptions. Initial claims are those claims submitted to a Medicare fee-for-service carrier, DME Medicare Administrative Contractor, or FI for the first time, including resubmitted previously rejected claims, claims with paper attachments, demand bills, claims where Medicare is secondary, and non-payment claims. Initial claims do not include adjustments or claim corrections submitted to FIs on previously submitted claims or appeal requests. 
  • Exceptions to this requirement include:
    • Small providers, defined as providers of service that submit claims to Medicare Part B that have fewer than 10 full-time equivalent (FTE) employees
    • Providers that submit roster claims (generally immunization providers)
    • Claims for payment under a Medicare demonstration project that specifies paper submission
    • Obligated to Accept as Payment in Full' (OTAF) Medicare Secondary Payer (MSP) claims when there is more than one primary payer
    • MSP claims for which there is more than one primary payer and more than one allowed amount. Note: This exception does not apply to claims for which a single primary payer other than Medicare exists.
    • Home oxygen therapy claims (applies to providers that submit claims to a DME Medicare Administrative Contractor)
    • Claims submitted by beneficiaries
    • 'Unusual circumstances'
  • For complete information regarding the mandatory electronic claim filing requirement and exceptions to the requirement, refer to the CMS Medicare Claims Processing Manual (Pub. 100-04), Chapter 24, Section 90 (PDF)

Electronic Data Interchange (EDI)

  • EDI claims are transmitted electronically via telephone lines, via a modem, to Palmetto GBA
  • EDI filing gives the provider control over the timeliness and accuracy of the claims entry by eliminating the need for mailroom processing and manual data entry by Palmetto GBA
  • Payment for 'clean claims' may be released by Palmetto GBA as soon as the Centers for Medicare & Medicaid Services (CMS) timeframe requirements for claims payment have been satisfied. The payment floor (minimum amount of time, required by law, for which all Medicare carriers must hold payment) is 14 days for electronic claims, as opposed to 29 days for paper claims.
  • Submitting claims electronically will result in an overall cost savings from not purchasing paper claims or paying for postage
  • For situations in which Palmetto GBA requires additional supporting documentation (e.g., requirements noted in a Local Coverage Determination or other publication), you may fax supporting documentation with your electronic claim. Refer to the section titled "Electronic Claims and FAX Attachments" for more information.  

Carrier Software
Palmetto GBA offers courtesy billing software called PC-ACE Pro32. We provide technical support for this software. If you are interested in obtaining Pro32, contact Palmetto GBA EDI Technical Support.

Additional Benefits of Electronic Claim Submission
In addition to the day-to-day benefits of electronic claims submission, EDI senders may also take advantage of these other features.

  • Electronic Remittance Advice (ERA). This feature allows you to receive paid and/or denied claims information electronically from the Medicare Part B system. ERA can be utilized to automatically update providers’ accounts receivable or patient billing system. ERA is equivalent to the Medicare Standard Provider Remittance (SPR) and can eliminate the need to post payments manually.
  • Electronic Funds Transfer (EFT). Whether you are an electronic or paper sender, EFT provides the capability of electronically sending Medicare Part B payments directly to your financial institution.
  • Eligibility Accesses. Participating providers who have their claims filed electronically have access to beneficiary eligibility files, via a vendor access. By giving you access to your patient’s Medicare eligibility file, you can determine whether the patient is eligible for Medicare benefits; has met his/her Medicare deductible; is enrolled in a health maintenance organization; or is entitled to Medicare under the Medicare Secondary Payer provision.

Paper Claims
Medicare Part B paper claims may be filed using only the red printed CMS-1500 claim form. This form is appropriate for filing all types of health insurance claims to private insurers as well as government programs. Detailed instructions on completing the CMS-1500 form are found on the website titled "CMS-1500 Instructions." The time frame requirement for payment of paper claims is substantially longer than for electronically submitted claims. "Clean" paper claims (claims that are submitted with all required information and without errors) may be paid as soon as 29 days after the date the claim is received by Palmetto GBA, whereas electronic claims may be paid as soon as 13 days after the date the claim is received by Palmetto GBA.

The claim forms are available as a single sheet, two-part snap-out, one-part continuous, or two-part continuous form. Palmetto GBA does not supply CMS-1500 claim forms; however, you may purchase forms from local printers or one of the following offices:

U.S. Government Printing Office
Superintendent of Documents
Medicare Department
Washington, D.C. 20402
(202) 512-1530

American Medical Association (AMA)
P.O. Box 10946
Chicago, IL 60610

The Government Printing Office sells negatives for printing the forms. They may be ordered from:

Assistant Superintendent of Departmental Account Representative Division
U.S. Government Printing Office Room C-830
Washington, D.C. 20401

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