Medicare Secondary Payer (MSP) Manual

1 Medicare Secondary Payer (MSP) Manual Chapter 5 - Contractor Prepayment Processing Requirements Table of Contents (Rev. 10401, 10-23-20) Transmittals for Chapter 5 10 - Coordination with the Benefits Coordination & Recovery Center (BCRC) - Contractor MSP Auxiliary File Update Responsibility - COBC Electronic Correspondence Referral System (ECRS) Attachment 1 - ECRS Web User Guide, Software Version Attachment 2 - ECRS Web Quick Reference Card Version - ECRS Functional Description - Technical Overview - Impact on Contractor Data Centers - Providing Written Documents to the COBC - Contractor Record Retention - Notification to Contractors of MSP Auxiliary File Updates - Referring Calls to the COBC - Changes in Contractors Initial MSP Development Activities - Additional Activities Arranged by Non-GHP MSP Type - No-Fault Development - Workers' Compensation (WC)

2 Development - Liability Development - COBC Numbers 20 - Sources That May Identify Other Insurance Coverage - Identification of Liability and No-Fault Situations - Identify Claims with Possible WC Coverage - Medicare Claims Where Veterans' Affairs (VA) Liability May Be Involved - VA Payment Safeguards - Identification of On-Going Responsibility for Medicals (ORM) in Liability, No-Fault, and Workers' Compensation Situations - Background Regarding ORM for Contractors - Policy Regarding ORM - Operationalizing ORM for Liability, No-Fault, and Workers' Compensation Situations Medicare Residual Payments Due When On-going Responsibility for Medicals (ORM) Benefits Terminate, or Deplete, During a Beneficiary s Provider Facility Stay or Upon a Physician, or Supplier.

3 Visit 30 - Develop Claims for Medicare Secondary Benefits - Further Development Is Not Necessary - Further Development Is Required - GHP May Be Primary to Medicare - Limits on Development - Develop ESRD Claims Where Basis for Medicare Entitlement Changes - Workers' Compensation Responses - Patient Receives Concurrent Services Which Are Not Work-Related - No-Fault Responses - No-Fault Insurer Denies That It Is the Primary Payer - No-Fault Insurance Does Not Pay All Charges Because of a Deductible or Coinsurance Provision in Policy - State Law or Contract Provides That No-Fault Insurance Is Secondary to Other Insurance - Liability Claim Is Filed and There is Also Coverage Under Automobile or Non-Automobile Medical or No-Fault Insurance - Beneficiary Refuses to Provide Requested Information - Audit Trail of Primary Coverage 40 - FI and Carrier Claim Processing Rules - Claim Indicates Medicare is the Primary Payer - Facts Indicate Reasonable Likelihood of Workers' Compensation Coverage (Other Than Federal Black Lung Benefits)

4 - The Beneficiary Is on the Black Lung Entitlement Rolls - Services by Outside Sources Not Covered - Exception - Notice to Beneficiary - Update CWF MSP Auxiliary File - Action if Payment Has Been Made Under No-Fault Insurance Processing Part B Claims Involving GHPs - GHP Denies Payment for Primary Benefits - GHP Does Not Pay Because of Deductible or Coinsurance Provision - GHP Gives Medicare Beneficiary Choice of Using Preferred Provider - GHP Pays Primary - GHP Pays Charges in Full - GHP Pays Portion of Charges - GHP Pays Primary Benefits When Not Required - Primary Payer Is Bankrupt or Insolvent - Billing Beneficiaries During the Liquidation Process - When to Make a Medicare Secondary Payment - Amount of Secondary Payment - Time Limits for Filing Secondary Claims After Liquidation Process - Conditional Primary Medicare Benefits - Conditional Medicare Payment - When Primary Benefits and Conditional Primary Medicare Benefits Are Not Payable - Carrier Processing Procedures for Medicare Secondary Claims - Crediting the Part B Deductible - Medicare Payment Calculation Methodology - Medicare Secondary Payment Calculation Methodology for Services Reimbursed on Reasonable Charge or Other Basis Under Part B - Medicare Secondary Payment Part B Claims Determination for Services Received on ASC X12 837 Professional Electronic Claims - Medicare Secondary Payment Part A Claims Determination for Services Received on 837 Institutional Electronic or Hardcopy Claims Format - Version 5010 Balancing

5 For Incoming MSP Claims Where MSP Amounts Appear at the Claim Level and Not at the Service Detail Line - Effect of Medicare Limiting Charge on Medicare Secondary Payments - GHP Does Not Pay for Certain Services - Third Party Payment Includes Both Medicare Covered and Noncovered Services - Effect of Failure to File Proper Claim - Medicare Secondary Payment for Managed Care Organizations' (MCO) Copayments - Charging Expenses Against Annual Limit on Incurred Expenses for Services of Independently Practicing Physical Therapists - MSP Situations Under CAP - Intermediary Processing Procedures for Medicare Secondary Claims - Medicare Secondary Payment Calculation Methodology When Proper Claim Has Been Filed - Rule to Determine the Amount of Secondary Benefits - Application of the MSP Formula - PIP Reduction - MSP Part B Claims (Outpatient and Other Part B Services, Home Health Part B and Ancillary Services When Part A Benefits are Exhausted)

