Medicare Secondary Payer (MSP) Conditional Payment

If the primary payer is billed, and payment is not received but you do not receive payment for a valid reason (for all primary payers except Medicare Secondary Payer (MSP) value code 16 - Public Health Services portion of a higher priority or other Federal agency, or value code 42 - Veterans Administration); a conditional claim can be submitted to Medicare. For MSP value codes 16 or 42, if payers do not make payments for a valid reason, then a Medicare primary claim (not conditional) can be billed.

If the primary payer is billed for an accident, and the provider does not receive payment within 120 days then a conditional claim can be billed to Medicare.

For a list of valid reason to request a conditional payment; refer to Medicare Secondary Payer (MSP) Manual Chapter 3 (PDF), Section 40. This list provides limited situations for Group Health Plans.

Note: Liability Plans: After waiting 120 days from the date on which the primary payer is billed, you may choose to submit a conditional claim to Medicare or to maintain all claims/liens against the liability insurance/beneficiary’s liability insurance settlement. If a conditional claim to Medicare is submitted in a case where liability is the primary payer, you must first withdraw all claims/liens against the liability insurance/beneficiary’s liability insurance settlement. You may maintain liens with the liability insurance/beneficiary’s liability insurance settlement only for services not covered by Medicare and for Medicare deductible and coinsurance amounts. See Medicare Secondary Payer (MSP) Manual, Chapter 2 (PDF), Section 40.2, letter B.

When specified conditions are met the MSP statute prohibits Medicare from making payment where payment has been made or can reasonably be expected to be made by group health plans (GHPs), a workers’ compensation law or plan, liability insurance (including self-insurance), or no-fault insurance. If payment has not been made or cannot be reasonably be expected to be made promptly by workers’ compensation, liability insurance (including self-insurance), or no-fault insurance, Medicare may make conditional payments. Medicare contractors and shared systems shall continue to follow instructions found in Medicare Secondary Payer (MSP) Manual, Chapter 1 (PDF), section 10, Chapter 2 (PDF), section 60, Chapter 3 (PDF), section 30.2, and Chapter 5 (PDF), section 40.6 and to determine when to pay conditionally on incoming claims. 

Additional Tips

• If the liability, workers’ compensation (WC), or no-fault (NF) denies payment because the benefits are exhausted, submit the claim to Medicare with the appropriate claim adjustment reason code you received from the WC, NF or Liability insurer identifying that benefits are exhausted
• If the services are not related to the open liability, workers’ compensation, or no-fault record, follow the instructions on the interactive MSP Lookup Tool to submit the claim as Medicare primary. You may appeal the claim with Medicare if Medicare inappropriately deny the claim due to the diagnosis codes on the claim being related to the diagnosis codes on the MSP record when the claim injury is not related to accident or injury on record.
• A conditional claim can be submitted to Medicare if there is no MSP record on the Common Working File (CWF). For information on how to properly submit a conditional payment claim, refer to CMS IOM 100-5, Chapter 5 (PDF), Section 40.6 for detailed instructions.
• If the "primary" insurer denies a claim because the policy has terminated, submit the claim to the MAC using the appropriate claim adjustment reason code found on the primary payer’s remittance advice. Do not contact the MSP Contractor to update the MSP record.

Resources:

• CMS IOM 100-05 Medicare Secondary Payer Manual
• MLN006903 – Medicare Secondary Payer (PDF)
• MLN7748519 – Medicare Secondary Payer: Don't Deny Services & Bill Correctly
• Change Request 13037- Patient Responsibility Reporting with MSP