Medicare Secondary Payer Calculations Presented by: Provider Outreach and Education (POE) September 2015

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1 Medicare Secondary Payer Calculations Presented by: Provider Outreach and Education (POE)

2 DISCLAIMER This information release is the property of Noridian Healthcare Solutions, LLC (Noridian). It may be freely distributed in its entirety but may not be modified, sold for profit or used in commercial documents. The information is provided as is without any expressed or implied warranty. While all information in this document is believed to be correct at the time of writing, this document is for educational purposes only and does not purport to provide legal advice. All models, methodologies and guidelines are undergoing continuous improvement and modification by Noridian and CMS. The most current edition of the information contained in this release can be found on the Noridian website at and the CMS website at The identification of an organization or product in this information does not imply any form of endorsement. CPT codes, descriptors, and other data only are copyright 2015 American Medical Association. All rights reserved. Applicable FARS/DFARS apply. 2

3 Helpful Acronyms Acronym CARC BCRC CWF EGHP ERA IOM MSPRC OTAF Description Claim Adjustment Reason Code Benefit Coordination and Recovery Center Common Working File Employer Group Health Plan Electronic Remittance Advice Internet Only Manual Medicare Secondary Payer Recovery Contractor Obligated To Accept Payment in Full 3

4 Agenda Medicare Secondary Payer Calculations Obligated to Accept Fund (OTAF) 4

5 Objective Provide knowledge and understanding of the Medicare Secondary Payer regulations Help understand how secondary payments are calculated and why at times there are no liability to the patients 5

6 MSP PAYMENT CALCULATIONS Can t figure out why you cannot collect more? 6

7 MSP Provisions Secondary benefits are calculated for: Working Aged ESRD Disability 7

8 Obligated To Accept Fund (OTAF) Amount Medicare is NOT obligated to pay Write off, discount, risk amount, contractual adjustment, provider agreement or any amount not liable for beneficiary If OTAF amount from primary higher than Medicare s allowable, Noridian can pay secondary Amount normally same as allowed 8

9 Payment Calculations Method of calculating Medicare secondary amount same whether claim assigned/non-assigned Claims processed line by line detail Payment information received from primary insurer determines amount Medicare pays as secondary payer Higher of primary s allowable vs. Medicare s allowable If primary pays nothing (e.g. deductibles, non-covered), OTAF not considered Medicare pays as primary EOB used to coordinate benefits Ensures either Medicare pays correct amount as secondary or recovers correct amount paid in error as primary Not to exceed OTAF, when applicable 9

10 Payment Calculator 10

11 Noridian Home Page 11

12 Browse By Topic 12

13 Medicare Secondary Payer 13

14 Payment Calculator Calculator will not work, if primary insurance does not pay a line or if the Medicare provider is non-participating 14

15 Payment Calculation Deductible Met No OTAF Accept Assignment - Provider Billed Amount $72 Primary Allowed $55 Medicare Primary Allow $60 Primary Payment $44 Medicare Payment (80% of $60) $48 Secondary Balance $ 11 Higher of two Primary Allowable $60 Primary Payment $44 Secondary Payment Patient s Responsibility $16 $00 15

16 Payment Calculation Deductible Met With OTAF Accept Assignment - Provider Billed Amount $72 Primary Allowed (OTAF) $55 Medicare Primary Allow $60 Primary Payment $44 Medicare Payment (80% of $60) $48 Secondary Balance $ 11 Higher of two Primary Allowable not to exceed OTAF $55 Primary Payment $44 Secondary Payment Patient s Responsibility $11 $00 16

17 Payment Calculation Deductible Not Met - With OTAF Primary Allowed Provider Billed Amount $300 $200 Medicare Primary Allow $125 Primary Payment $160 Deductible Not Met $100 Secondary Balance $40 Medicare Balance $25 Medicare Primary Paid Amount $20 ($25 x 80%) Medicare Pays $20 Patient s Responsibility $00 17

18 Payment Calculation Deductible Not Met No OTAF Accept Assignment - Provider Billed Amount $300 Primary Allowed Primary Payment Secondary Balance $200 Medicare Primary Allow $250 $160 Deductible Not Met $100 $ 40 Medicare Balance at 80% Medicare Primary Paid Amount $120 ($150 x 80%) Medicare Pays $90 Patient s Responsibility $00 ($100 deductible credited) $150 18

19 Payment Calculation Deductible Not Met by both insurance No OTAF Accept Assignment - Provider Billed Amount $300 Primary Allowed Primary Deductible Primary Payment $200 Medicare Primary Allow $180 $100 Deductible Not Met $100 $ 80 Medicare Balance $80 Medicare Primary Paid Amount $64 ($80 x 80%) Medicare Pays $64 Patient s Responsibility $36 ($100 deductible credited) 19

20 Payment Calculation Deductible Not Met by both insurance No OTAF Accept Assignment - Provider Billed Amount $262 Primary Allowed Primary Deductible Primary Payment $262 Medicare Primary Allow $200 $150 Deductible Not Met $100 $112 Medicare Balance $100 Medicare Primary Paid Amount $80 ($100 x 80%) Medicare Pays $80 Patient s Responsibility $8 ($100 deductible credited) 20

21 Primary Allowed Payment Calculation Non Par Physician Non-Assigned - Provider Billed Amount $225 $200 Medicare Primary Allow $125 Primary Payment $160 Limiting charge amount $ Secondary Balance $40 Medicare Primary Paid $100 ($125 x 80%) Medicare Pays $00 Patient s Responsibility $00 21

22 In Summary Medicare is always primary to a retirement plan and always secondary to an active plan Calculations are based on the higher of the two allowable unless OTAF is involved Patient s responsibility is based on Medicare s allowable or the Limiting Charge amount. 22

23 REFUND SITUATIONS What Forms Should I use? 23

24 MSP Form Noridian MSP team responsible for processing MSP general and post pay correspondence Includes most MSP front-end related correspondence Send MSP primary/secondary claim inquiry Don t send as Reopening or Redetermination NOTE: If specific patient EOB information is not provided, unable to process request appropriately 24

25 JF MSP Voluntary Refund Form To send refund check voluntarily, use this Part B MSP Voluntary Check Form Utilized for any MSP request pertaining to Primary or Secondary payment Include form with every voluntary/unsolicited refund check 25

26 JE MSP Voluntary Refund Form To send refund check voluntarily, use this Part B MSP Voluntary Check Form Utilized for any MSP request pertaining to Primary or Secondary payment Include form with every voluntary/unsolicited refund check 26

27 CMS Website Resources Guidance/Guidance/Manuals/Downloads/msp 105c03.pdf 27

28 RESOURCES

29 CEU Process Reminder When registering, add additional attendees First and last names Attend entire workshop Q/A attendance optional Take short polling survey After closing out of webinar CEU ed 3 days after presentation Earn between.5 and 1.5 CEUs No password or index number needed All providers may use CEU certificate Certificate of Attendance no longer available 29

30 Questions? Thank you!