Are Your Medicare Secondary Payer (MSP) Claims Rejecting?

Medicare Secondary Payer (MSP) refers to instances in which Medicare does not have primary responsibility for paying the medical expenses of a Medicare beneficiary. This is because the Medicare beneficiary may be entitled to other coverage, which should pay the primary health benefits.

Medicare secondary claims can be submitted electronically. However, Palmetto GBA has rejected some claims because there was a mismatch between the MSP Type submitted on the claim and the specific patient's Medicare record. Below are some examples of situations that you may wish to verify when you receive these Medicare rejections:

  • Do you routinely submit claims containing the same MSP Type (example: MSP type 47) when Medicare does not show this to be a valid MSP type for the specific patient?
  • If you submit your claims to a clearinghouse, does your clearinghouse understand that claims must be submitted with the correct MSP Type?
  • Is your patient covered by Medicare as an Aged Worker (Type 12), but claims for the patient are being submitted as Disability (Type 43)?
  • Was your patient's injury related to Workers' Compensation (Type 15), but you submitted the MSP claim as an Aged Worker (Type 12)?
  • If you submit claims through an electronic clearinghouse, make sure you provide the clearinghouse with the correct MSP Type for each claim. If you are still receiving rejections from Medicare, verify that your clearinghouse is submitting the MSP Type you provided for each patient.
If you answered "Yes" to any of the above questions, your Medicare MSP claims are most likely rejecting because there is a mismatch of the type submitted and the Medicare MSP files. This situation can drastically impact the cash flow for your office. Below are the loops and segments where this information should be located in the electronic claims format:

Loop, Segment, ElementDescriptionValue
2000B, SBR, 05 Insurance Type Code 12, 13, 14, 15, 41, 43, 47

  • Always submit the appropriate MSP type for the beneficiary's insurance coverage
  • If the submitted MSP type does not correspond to the information Medicare has on file, your claim will be rejected. Rejected claims must be submitted as new claims.
Below is a list of the valid Medicare Secondary Payer types that may be submitted on electronic claims.

MSP TypeDescription
12 Working Aged: age 65 or over, employer's group plan has at least 20 employees
13 End Stage Renal Disease (ESRD): 30-month initial coordination period in which other insurer is primary
14 No-Fault Situations: Medicare is secondary if illness/injury results from a no-fault liability. This type would most likely not be submitted to Palmetto GBA because we will pay services conditionally, as primary, based on your decision to submit the claim to Medicare for the Liability situation. In these cases, we do not require MSP information.
15 Workers' Compensation (WC) situations
41 Black Lung benefits
43 Disability: under age 65, person or spouse has active employment status and employer's group plan has at least 100 employees
47 Liability Situations: Medicare is secondary if illness/injury results from a liability situation

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