The information on this tip sheet is designed to assist providers in understanding when Medicare will make a conditional payment for Medicare covered services. When the conditional payment requirements outlined below are met, refer to the billing instructions provided in the Medicare Secondary Payer (MSP) Interactive Process Tool for submitting claims.

Definition of Conditional Payment
A provider may submit a claim to Medicare for conditional payment for services for which another payer is responsible. If payment has not been made or cannot be expected to be made promptly from the other payer, Medicare may make a conditional payment, under some circumstances, subject to Medicare payment rules. Conditional payments are made subject to repayment when the primary plan makes payment.

Group Health Plan (GHP) Conditional Payment
A conditional payment may be made in situations where a Group Health Plan (GHP) applies only when the physical or mental incapacity of the beneficiary, provider, physician or other supplier, or beneficiary failed to file a proper claim with the GHP.

No-Fault, Workers’ Compensation, and Liability Insurance Conditional Payment
A conditional payment may be made in situations where liability, no-fault or workers’ compensation claims apply when:

  • The claim has been submitted to the primary payer; and
    • There is an expectation that payment will be recovered from the primary payer once payer status or liability settlements are resolved, or
    • Payment is not received promptly
      • No-fault or workers’ compensation — 120 days after receipt of the claim, or when there is no evidence to the contrary, the date of service (discharge date)
      • Liability — 120 days after the earlier of the following: (1) The date a general liability claim is filed with an insurer or a lien is filed against a potential liability settlement; and (2) the date the service was furnished or (discharge date)

Situations When Conditional Payment is Denied
Medicare will deny claims submitted for conditional payment when the provider submits the claim to the liability, no-fault, or WC claims and payment is denied if:

  • There is an employer GHP that is primary to Medicare
  • You did not send the claim to the employer GHP first

Medicare will also deny claims when the provider submitted the claim to the liability insurer (including the self-insurer), no-fault, insurer or WC entity, but the insurer entity did not pay the claim if:

  • There is an employer GHP that is primary to Medicare
  • The employer GHP denied the claim because the GHP asserted that the liability insurer (including the self-insurer), no-fault insurer or WC entity should pay first

To indicate that claims were denied by Medicare because the claim was not submitted to the appropriate primary GHP for payment, Medicare will use the following codes on the remittance advice (RA):

  • Claim Adjustment Reason Code 22 — This care may be covered by another payer per Coordination of Benefits
  • Remittance Advice Remark Code MA04 — Secondary payment cannot be considered without the identity of or payment information from the primary payer. The information was either not reported or was illegible.

Additional Tips

  • If the liability, workers’ compensation, or no-fault denies payment because the benefits are exhausted, do not submit a MSP claim. Submit the claim to Medicare as primary. If the MSP record on the CWF file does not show a termination date, contact the Benefits Contractor & Recovery Center (BCRC), formerly known as the Coordination of Benefits Contractor (COBC). to have the record updated. The claim will be submitted to Medicare as primary after the BCRC updates the record. Remarks should be entered on the claim explaining that the benefits have been exhausted. Providers may refer to MLN Matters Article SE1416 for more information on how to contact the BCRC.
  • If the services are not related to the open liability, workers’ compensation, or no-fault record, follow the instructions on the MSP Interactive Tool to submit the claim as Medicare primary
  • A conditional claim cannot be submitted to Medicare if there is no MSP record on the CWF. If the services are related to the open liability, workers’ compensation, or no-fault plan, contact the BCRC to have the appropriate record added to the patient’s file.
  • If the "primary" insurer denies a claim because the policy has terminated, do not submit a MSP claim. If the MSP record on the CWF file does not show the termination date, contact the BCRC to have the record updated. Medicare cannot process the claim for primary payment until the CWF file has been updated. 

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Provider Contact Center: 877-567-7271

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