6 - MSP Outpatient Claims Involving Lab Charges Paid by Fee Schedule - Prorating Primary Payments - Calculation of Deductible and Coinsurance - Calculating Medicare Secondary Payments When Proper Claim Has Not Been Filed With Third Party Payer - Determining Patient Utilization Days, Deductible, and Coinsurance Amounts - Benefits Exhausted Situations When Medicare Is Secondary Payer for Reasonable Cost Providers - Deductible and/or Coinsurance Rates Spanning Two Calendar Years - Submit Data to CWF When Full Payment Made by Primary Payer - Submit Data to CWF When Partial Payment Made by Primary Payer 50 - MSP Pay Modules to Calculate Medicare Secondary Payment Amount - Medicare Secondary Payer (MSP) Payment Modules (MSPPAY) for Carriers - Payment Calculation Processes for MSP Claims - MSPPAY "Driver" Module - Return Codes - Executing and Testing MSPPAY Software - Carrier MSPPAY Processing Requirements - Error Resolution - Payment Calculation for Physician/Supplier Claims (MSPPAYB Module) - Payment Calculation for Physician/Supplier Claims (MSPPAYBL) - Medicare Secondary Payer (MSP) Payment Modules (MSPPAY) for Part A Contractors - Payment Calculation Processes for MSP Claims - MSPPAY "Driver" Module - Return Codes - Installation Part A Processing Requirements - Error Resolution - Payment Calculation for Inpatient Bills (MSPPAYAI Module) - Payment Calculation for Outpatient Claims (MSPPAYOL) MSPPAY Update to Apportion Prospective Payment System (PPS)

7 Outlier Amounts to All Service Lines with Potential Outlier Involvement - Payment Calculation for Outpatient Bills (MSPPAYAO Module) Multiple Primary Payer Amounts For a Single Service - Processing Medicare Secondary Payer (MSP) Fully Paid Claims for Outpatient and Home Health Claims 60 - MSP Reports Monthly Part A Report (Form CMS-1563) and Monthly Part B Report (Form CMS-1564) on Medicare Secondary Payer Savings - Overview of Report - Savings Calculations - Recording Savings - Source of Savings - Type of Savings Pre-payment Savings Cost Avoid (Unpaid MSP Claims) Pre-payment Savings Full Recoveries Pre-payment Savings Partial Recoveries Post-payment Savings Full Recoveries Post-payment Savings Partial Recoveries Total Post-payment Savings - Electronic Submission - Data Entry of the Forms CMS-1563 and CMS 1564 System Calculations for Forms CMS-1563 and CMS-1564 Exhibit 1 Medicare Secondary Payer (MSP)

8 Savings Report Exhibit 2 CWF Source Codes and Corresponding CROWD Special Project Numbers - Liability Settlement Tracking Report 70 - Hospital Review Protocol for Medicare Secondary Payer - Reviewing Hospital Files - Frequency of Reviews and Hospital Selection Criteria - Methodology for Review of Admission and Bill Processing Procedures - Selection of Bill Sample - Methodology for Review of Hospital Billing Data - Review of Form CMS-1450 - General Review Requirements - Working Aged Bills - Accident Bills - Workers' Compensation Bills - ESRD Bills - Bills for Federal Government Programs - Disability Bills - Use of Systems Files for Review - Review of Hospitals With Online Admissions Query or Use of the X12 270/271 Transaction - Assessment of Hospital Review - Exhibits - Exhibit 1: Assessment of Medicare Secondary Payer Hospital Review - Exhibit 2: Survey of Bills Reviewed - Exhibit 3: Entrance Interview Checklist - Exhibit 4: Entrance Interview Checklist: Billing Procedures 10 - Coordination with the Benefits Coordination & Recovery Center (BCRC) (Rev.)

9 124, Issued: 08-31-18, Effective: 10-01-18, Implementation: 10-01-18) Transfer of Initial Medicare Secondary Payer (MSP) Development Activities to the Benefits Coordination & Recovery Center (BCRC) The BCRC consolidates activities that support the collection, management, and reporting of all other health insurance coverage of Medicare beneficiaries, as well as all insurance coverage obligated to pay primary to Medicare . The BCRC assumed responsibility for virtually all initial MSP development activities formerly performed by contractors. The BCRC is charged with ensuring the accuracy and timeliness of updates to the Common Working File (CWF) MSP auxiliary file. The BCRC does not process claims, nor claims specific inquiries (telephone or written). The BCRC is responsible for developing to determine the existence or validity of MSP for Medicare beneficiaries.

10 The BCRC handles all MSP related inquiries, including those seeking general MSP information, but not those related to specific claims or recoveries. These inquiries (verbal and written) can come from any source, including but not limited to beneficiaries, attorneys/beneficiary representatives, employers, insurers, providers, suppliers and contractors. The BCRC is primarily an information gathering entity. The BCRC is dependent upon various sources to collect this information. With limited exceptions ( , claim clarification with provider to avoid returning the claim to the provider (RTP), contractors are no longer responsible for initiating MSP development and making MSP determinations. Following CMS correspondence guidelines (found in Pub. 100-09 chapter 6, and Timeliness); the Medicare contractors shall forward all information that they receive that might have MSP implications to the BCRC.)