Patients with Permanent Kidney Failure: End Stage Renal Disease (ESRD)

The Medicare secondary payer provisions state that Medicare may be the secondary insurer for a beneficiary under the age of 65 years who is eligible for Medicare solely on the basis of End Stage Renal Disease (ESRD).

The definition of ESRD is the need for a regular course of dialysis to sustain life until a kidney transplant can be received.

Medicare is secondary to any employer-sponsored group health coverage, whether it is related to active employment or not (includes COBRA coverage). Employers must offer the same health coverage benefits under the same conditions that are offered to others who can participate in the plan. The plan cannot terminate coverage (except COBRA coverage) on the basis of entitlement to Medicare or discriminate in other ways. Medicare does not consider the number of employees to determine primary versus secondary responsibility for ESRD situations.

Medicare Eligibility
Medicare eligibility is determined by the Social Security Administration. Medicare eligibility usually begins the first day of the fourth month after three months of a regular course of hemodialysis; the first day of the month in which peritoneal (CAPD, home training) dialysis started or the first day of the month a kidney transplant is completed if within the first three months of the waiting period.

Section 4631 (b) of the Balanced Budget Act (BBA) of 1997 permanently extended the coordination of benefits (COB) period from 18 to 30 months for anyone whose coordination period began on or after March 1, 1996. Individuals who have not completed an 18-month coordination period by July 31, 1997, will have a 30-month coordination period under the new BBA law. This provision does not apply to individuals who have completed an 18-month coordination period prior to July 31, 1997.

Medicare is the secondary payer for 30 months from the individual's ESRD eligibility date. If an individual has more than one period of Part A eligibility or entitlement based on ESRD, a coordination period is determined for each period of eligibility. Medicare is the secondary payer for both renal related and non-renal related services.

Medicare guidelines instruct that after the 30-month coordination period, Medicare becomes the primary payer. If the person has had a successful transplant during the 30 months, Medicare remains secondary throughout the 30 months. However, if 36 months have passed since the first day of the month of a successful transplant and Medicare is retained, the person may be entitled to Medicare for other reasons and may be considered under another MSP provision.

If the transplant fails within the original 36-month period, Medicare remains the primary payer (after the initial 30-month COB period has expired) until the person has reached a 36-month period of a successful kidney transplant.

April 25, 1995 or After
If Medicare is the secondary payer under the aged worker or disability provisions and a beneficiary becomes eligible/entitled to Medicare based on ESRD, Medicare will continue to pay secondary for the duration of the 18- or 30-month coordination period which begins the first day of the month in which they became entitled to Medicare under the ESRD provisions.

If it was previously determined that Medicare is the primary payer for the beneficiary under Aged Worker or Disability provisions when a beneficiary becomes eligible/entitled to Medicare based on ESRD, Medicare will remain the primary payer. An ESRD coordination period does not go into effect.

CMS regulation reference: Publication 100-05, Chapter 1, Chapter 2, and Chapter 5.