Orlando Harmon
Medicare Secondary Payer (MSP) is the term used when another entity has the responsibility for paying before Medicare. In 1980, Congress passed legislation that made Medicare the secondary payer to certain primary plans to shift costs from Medicare to the appropriate private sources. Medicare does not automatically know if you have other coverage, and it is the responsibility of the primary payer to pay up to the limits of its coverage and then send the rest of the balance to the secondary payer.
| Characteristics | Values |
|---|---|
| Medicare as primary payer | Medicare is the primary payer for beneficiaries who are not covered by other types of health insurance or coverage. |
| Medicare as secondary payer | Medicare becomes the secondary payer when another entity has the responsibility for paying before Medicare. |
| Primary payer | The primary payer pays up to the limits of its coverage and then sends the remaining amount to the secondary payer. |
| Secondary payer | The secondary payer pays only if there are costs the primary payer didn't cover. |
| Conditional payment | Medicare may make a conditional payment if the primary payer doesn't pay the claim promptly. The payment is "conditional" because it must be repaid to Medicare when a settlement, judgment, award, or other payment is made. |
| Coordination of benefits | The order of payment when a patient has multiple payers is called "coordination of benefits." |
| Reporting other coverage | Insurers must report to Medicare when they are the primary payer on a claim. Healthcare providers, employers, or insurers may ask questions about current coverage and report this information to Medicare. |
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What You'll Learn
Medicare doesn't automatically know about other coverage
When you have multiple payers, it is important to understand the order of payment, known as the coordination of benefits. The primary payer pays first and, if there are any remaining costs, the secondary payer covers those expenses up to its limits. This process ensures that Medicare does not pay for items or services that other insurance plans are primarily responsible for. It is important to note that Medicare remains the primary payer for beneficiaries who are not covered by other types of health insurance.
In some cases, your healthcare provider may need to bill Medicare directly. This typically occurs when the primary payer does not pay promptly, usually within 120 days. Medicare may make a conditional payment in such situations to ensure that the beneficiary does not have to use their own money to pay the bill. However, it is important to remember that the conditional payment must be repaid to Medicare if a settlement or judgment is reached later.
It is always beneficial to inform your doctor and other healthcare providers if you have coverage in addition to Medicare. This proactive step will help them send your bills to the correct payer and avoid any delays in processing your claims. Additionally, it is worth noting that changes in employment, retirement, or health insurance companies may impact your claims payment, so keeping your providers informed is essential.
When dealing with specific situations, such as workers' compensation, no-fault insurance, or liability insurance, the billing process can become more complex. In these cases, it is crucial to understand the applicable rules and regulations. For instance, if Medicare pays for medical or drug claims without knowing they are related to a workers' compensation settlement, Medicare must be reimbursed from the Workers' Compensation Medicare Set-aside Arrangement.
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Primary payer pays first
When an individual has Medicare and other health insurance, each type of coverage is called a "payer". The "primary payer" pays up to the limits of its coverage, then sends the remaining balance to the "secondary payer". This order of payment is called "coordination of benefits".
The primary payer is the insurance that pays first. The primary payer pays up to the limits of its coverage. If the primary payer does not cover the entire bill, the provider should send the bill to the secondary payer for secondary payment. The secondary payer only pays if there are costs the primary payer didn't cover.
In some cases, Medicare may make a "conditional payment" if the primary payer does not pay promptly. A conditional payment is a payment made by Medicare for services that another payer may be responsible for. The payment is "conditional" because it must be repaid to Medicare when a settlement, judgement, award, or other payment is made.
It is important to note that Medicare does not automatically know if an individual has other coverage. However, insurers must report to Medicare when they are the primary payer on medical claims. Individuals should also inform their doctor and other healthcare providers if they have coverage in addition to Medicare.
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Secondary payer pays remaining balance
When a person has Medicare and another form of health insurance, each type of coverage is called a "payer". The "primary payer" pays up to the limits of its coverage, then sends the remaining balance to the "secondary payer". This order of payment is called "coordination of benefits".
The secondary payer will only pay if there are costs that the primary payer did not cover. If the secondary payer does not cover the remaining balance, the patient may be responsible for the remaining costs.
Medicare may make a conditional payment if the primary payer does not pay the claim promptly (usually within 120 days). This is a payment made by Medicare for services that another payer may be responsible for. The payment is "conditional" because it must be repaid to Medicare when a settlement, judgement, award, or other payment is made.
Medicare Secondary Payer (MSP) is a term used when the Medicare program does not have primary payment responsibility. In 1980, Congress passed legislation that made Medicare the secondary payer to certain primary plans to shift costs from Medicare to the appropriate private sources of payment.
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Medicare may make a conditional payment
A conditional payment is a payment made by Medicare for services for which another payer may be responsible. Medicare makes this payment on the condition that it will be reimbursed if and when the primary payer makes the payment. The primary payer pays up to the limits of its coverage and then sends the remaining balance to the secondary payer. If the secondary payer does not cover the remaining balance, the patient may be responsible for the remaining costs.
The Benefits Coordination & Recovery Center (BCRC) is responsible for recovering conditional payments when there is a settlement, judgement, award, or other payment made to the Medicare beneficiary. The BCRC will identify the affected claims and begin recovery activities. Beneficiaries and their attorneys should recognize the obligation to reimburse Medicare during any settlement negotiations.
If you are settling a liability case, you may be eligible to obtain Medicare's demand amount before settlement or pay Medicare a flat percentage of the total settlement. You can obtain the current conditional payment amount and copies of CPLs from the BCRC or the Medicare Secondary Payer Recovery Portal (MSPRP).
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Medicare Secondary Payer (MSP)
When Medicare was introduced in 1966, it was the primary payer for all claims except for those covered by Workers' Compensation, Federal Black Lung benefits, and Veteran's Administration (VA) benefits. In 1980, Congress passed legislation that made Medicare the secondary payer to certain primary plans, shifting costs from Medicare to the appropriate private sources of payment. The MSP provisions ensure that Medicare does not pay for items and services that certain health insurance or coverage is primarily responsible for paying.
The MSP provisions apply when Medicare is not the beneficiary's primary health insurance coverage. Medicare remains the primary payer for beneficiaries who are not covered by other types of health insurance or coverage. In cases where a patient has Medicare and other health insurance, it is important to inform healthcare providers so that bills are sent to the correct payer and delays are avoided.
If a provider knows that a patient has a no-fault or liability insurance claim, they must first try to get payment from the insurance company before billing Medicare. If the insurance company does not pay promptly, the provider may bill Medicare, which may make a conditional payment to pay the bill. However, Medicare will later recover any payments that the primary payer should have made.
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Frequently asked questions
The primary payer is the insurance that pays first. It pays up to the limits of its coverage.
The secondary payer is the insurance that pays second. It pays only if there are costs the primary payer didn't cover.
No, Medicare does not automatically know if you have other insurance coverage. However, your insurers must report to Medicare when they are the primary payer on your medical claims.
Medicare Secondary Payer (MSP) is the term used when Medicare does not have primary payment responsibility, meaning another entity has the responsibility for paying before Medicare.
A conditional payment is a payment made by Medicare for services that another payer may be responsible for. This is done so that the beneficiary doesn't have to use their own money to pay the bill.
