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When is Medicare Secondary Payer?


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Sometimes Medicare beneficiaries do not rely exclusively on Medicare for their healthcare coverage. They use other insurance plans to allow them access to more services and lower their healthcare spending. When an insured has two different forms of coverage, the primary payer covers most costs, and the secondary payer then steps in to cover some or all remaining expenses. 

A person can choose to have more than one insurance plan to cover their healthcare costs and Medicare works with other insurance providers to give people comprehensive coverage. Each insurance pays their share of the healthcare service or products that someone receives. With Medicare, secondary payers contribute to co-payments and coinsurance. Usually, Medicare is the primary payer, although sometimes it can act as the secondary payer.

Common Situations of Primary Payer vs. Secondary Payer Responsibility

The following list identifies some common situations when Medicare and other health insurance or coverage may be present, and which entity will be the primary payer or secondary payer.

Working Aged (Medicare beneficiaries age 65 or older) and Employer Group Health Plan (GHP):

  • Individual is age 65 or older, is covered by a GHP through current employment or spouse’s current employment and the employer has less than 20 employees: Medicare pays Primary, GHP pays secondary
  • Individual is age 65 or older, is covered by a GHP through current employment or spouse’s current employment and the employer has 20 or more employees (or at least one employer is a multi-employer group that employs 20 or more individuals): GHP pays Primary, Medicare pays secondary
  • Individual is age 65 or older, is self-employed and covered by a GHP through current employment or spouse’s current employment and the employer has 20 or more employees (or at least one employer is a multi-employer group that employs 20 or more individuals): GHP pays Primary, Medicare pays secondary

Disability and Employer GHP:

  • Individual is disabled, is covered by a GHP through his or her own current employment (or through a family member’s current employment) AND the employer has 100 or more employees (or at least one employer is a multi-employer group that employs 100 or more individuals): GHP pays Primary, Medicare pays secondary

End-Stage Renal Disease (ESRD):

  • Individual has ESRD, is covered by a GHP and is in the first 30 months of eligibility or entitlement to Medicare: GHP pays Primary, Medicare pays secondary during 30-month coordination period for ESRD
  • Individual has ESRD, is covered by a Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA plan) and is in the first 30 months of eligibility or entitlement to Medicare: COBRA pays Primary, Medicare pays secondary during 30-month coordination period for ESRD

Consolidated Omnibus Budget Reconciliation Act (COBRA):

  • Individual has ESRD, is covered by COBRA and is in the first 30 months of eligibility or entitlement to Medicare COBRA pays Primary, Medicare pays secondary during 30-month coordination period for ESRD
  • Individual is age 65 years or older and covered by Medicare & COBRA: Medicare pays Primary, COBRA pays secondary
  • Individual is disabled and covered by Medicare & COBRA: Medicare pays Primary, COBRA pays secondary

Retiree Health Plans:

  • Individual is age 65 or older and has an employer retirement plan: Medicare pays Primary, Retiree coverage pays secondary

No-fault Insurance and Liability Insurance:

  • Individual is entitled to Medicare and was in an accident or other situation where no-fault or liability insurance is involved. No-fault or Liability Insurance pays Primary for accident or other situation related health care services claimed or released, Medicare pays secondary

Workers’ Compensation Insurance:

Individual is entitled to Medicare and is covered under Workers’ Compensation because of a job-related illness or injury:

  • Workers’ Compensation pays Primary for health care items or services related to job-related illness or injury claims. Medicare generally will not pay for an injury or illness/disease covered by workers’ compensation. If all or part of a claim is denied by workers’ compensation on the grounds that it is not covered by workers’ compensation, a claim may be filed with Medicare. Medicare may pay a claim that relates to a medical service or product covered by Medicare if the claim is not covered by workers’ compensation. Prior to settling a workers’ compensation case, parties to the settlement should consider Medicare’s interest related to future medical services and whether the settlement is to include a Workers’ Compensation Medicare Set-aside Arrangement (WCMSA).

Responsibilities of Part B Providers Under MSP

  • Follow the proper claim rules to obtain MSP information such as group health coverage through employment or non-group health coverage resulting from an injury or illness;
  • Inquire with the beneficiary at the time of the visit if he/she is taking legal action in conjunction with the services performed; and
  • Submit an Explanation of Benefits (EOB) form with all appropriate MSP information to the designated carrier. If submitting an electronic claim, provide the necessary fields, loops, and segments needed to process an MSP claim.

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