Don't Slow Down Claims - Understand the Medicare Secondary Payer

by  Find-A-Code™
Jun 6th, 2023

We are betting that your visit to our website indicates you've been working in medical billing or coding for quite some time. That being the case, you know how complicated things are. It only takes a minor mistake to slow down claims. Something as simple as not understanding the Medicare secondary payer (MSP) principle can cause big problems.

As a medical biller, the last thing you want to do is slow down claims. So make sure you fully understand the MSP concept and how it affects the billing codes you work with. The underlying principle is simple: when Medicare is the secondary payer for services rendered, you must use the appropriate MSP code on the claim form.

A Closer Look at MSP

An MSP scenario exists when Medicare is not the primary payer on a claim. This occurs when Medicare-eligible patients are also covered by other payment systems. Those payment systems could be anything from private health insurance to workers' comp.

MSP came about in 1980 when Congress determined the federal government needed to start shifting some of its costs away from public resources and onto the private sector. At the time, the thinking was to maintain Medicare trust fund solvency by ensuring that the system only paid claims when no other resources could be leveraged.

One could argue the success of the MSP concept considering the fact that Medicare spending continues to grow. Meanwhile, no amount of debate changes the fact that service providers have a legal responsibility to determine whether Medicare is the primary payer of submitted claims. When Medicare is the secondary payer, the MSP code must be utilized.

Common MSP Scenarios

As a medical billing specialist, we assume you are comfortable with the fact that Medicare is the public health insurance program for seniors and the disabled. The two groups make up the lion's share of Medicare subscribers. Many subscribers have access to other payment forms for their medical bills. Below are a few common scenarios:

1. Working Subscriber with Group Coverage

A Medicare subscriber 65 or older may have group health insurance through an employer or a spouse's employer. If that is the case, and the employer in question has 20 or more employees on the payroll, its group health insurance plan is the primary payer. Medicare is the secondary payer.

2. Disabled Subscriber with Group Insurance

Likewise, a disabled individual covered by group insurance through his own employer or his spouse's, might subscribe to a private insurance plan that acts as the primary payer. Group plans offered through employers with 100 or more workers generally qualify as primary payers. Medicare would be the MSP in such a case.

3. Workers' Comp Recipients

Medicare may be the secondary payer for claims resulting from services provided to patients who are Medicare-eligible but also receive workers' comp benefits. Regardless of age, a patient entitled to workers' comp benefits as a result of a workplace injury or illness would rely on those benefits to pay all claims for services relating to said injury or illness.

Medicare normally does not cover claims related to workers' comp issues. However, there are times when Medicare will step up and pay claims that are rejected as not qualifying for workers' comp benefits.

Remember that medical billing codes might be subject to MSP when a patient is a dual subscriber. Make sure to use the appropriate billing codes so as to guarantee that any claims you submit are not slowed down. The more comfortable you are with MSP rules, the more accurate your work will be.